Frequently Asked Questions

1. Will my money be safe with Chit Zone?

The money you are depositing with Chit Zone is equal to the money in your own hands. Chit Zone is known for its high levels of integrity and honesty.

Owing to these qualities, they display highest levels of genuinity to each of their customers. They have not defaulted to a single customer in their entire tenure of operations. Even in some stray cases where payments had to be delayed to customers due to some external factors, the same was paid to them along with reasonable interest. We always consider your money as your money and just do the act of safeguarding and multiplying it.

2. Give me convincing reasons to join Chit Zone

There are many reasons to substantiate why you must join Chit Zone. Some of them are enlisted below in a detailed manner for your clear understanding :-

  •  The people associated as the Management team are from different industry verticals.
  •  The rich commercial experience they carry with them makes Chit Zone a reliable venture for the customers to invest their valuable money.
  •  Chit Zone is a cash rich organization since it belongs to a business group that is highly established in the society.
  •  Chit Zone offers a percentage discount to all the customers who are regular in their chit payments. The only condition that is applied here is a cutoff date every month before which the dues need to be paid by the customers.
  •  Chit Zone puts the comfort level of customer first. To enhance customer experience with them, they provide collection of Chit amounts at their door step.
  •  Chit Zone has technically strong professionals on board who plan to make the Company technically driven. Working towards the same, they have decided to incorporate online payment methodologies in their website. The discount payments every month will be adjusted online by means of NEFT to the customers' account.
  •  Owing to the high levels of honesty each one of the managing members of Chit Zone possess, they plan to implement SMS system on receipt of payments and discount information month on month.

3. Why must I invest in Chit Zone instead of depositing my money in other fund managers like Mutual Fund or Banks?

Chit funds must be looked as small savings which can be utilized by the investor at times of needs and contingency situations. Chit Funds provide loans every month during the complete tenure of the Chit. This will contribute in a huge manner to the investors in times of emergency. The cost of loans is cheaper than any other forms. Loans can be obtained in an easy manner without involving much hassles and paper work. Owing to all the above, the rate of interest obtained from investing in Chit Funds is slightly higher than the same in other modes of investment. For people who are regular in paying the complete investment for the full term, the benefits are innumerable in terms of returns.

4. Can I become a Prized Subscriber?

Any one participating in a Chit group can become a prized subscriber and there is no hidden agenda to this. If you have lifted the chit or in other terms, if the chit amount has been paid to you during any given month, you are the prized subscriber.

5. Who do you term as a non-prized subscriber?

Any subscriber who has not taken the chit during the given months or any subscriber who has not be paid the chit amount during the chit period will be termed as a non-prized subscriber.

6. What exactly are the benefits availed from investing in Chit Fund?

  •  The bid amount called for makes the participants eligible for prize money which can be availed during emergency situations.
  •  Those who want to take the bid during the second half of the duration will gain the maximum interest rate in the market when compared with any other financial products with banks and other venues.
  •  When a loan is availed, the interest rate that the participant pays is much lesser than the one existing in the market.
  •  The force chit funds exert on saving little amounts month on month helps many people outreach their dream easily.
  •  Any participant of the chit scheme who pays all his monthly installments in a perfect manner within the stipulated date every month is offered a percentage of discounts by Chit Zone.

7. Is there any benefit if the chit amount is taken within the first 6 months period? Is it really a discount or loss to the investor?

The chit amount is considered as a discount after taking into account the real cost of the funds involved and the interest that needs to be dispersed out. The investor who takes the chit amount within the first 6 months gets more than what he has till then paid and repays the excess amount he had taken in split installments till the end of the chit period. This excess amount that is paid back by the investor who had taken the loan is termed as chit loss.

8. Explain what is Auction discount?

The difference between the total chit value and the actual value at which the chit is taken during a monthly auction is termed as the Auction discount.

9. What is called an Auction in a typical chit scenario?

In a typical chit scenario, an auction is held every month to identify all the non-prized subscribers of the chit scheme who desire to avail the chit amount at the maximum permissible discounted rate. The only condition laid for all the non-prized subscribers is that they must have paid all the monthly installments without defaulting any of the same. Whoever bids the highest possible bid amount within the 5 minutes of auction time is given the bid.

10. What does Chit dividend mean?

Usually 5% of the chit value is considered as the commission for the chit fund company. Reducing this amount from the auction discount gets us the actual dividend to be paid to the complete group who participate in the chit scheme. This group dividend is what is divided as equal amounts to be dispersed to every member after the auction. This distribution does not happen physically but is reduced in the next installment that needs to be paid by individual members of the group.

11. What does a lot mean?

There may be situations when more than one non-prized subscriber of the auction group desires to take the chit amount on a given month, token numbers are allotted to all the members. Tokens are drawn from the lot pot and the holder of the token number which is drawn out is announced as the Prized subscriber. This procedure of selecting one prized subscriber by drawing a lottery is termed as Lot.

