STOKVELS: SAVING BETTER TOGETHER

a group of people who trust each other, it shouldn’t be hard to choose the bookkeeper(s). Also, even though there’s a bookkeeper, you need to keep a record of your own contributions, Nolu says. This is especially important if you each pay a different monthly amount. ◗ Schedule meetings It’s important to have regular meetings. The bookkeeper must share the balance sheet with the members at these meetings and the contribution book must be open so everyone can see it, Nolu says. When you get together, you’re supporting each other in your savings efforts. If anyone feels like quitting, the other members can offer encouragement to convince them to stay. ◗ Choose how to save It’s important that all the members agree on the method of saving. Clubs that want to keep their investment fairly simple, usually opt for a straightforward savings account. Nolu says money should never be paid into an individual’s personal bank account. Instead, open a new account specifically for the savings club.

Certain banks offer specific stokvel accounts but the most important thing is to establish the fees and interest involved. The fees must always be less than the interest earned. Fixed notice deposits – where, for example, you need to give six or 12 months’ notice before money can be withdrawn – usually offer better interest rates than savings accounts where you have immediate access to the money.

A financial planner can also provide more information about unit trusts, where your capital will be protected and you might earn a higher interest rate than in an ordinary savings account. Many unit trusts focus on beating the inflation rate, so your investment grows without losing any value.