Ever since South African banks created stokvel bank accounts, life became easier for stokvel members.
THE BANK ACCOUNT: Riaan Appelgrein, senior manager for Customer Financial Solutions at Standard Bank, says that it is becoming important for stokvels to consider having a bank account with a reputable financial institution to keep their hard-earned cash safe and also earn interest. “Times are changing. There are now more and more stokvel members who have realised that utilising a wide variety of value adding banking products and options available to them is wise,” he says.
“These stokvels are able to significantly improve their buying power and deliver better value to members. “Most banks offer stokvel accounts that start paying interest on balances from as little as R100. Riaan says these accounts are also designed to receive individual contributions from members.
“Members can deposit their contributions directly to this account, which makes it much safer than collecting the money at meetings and then keeping a large amount in someone’s house or waiting for the bank to open to make a deposit,” he says.
“They are also able to link many other interest bearing investment accounts such as Money Market, Notice Deposit and Fixed Deposit accounts. “He says that when members pay their money into a bank account, all members benefit because generally the higher the balance in the account, the higher the interest rate.
“The longer the money stays in the account, the more interest is earned,” he says. Having a bank account also brings another great advantage to stokvels that want to invest in longer-term investment options.“Banks have certified financial planners available who can advise stokvels on the many options available,” says Riaan.
STOKVEL BANKING BENEFITS: Other benefits that banks offer to stokvels:
- It is easier to keep track of deposits and the money being taken out of the account.
- You can easily get access to statements that accurately reflect balances and interest earned which makes reconciliation much easier.
- Distribution of funds to members can be done directly into their bank accounts, which removes the risk associated with carrying large amount of cash.
- Members have the opportunity to learn more about the various convenient and value-adding banking products that the bank offers.
MANAGING FINANCES: When you start a stokvel, you must make sure that you identify only people you can trust as fellow members who share common values and savings goals. According to 1Life, as a stokvel, you must have two to three authorised signatories on the bank account and this should be set up so that none of the authorised signatories can make withdrawals without the signatures of the others. The stokvel should also be audited regularly and financial records must freely be shared with all members.