12. Is there anything called "Coming to open"?

Coming to open is a concept that comes into existence when none of the participating members in the chit group are willing to bid availing the maximum allowed discount limit, the auction is said to be coming to open for all members to participate.

13. Typically how many guarantors or sureties must be available?

Prosperity Chits insists on providing minimum 3 guarantors or sureties for all types of chits. These guarantors or sureties must not be family members of the chit holder. The average annual income of these guarantors or sureties should be more than at least 20% or the percentage announced from time to time on the fund's liability in the future.

14. How does the Chit Fund Company benefit?

The 5% commission that is charged by the hit Fund Company for handling the complete process is accounted towards service charges. Typically, the services provided by the foreman are :-

  •  Gathering people to form a minimum sized group for the chit.
  •  Periodically collect the minimum amount accepted from all members in the group.
  •  Co-ordinating payment formalities of the prize money for the chosen subscriber every month.
  •  Collecting the appropriate amount from prized subscribers month on month.

15. Does the Chit Fund Company fall under any regulations?

Prosperity Chit fund functions as per the guidelines provided by Chit Fund Act of 1982 regulated and monitored by Government of India Revenue Department.

16. What is the reason for asking guarantors or sureties?

When we look at the functioning pattern of a chit fund company it is clear that the company collects equal agreed installments from all members of a chit group on a monthly basis. Reducing the 5% foreman commission or chit fund commission the balance is paid to one of the non-prized member who bids for the maximum amount allowed. The main risk involved for the Chit Fund Company as well as the other subscribers in the group is that irrespective of the amount paid by the non-prized member, he is given the maximum auction amount even if it is higher than the former. This risk is taken in concurrence with all the participating members with the faith in the member who takes the auction. The faith works on the fact that he will pay the excess amount he has taken in periodic installments within the stipulated time so that the foreman is able to make payment to the other subscribers in the group. To avoid loss to all the subscribers and the foreman in the case of the person defaulting payment, the whole group will get affected. Guarantors or sureties are required for safeguarding the interests of the other subscribers and the foreman.

17. If a subscriber defaults, what will be the typical action taken against him?

If a subscriber defaults to make payments, the following are the different kinds of steps taken against him according to the default type :-

  •  A fixed amount or amounts fixed on a case to case basis is collected from the defaulting subscriber.
  •  Subscriber who default to pay for a successive 3 months period are removed from the scheme automatically.
  •  6% of penalty will be collected from such defaulters and dividends denied.
  •  He will be sued in the court of Law if the amounts due to be paid by him is not settled by his guarantors or sureties.
  •  If a subscriber is removed from the chit group, the amount paid by him till his removal will be paid back to him after the completion of the chit period deducting the Company's commission from the same.

18. After joining a chit group, if I want to withdraw back, is it permitted?

Any subscriber is allowed to withdraw after joining a group under the following conditions :-

  •  The foreman finds another subscriber to replace the walking out subscriber so that chit management gets even.
  •  If he is not able to find an alternate subscriber, the chit company will bear the share in the payment to be paid to the prized subscriber month on month.
  •  The original amount paid by the withdrawing subscriber will be settled to him only at the end of the chit period after deducting the Company's commission from the same.

19. How quickly will I get the money after I win the auction during any given month?

The money will be dispersed as soon as the documentation formalities are completed by the Company and the Subscriber.

20. Are there any Income Tax related benefits in saving through Chit Funds?

While the dividends earned by subscribers every month is accountable for tax calculation purposes, Chit Loss or the excess payment done can be reduced from the total income for income tax calculations.

21. What are the acceptable modes of payment?

Payment of Chit amounts are accepted by various modes like Bank Transfer (NEFT), Cash, Demand Draft, Pay Order and Cheque.

22. Is there any ceiling on number of chits that can be taken in chit groups that are same?

Three chits is the maximum limit fixed for any subscriber to participate in the same group.

23. Are there different kinds of Chit groups in Prosperity Chit Fund?

The different chit groups available with Chit Zone range between 50 thousand rupees to 25 lakhs.

24. What is the typical duration of these chits in Chit Zone?

The normal duration for which chit groups are formed is for a period of 25 month, 40 months and 50 months.

25. Do I have the option of making payments in the branches of Chit Zone in different locations?

To increase the comfort levels of the customers, Prosperity Chit Fund allows payment of chit amounts in any of its nearest branches available near the customer's place.

26. Is there any benefit in joining the Vacant Chit?

Any member joining a vacant chit group is eligible to receive all dividends that are payable till the date of joining the same.

27. What is the difference between a Registered Chit Fund Company and an Unregistered Chit Find Company?

The major difference between a registered and unregistered Chit fund Companies lies in the regulation aspect of the same. While Registered Chit Funds come under the regulation of Chit Fund Act of Government of India, Unregistered Chit Fund Companies are individual entities which do not come under Government regulations.

The risk involved in investing in an Unregistered Chit Fund Company is very high for the stakeholders.