Group savings, also known as investment clubs or savings clubs, can be a great way to invest, especially for individuals who want to pool their resources, learn about investing, and collectively work towards financial goals. We recommend that you approach group savings with a clear plan, open communication, and a commitment to collective decision-making and financial responsibility.
Members of the group typically contribute a fixed amount of money at regular intervals, such as monthly or quarterly. The pooled funds are then used to make investments into unit trusts, which could include stocks, bonds, real estate, or other assets, depending on the group’s goals and preferences. The benefits of group savings included, but are not limited to, sharing of investment costs, such as fees as well as financial discipline and commitment. Groups can have any number of members and will need to meet a minimum investment amount of R1000 if it is a monthly debit order or R50 000 if it is a single lump sum. Groups can also opt to put in a lump sum and top up via monthly debit order, which will be collected from the group’s bank account.
Yes, only authorised members can initiate a withdrawal process and they will have to take into consideration the rules of the selected investment solution as notices and withdrawal fees might be required. There are also tax implications to consider.
