Chit Fund Chart

What is the 1 Lakh Chit Format?

The "1 lakh chit format" refers to a chit fund scheme where the chit amount (the total pooled sum) is ₹1,00,000. This format is common and caters to individuals seeking manageable monthly contributions with the chance to access a lump sum during the chit tenure. The typical duration for such a chit is around 10 to 20 months, and each member contributes a monthly installment that includes the chit amount divided over the number of months plus commissions and fees.

How the 1 Lakh Chit Fund Works?

• Monthly Contribution (EMI): For a ₹1,00,000 chit over 20 months, the monthly installment can be around ₹5,300, which includes the principal amount, company commission (around ₹6,000 total over the period), and other fees.
• Auction/Bidding: Each month, members bid to determine the prize amount they wish to take after discounting a certain percentage (bidding margin). The highest bidder receives the chit amount minus their bid, and the bid amount is distributed as a dividend to other members, reducing their future installments.
• Commission: The chit fund company charges a commission, typically around 6% in the case of the 1 lakh chit, deducted from the total chit amount over the duration.
• Dividend: Members who do not win the auction receive dividends from the bidding margin, which decreases their payable monthly installments.

Sample 1 Lakh Chit Fund Chart (20 Months)

This chart from Nagashiva Chit Fund Pvt Ltd illustrates how dividends and bidding margins change monthly, affecting the net monthly payments and prize amounts for members.

Benefits of a 1 Lakh Chit Fund

• Enables access to lump sum money while continuing smaller monthly savings.
• Members get the benefit of dividends from others’ bids, reducing installment amounts.
• Useful for disciplined savings and access to credit without conventional loans.
• Flexible bidding allows members to choose when they want to avail the prize amount.
• Generally requires no collateral or complex formalities.

Conclusion

The 1 lakh chit format is a structured chit fund scheme suitable for individuals looking for a blend of saving and borrowing. It offers financial flexibility through monthly contributions with the potential to access lump sum funds via bidding. Understanding the chit fund chart helps participants make informed decisions about monthly instalments, dividends, and bidding strategies to maximize benefits.