Know your options
How a chit compares, honestly.
A chit is not the answer to everything. Here is where it fits beside the options you already know: a recurring deposit, a personal loan, a mutual fund SIP and direct stocks.
| Feature | Chit with Srivatshava | Recurring deposit | Personal loan |
|---|---|---|---|
| A fixed monthly saving habit | Same subscription every month | Same deposit every month | Not a saving product |
| A lump sum before the term ends | Bid in any monthly auction | Premature closure, usually with a penalty | Paid out on approval |
| A share of the auction discount | Dividend most months | Fixed interest instead | You pay interest |
| Safeguards | For every scheme, we keep the full chit value as a fixed deposit in the Registrar of Chits’ name, released only after all members are paid | DICGC insurance up to ₹5 lakh per depositor per bank | RBI-regulated lender; lender’s terms apply |
Disclaimer: General comparison for information only. Terms of deposits and loans vary by bank. A chit is not a bank deposit, and dividends and prize amounts are not guaranteed. The security fixed deposit is held under Section 20 of the Chit Funds Act, 1982; it is not deposit insurance. Full disclaimer
| Feature | Chit with Srivatshava | Mutual fund SIP | Direct stocks |
|---|---|---|---|
| Best suited to | A known goal on a known date, with monthly discipline | Long-term wealth over five years or more | Long-term growth, if you can watch and wait |
| What decides the amount you get | Our published schedule and the monthly auction | The fund’s NAV on the day you redeem | The share price on the day you sell |
| A lump sum before the term ends | Bid in any monthly auction | Redeem at that day’s value; exit load or tax may apply | Sell at that day’s price |
| When markets fall | Not linked to share prices | Value can fall, sometimes for months | Value can fall sharply |
| Long-term growth potential | Not designed for it | Historically strong over long periods, never guaranteed | Highest potential, with the highest risk |
| Who regulates it | Registrar of Chits, Chit Funds Act, 1982 | SEBI | SEBI and the stock exchanges |
Disclaimer: Mutual fund and stock market investments are subject to market risks. This is general information, not investment advice. Srivatshava Chits is not a SEBI-registered adviser. Full disclaimer
An illustrative example
One goal. One date. Two ways to save for it.
Lakshmi runs a tailoring boutique. Her son’s engineering admission is a year away and she expects to need about ₹8 lakh in the twelfth month. She can put aside ₹40,000 a month.
With an SIP, what she has in month 12 depends on how the market moves that year. With a ₹10 Lakh · 25 Months chit, if she is the successful bidder in month 12 at the scheduled discount, she would receive about ₹8,12,000. The actual amount depends on that month’s auction, and another member may outbid her.
What she can use in month 12
The chit amount is not a gain: after taking it she keeps paying her remaining instalments, shown below.
- Paid into the chit by month 12₹3,95,020
- Remaining 13 instalments, after dividends₹4,90,600
- Paid into the SIP by month 12₹4,80,000
What the chit gives her
A lump sum close to her goal around the month she needs it, without a bank loan and without watching the market. Taking it early works like borrowing from the other members: the auction discount is the cost, which is why the prize amount is less than ₹10,00,000, and she still pays the remaining instalments (₹4,90,600). Over the whole term she pays ₹8,85,620 in all.
Where an SIP is better
For goals ten or fifteen years away, such as retirement, equity SIPs have historically grown more than a chit is designed to. Some families use both: an SIP for the long term, and a chit for a goal with a date on it.
Disclaimer: Illustration only. Chit figures are from our published ₹10 Lakh · 25 Months schedule and are approximate; actual dividends and prize amounts depend on each month’s auction. SIP values assume equal monthly contributions and the stated annual market returns, before costs and taxes. Mutual fund investments are subject to market risks. This is not investment advice. Full disclaimer