Just as some people exercise more when they have an exercise buddy, others find it easier to save when they do it in a group. For the undisciplined spender who is constantly cashing in their savings, a Stokvel, or group savings club, could be the answer. But stokvels are worth taking note of for another reason. Did you know that money saved in a stokvel often benefits from better interest rates and lower fees than you would pay if you put your money in a bank savings account? Sound good? This is what you need to know if you want to start a stokvel.
Types of Stokvels
Usually a stokvel is started for a specific reason. The members of the stokvel may share a common goal for saving such as December groceries or a wedding. For example, a group of young ladies may get together and save in a stokvel for the purpose of funding their bridal parties.
Current estimates from the National Stokvel Association of South Africa are that the South African stokvel economy is worth R49 billion and that there are over 800 000 stokvel groups.
There is usually a minimum of 12 members in a stokvel. However, you may choose to have a smaller number of members in your savings group. The average South African stokvel has about 27 members with each member contributing about R210 a month.
This is an important document that must be drawn up when you start a stokvel. Think of it as the group’s guidebook. The constitution should include guidelines on:
- How often and in what manner money is to be collected each month.
- How the money will be invested.
- Under what circumstances withdrawals may be made.
- What happens if a member fails to make contributions or decides to leave the stokvel.
- What happens if a member dies.
- The process if a new member decides to join the club at a later date after inception.
The constitution is particularly important as it provides a reference point and can pre-empt disagreements within the group before they occur.
The Bank Account
You should have two to three authorised signatories on the bank account and this should be set up so that none of the authorised signatories can make withdrawals without the signature of the others. The stokvel should be audited regularly by an independent auditor and the auditing records should be freely available to all members.
- First National Bank provides a Stokvel Account that is aimed specifically at people saving as a group, with a low monthly fee of R7.
- Absa’s Club Account requires a minimum deposit of R50 to open the account, and zero transaction fees, and the savings are available on a 32-day notice period. The interest rate is tiered, so that the more money saved, the higher the interest you earn.
- Nedbank’s Club Account requires a R100 opening deposit, offers zero account maintenance or transaction fees, and unlimited withdrawals.
- Standard Bank’s Society Scheme savings account requires a R100 opening deposit, provides anytime access to funds, and offers cash prizes in regular draws as long as the account balance stays above R5 000.
When you start a stokvel, make sure that you identify people you trust as fellow members who share common values and savings goals. Good luck and start saving today!