Choos­ing the right ac­count

Stokvels now have dif­fer­ent bank­ing op­tions to choose from, writes Xoliswa Mh­laba

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HAS your stokvel group ever con­sid­ered what kind of bank ac­count to use for its trans­ac­tions? Are you us­ing a nor­mal sav­ings or cheque ac­count?

How much does your stokvel get in re­turn for keep­ing its money in the bank? These are the ques­tions you need to con­sider when it comes to sav­ing and in­vest­ing the hard-earned cash that is col­lected by your stokvel each month.

CHOOSE WISELY

BSK Mar­ket­ing, a com­pany that cre­ates part­ner­ships be­tween stokvels and other big busi­nesses, be­lieves that choos­ing the right bank ac­count for your stokvel can help grow your in­vest­ment even more.

With 25 years in the busi­ness, BSK Mar­ket­ing, help stokvels to max­imise their op­por­tu­ni­ties. Its CEO, Busi Sken­jana, says stokvels are now luck­ier than in the past be­cause most ma­jor banks have bank ac­counts that specif­i­cally cater for the stokvel com­mu­nity. Now stokvels have dif­fer­ent bank­ing al­ter­na­tives to keep their money safe.

“Stokvels must avoid sav­ing stokvel con­tri­bu­tions in an ac­count owned by one mem­ber,” Busi warns.

CLUB AC­COUNTS

John Manyike is head of fi­nan­cial ed­u­ca­tion at Old Mu­tual and he chal­lenges stokvels to use club ac­counts.

Club ac­counts are de­signed for group sav­ings and are of­fered by most banks. Their ben­e­fits in­clude bet­ter in­ter­est rates and are nor­mally open for a pe­riod of a year.

Dif­fer­ent banks also of­fer dif­fer­ent with­drawal op­tions. Some banks have bank charges if there are with­drawals be­fore the year-end no­tice. This is done to dis­cour­age stokvels from with­draw­ing their money be­fore time.

While other banks will ask for a 32-day no­tice for any money that will be with­drawn, oth­ers of­fer un­lim­ited with­drawals.

NE­GO­TI­AT­ING IS IM­POR­TANT

Ac­cord­ing to John, while stokvels tend to go for the trusted stokvel clubs that some of the big banks of­fer, you can ne­go­ti­ate with the bank for an in­ter­est rate that can make your money grow.

“Stokvels are not us­ing their bar­gain­ing power. You can bar­gain with your bank to give you a rate that will see you yield­ing more re­turns at the end of the year,” says John.

THINK OUT­SIDE THE BOX

John also mo­ti­vates stokvels to think big­ger about their money. Look at other in­vest­ment op­por­tu­ni­ties and not just sav­ing the money un­til the time comes to make the big with­drawal.

Stokvels can use the 12-month pe­riod to in­vest their money in other sav­ing in­stru­ment. They can look at other sav­ings op­tions like unit trusts and in­vest­ment ac­counts.

These sav­ings op­tions can help your money grow while wait­ing for the right mo­ment to start us­ing it.

“Stokvels never think about wealth cre­ation. Banks need those funds for liq­uid­ity and are will­ing to dis­cuss terms that can help you,” he says.

You can op­er­ate your stokvel like an in­vest­ment club by in­vest­ing in the stock ex­change or in other com­pa­nies. This re­quires mem­bers to do their home­work and un­der­stand what is in the mar­ket.

WITH­DRAWALS

“For the se­cu­rity of the stokvel, not ev­ery­one can with­draw or have ac­cess to the money while it is in the bank,” says John.

Banks re­quire a num­ber of sig­na­to­ries for with­drawals, in most cases two to three peo­ple. It’s im­por­tant to nom­i­nate peo­ple that the stokvel trusts, peo­ple who un­der­stand banks and can be able to ne­go­ti­ate good pack­ages for the stokvel.

These are peo­ple who will be able to put the best in­ter­ests of the group first.

Other banks re­quire three sign­ing mem­bers, two of whom must be present dur­ing any trans­ac­tion car­ried out on the stokvel’s ac­count.

It’s Im­por­tant to look out for great re­turns

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