Stokvel accounts from FNB are based exactly on the long standing South African tradition of joint savings in a “Stokvel”. The idea is that a group of individuals pool their money and save jointly. This is traditionally towards some type of profitable investment. Which in different situations could be anything from financial products to farming equipment.
In current times most stokvels are usually based around the purchase of shares or unit trusts.
The FNB stokvel product is sold on two major factors. These being that there are no deposit fees and no cash withdrawal fees. This makes it easy for stokvels to increase their investment account. By small increments on a weekly or monthly basis.
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They can also withdraw any amount for investment elsewhere or for administration costs for the stokvel. This is a big appeal. Since by only being charged a fixed bank fee per month the administrators of the stokvel can easily budget for their banking costs. And the free cash deposits encourage and help smaller stokvels to start putting away money.
This allows a bunch of young people or humble labourers to put away any amount of money.
Whereas if they were paying hefty deposit fees, small investment or savings accounts can drastically lose their value in banking and administration fees.
Benefits of Stokvel Accounts From FNB
Stokvel accounts from FNB give your free unlimited deposits, withdrawals and balance enquiries. They also claim to provide highly competitive interest rates. Which of course is the whole point of investing for a common purpose or profit motive.
A difference between this type of account and some which provide better interest however, is that the money is available immediately. Until in a call account, Money Market, Park-It account or in some unit trusts.
This is a nice benefit for joint investing, because if one of the individuals wants to pull out his or her investment for other expenses for any reason. They can do so easily, without needing the consent of the rest of the stokvel.
If however they have invested the money in certain unit trusts or long term investment accounts, the group could lose out by a withdrawal being made.
They could lose out in terms of penalty fees payable for early withdrawal. And or in terms of interest benefits of long term investment.
FNB does make it relatively easy to open a stokvel account. They’ll give you all the necessary documentation if you visit a nearby branch.
So there are not a lot of barriers to starting some small scale investment with some friends or family. But before you do it’s a good idea to check that you’re all of a similar mindset in terms of investment.
Some Choices with Different Accounts
Check your thoughts in terms of how much you want to invest, how long you want to leave the money before using it. Whether you want a zero-risk, low-interest investment. Or whether you’re perhaps more interested in something a bit riskier which could turn out a bit more profitable too.
If so perhaps look at some unit trusts. Or if you’re properly willing to take risks then perhaps you should be looking at derivatives and CFDs. But for that you need to study learn a lot about trading on the stock market first.
And make sure that the others in the stokvel are aware of the possibilities and potential pitfalls of the stock market.
If you’re just starting out small and don’t have the capital, firstly to risk, or secondly to purchase fancier financial products. Then joint savings in something like an FNB stokvel account is certainly the way to go.