Choosing the right account
Stokvels now have different banking options to choose from, writes Xoliswa Mhlaba
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.
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.
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While other banks will ask for a 32-day notice for any money that will be withdrawn, others offer unlimited withdrawals.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.
“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