Smart Money Tips

Money Clubbing beats Recurring Deposits in their game!

By April 21, 2018 No Comments

Saving money means putting money in a Recurring Deposit, isn’t it?

Money Clubbing is the “latest” way of setting aside a fixed amount of money regularly (weekly, fortnightly or monthly)

And, it is 10 times more powerful than an RD!

In a Money club one can pick up multiples ( 6-10x) of what one has saved till date but in RDs  one gets back only what they save with some paltry interest.

The way you save money in a Money Club is the same as you do in an RD but the returns you can make, if you chose not to pick the funds early on, can be eye-popping!

Here is an example of a real Money Club on our platform:

Table #1: Assume you invest in an RD with a bank

You earn Rs 70/- interest in 7 months.

The table below shows you the interest earned :

  • Monthly Installment = ₹500
  • Tenure = 7 months
  • Rate of interest = 6% per annum.
500 INR Monthly R.D.
Installment Rate of interest (Annualised) Months M. V. Interest/Month
500 6.00% 7 518 18
500 6.00% 6 515 15
500 6.00% 5 513 13
500 6.00% 4 510 10
500 6.00% 3 508 7
500 6.00% 2 505 5
500 6.00% 1 502 2
Total 3500     3570 70

Table #2: Now, Assume you invest the same amount “WEEKLY”

You earn Rs 16/- interest in 7 weeks.

The table bleow shows you the interest calculation:

  • Weekly Installment = ₹500
  • Tenure = 7 weeks
  • Rate of interest = 6% per annum.
500 INR Weekly R.D.
Installment Rate of interest (Annualised) Weeks M. V. Interest/Week
500 6.00% 7 504 4
500 6.00% 6 503 3
500 6.00% 5 503 3
500 6.00% 4 502 2
500 6.00% 3 502 2
500 6.00% 2 501 1
500 6.00% 1 501 1
Total 3500     3516 16

Table #3: You invest in your “WEEKLY MONEY CLUB”

You earn Rs 222/- as interest!!

The data in the table below is from a real Money Club where users have contributed ₹500 (approx.) weekly for 7 weeks. For the same investment of Rs 500 per week the investor made 95.40% annualised returns!

R.D. comparable interest earned in a 500 INR weekly Money Club
Installment Rate of interest (Annualised) Weeks M. V. Interest earned
464 95.40% 7 521 57
471 95.40% 6 520 49
443 95.40% 5 481 38
421 95.40% 4 450 29
491 95.40% 3 516 25
494 95.40% 2 511 17
494 95.40% 1 502 8
Total 3278     3500 222

Conclusion:

Monthly R.D. Weekly R.D. Weekly Money Club
Installment ₹ 500 ₹ 500 ₹ 500 (approx.)
Tenure 7 months 7 weeks 7 weeks
Returns ₹ 70 ₹ 16 ₹ 222
Rate of Returns 6 % p.a. 6 % p.a. 95.40 % p.a.

 

The Eye Popping returns are possible because

  1. the interest rate is determined by actual real-time bidding amongst the club members
  2. the bank’s (spread) between the borrower and lender is also eliminated and distributed among the members.

Money Clubbing really unlocks the power of your hard earned Money. However, there is no free lunch! High returns come with associated risks as well. Please ensure that you are aware of the risks before you plan to dive in!

Happy Money Clubbing!  😊

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