Research by Finmark Trust reveals that more than 50% of stokvel members in the mass market do not have a bank account, 94% of members are black and 57% are women. In response to this, FNB has launched its Smart Solutions Stokvel Account.
This makes banking services more accessible to unbanked South Africans, thereby encouraging them to join the formal sector and better manage their finances. Stokvels, seen as savings for a specific item, event or emergency, are part of the informal savings market that has a strong tradition of creating a much-needed alternative for encouraging savings amongst previously disadvantaged communities.
Head of product and marketing, Jeff McDonald says, “Unfortunately, and especially towards the end of the year when most stokvels are closing their books for the year, members who do not have access to bank accounts to transfer funds saved by the group for the year become soft targets for criminals.”
“By opening this account, members are not only introduced to banking but are also encouraged to adopt safer and more effective ways of handling their finances. With a stokvel account, members are assured of greater security on their account as the risk of fraudulent activities is reduced and members are equipped with financial literacy skills.
No deposit, withdrawal fees
The account has no deposit or withdrawal fees charged. In order to open the account, a R100 opening deposit and at least two signatories are required. The account remains active for a maximum of six months after all funds have been withdrawn, allowing time for the group to resume savings.
As an added security feature, customers can also register for FNB’s inContact Pro, a messaging service that alerts up to three members of the stokvel via SMS each time there is a transaction on the account, so they are always updated about the activities on their account.
The stokvel account further supports the government’s call for people to save more, particularly in the current economic climate. According to Stokvel Times, both government and the financial sector have identified the need for more vigorous money management and keeping track of credit within the stokvel saving group arena.
Nedbank’s NedTerm looks like the best option. It has a high interest rate for relatively low amounts, no fees and provides for group savings. In terms of giving notice and withdrawing, it requires a minimum of three signatories. All signatories will require verification (ID and proof of residence) in terms of Fica regulations. Any person can deposit money into the account.
NedTerm is a notice deposit that requires a minimum deposit of R1 000 and a minimum of R100 for additional deposits. There is no minimum withdrawal amount, but withdrawals are subject to one day’s notice. Interest rates start at 7,15% for R1 000 and 7,45% for amounts of more than R10 000.
Other Nedbank options include the Club Account, which is operated by means of a book. Withdrawals and deposits (no minimum amount) can be made at any time at the branch. Interest rates are lower on this account, starting at 2,9% for R1 000 and 5,40% for amounts between R25 000 and R39 000.
Money-24 is a money market account requiring a minimum balance of R10 000. Additional deposits can be made at the branch. A minimum of R1 000 can be deposited or withdrawn and one day’s notice is required for withdrawal of funds. The rates are better at 7,30% for amounts of more than R10 000 and 8,78% for more than R20 000.
Absa has an Absa Club account for stokvel-type investments. It requires a minimum balance of R500 and an investment of R250 a month. For balances of less than R10 000 there is an administration fee. There are lucky draws with cash prizes for accounts with balances of R10 000 or more, but interest rates are not spectacular.