Just as some people exercise more when they have an exercise buddy, others find it easier to save when they do it in a group. For the undisciplined spender who is constantly cashing in their savings, a stokvel, or group savings club, could be the answer. But stokvels are worth taking note of for another reason. Did you know that money saved in a stokvel account often benefits from better interest rates and lower fees than you would pay if you put your money in a regular account? Sound good? This is what you need to know if you want to start a stokvel.
Types of stokvelsA stokvel is started for a specific reason. The members of the stokvel share a common goal for saving such as December groceries or a wedding or investing in property or the stock market. For example, a group of young professionals may get together and save in a stokvel so they can buy properties to rent out.
Current estimates from the National Stokvel Association of South Africa (Nasasa) are that there are 810 000 stokvels, with nearly 40% of South Africa’s adult population belonging to a stokvel. Each year, these members collectively contribute an estimated R50 billion to their stokvels.
Getting startedIf you have a number of friends, colleagues or neighbours who have a similar savings goal and want to start a stokvel, have an initial meeting where you agree on the goal, the number of members and how much you will contribute each month. Then you can start thinking of names for your stokvel and draw up your constitution.
There is no set number of people in a stokvel, which can contain as few as 5 members or as many as 100.
ConstitutionThis is an important document that must be drawn up when you start a stokvel. You can view a sample constitution on the Nasasa website. The constitution should include guidelines on:
- How often and in what manner money is to be collected each month
- When and where, and how often, you will meet
- How the money will be invested
- Under what circumstances withrawels may be made
- What happens if a member fails to make contributions or decides to leave the stokvel
- What happens if a member dies
- The process if a new member decides to join the club after inception
The constitution is particularly important as it provides a reference point and can pre-empt disagreements within the group before they occur.
The bank accountThe next step is to open a bank account for your stokvel. Try and avoid cash if you can as it can be a security risk. You should have two to three authorised signatories on the bank account and it should be set up so that none of the authorised signatories can make withdrawals without the signature of the others. Shop around for bank accounts to find the one that most suits your stokvel. You can opt for a regular bank account, or one designed specifically for stokvels such as the ones below.
- First National Bank Stokvel Account is aimed at people saving as a group, with no monthly fee.
- Absa Club Account requires a minimum deposit of R50 to open, with zero transaction fees and tiered interest rates. Savings are available on a 32-day notice period.
- Nedbank Stokvel Account requires a R100 opening deposit, zero account maintenance or transaction fees and discounts on grocery items if R1 000 is deposited into the account in each of the first ten months of the year.
- Standard Bank Society Scheme savings account requires R100 opening deposit, provides anytime access to funds and offers cash prizes in regular draws as long as the account balance stays above R5 000. There is also no account fee if the balance is kept above R5 000.
- Postbank Bakgotsi Stokvel account has no minimum balance and no monthly management fees.
- African Bank MyWorld account is a shared bank and savings account with some free transactions and low charges on cash deposits and withdrawals.
When you’ve set up your constitution and opened a bank account, you’re ready for your first official stokvel meeting.
Final wordWhen you start a stokvel, make sure that you identify people you trust as fellow members who share common values and savings goals. Good luck and start saving today!
Learn more about the different stokvel bank accounts in South Africa:
Original article published on: 28th July 2014
Updated on: 22nd July 2019
Updated on: 28 October 2020