Traditional Chits Vs. eChits

Traditional Chits Vs. eChits

In our previous articles, we have made a clear comparison of how chits are a safe option for savings. We also made a caution that registered chits only provide you the much needed security. In this article, we will make a quick comparison of chits and eChits. For the benefit of the audience, we will define both the terms:

Traditional Chits: Chit is a sort of community funding where a group of individuals come together, contribute a predefined amount every month (period) and one person among the group will take the lump sum. This process will continue till all the group members get the amount. This is traditional way of doing chits.

eChits: The same process enabled on technology to create transparency and trust are termed as eChits. With the advancement of technology and mobiles, chits have gone digital with anytime, anywhere access. IBG eChits is one of India’s first digital chit fund company.

Here is a quick comparison between a traditional chit and an eChit

eChit
Mutual Fund(SIP) Recurring deposit
Ease of selection Easy Difficult Easy
Product understanding Easy Difficult Easy
Return 12-14% 10-15% 6-7%
Risk No risk High No Risk
Ability to borrow Available (lower than market rate) Not available Not available
Principal Guarantee Guaranteed Risk of losing principal Guaranteed
Financial discipline Helps you to continue investing Drop out risk is high Drop out risk is high
More money than you save At any point of time you
will get a lot more money than you saved
At most you will get 10-15%
returns on your money but considerable risk of losing principal also
Only money what is saved
minus discontinuation charges
Regulator Registrar of Chits SEBI RBI

From the table it is quite evitable that eChits are a preferred option for the sake of convenience, transparency and trust. IBG eChits being a pioneer in this aspect has adopted the latest technology platform on blockchain to service its customers significantly. For more information, you can visit us at www.ibgechits.com or call us at +91 9010 820 002.

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