Stokvel-friendly accounts; which ones are fair?

Group saving is safer than it used to be

Back in the day, money was hidden under a mattress, or stashed in a group member’s personal bank account, which blocked access to other members.

This was until the 1980s, when Nedbank, in association with the National Stokvel Association of South Africa (NASASA), instituted the first bank account for stokvels. Since then, other banks have jumped on the bandwagon, competing on price and service. 

Stokvels are frequently used to save for, and purchase, groceries, funerals, and even properties. Currently, the stokvel economy is worth approximately R50 billion, and nearly 40% of the South African adult population belongs to a stokvel group.

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We compared Stokvel accounts from four of the largest banks, to help you and your fellow Stokvel members make the best choice.

The results are shown in the table below.

How do you start a stokvel?

Stokvel groups are constituted outside of the banks. The members’ contributions are determined by what they can afford, says Standard Bank’s spokesperson.

Once the stokvel constitution has been formed, and members have agreed on their monthly contribution, a commitment is established to contribute without fail, which is normally a clause defined in the group constitution. 

You must select party members such as a secretary, treasurer and chairman. But most importantly, you must select authorised signatories who are empowered to represent your stokvel regarding regulatory and legal matters.

The signatories will be legally mandated by members to open a bank account, withdraw funds, and play other significant roles with regards to the management of the group, says Standard Bank.

 Why should you be part of a stokvel?

According to Standard Bank, this is how stokvels can benefit you:

• They are a great way to avoid temptation and force yourself to save, as your monthly monetary obligation to the group must be fulfilled.
• It’s hard to withdraw from a stokvel when all of the members are your friends.
• Stokvels are easy to set up, and stokvel bank accounts can offer added benefits.
• Members nominate chairpersons and treasurers from within the membership. Members know that the people looking after their hard-earned cash can be trusted.
• Everybody is working towards a common objective, which is safeguarded by the stokvel's constitution.

There is no doubt that many of the new stokvels being registered are used to help members handle major family and financial needs. These include pocket-draining projects, such as paying school and university fees, says Standard Bank.

This is why you need to choose a banking service provider that will not only offer you great prices, but also attractive additional benefits.