Chit Fund Arrangements

Websoftex Software Solutions Private Limited, a Bangalore based Company, an authorized Software service provider engaged in Chit Fund Software Development http://chitfundsoftware.in

Chit Fund arrangements are using social commitments as a surrogate for personal saving discipline. And that makes a certain sense for a small group whose friendship acts both as the binding that commits people to continue in the scheme as well as the binding that affords trust among the group. Most importantly though, is that, over the full year people will eventually get out what they put in.

However, if an institution charges (up to) 5% to run a formal kitty scheme for people, those subscribers will eventually get *less* money out than they put in. This is in contrast to a Savings Account in a bank where people get at least a modest *interest*, that is, a positive return on their savings. If they invested their money properly, they would do *much* better.

After learning basic arithmetic, people should be taught budgeting, how to invest, and the power the compound interest. These basic skills will obviate the need for any government or corporate pension scheme, for people will be able to run their own. And most importantly, when they retire, people will have the *capital* as well as the interest. That is, they will keep the wealth as well as the income.