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. |
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| 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.
- Weekly Installment = ₹500
- Tenure = 7 weeks
- Rate of interest = 6% per annum.
The table below shows you the interest calculation:
500 INR Weekly R.D. |
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| 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 |
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| 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. |
Assuming an SIP of Rs.3000 per month with The Money Club
| Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Max Interest | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 | 6.6 |
| Interest Assumption | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 5 | 6 | 5 | 7 | 5 |
| Saving Amount | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 | 3000 |
| Available Amount | 3000 | 6000 | 9373 | 12755 | 16414 | 20117 | 24171 | 28573 | 32847 | 37663 | 42616 | 48313 |
| Total Clubs | 0 | 1 | 1 | 2 | 2 | 3 | 4 | 4 | 5 | 6 | 7 | 8 |
| Input | 0 | 5927 | 5918 | 11941 | 11897 | 17846 | 23798 | 23926 | 29684 | 35847 | 41402 | 47927 |
| Output | 0 | 6300 | 6300 | 12600 | 12600 | 18900 | 25200 | 25200 | 31500 | 37800 | 44100 | 50400 |
| Unused Surplus | 3000 | 73 | 3455 | 814 | 4517 | 2271 | 373 | 4647 | 3163 | 1816 | 1213 | 387 |
| Monthly Earning | 0 | 373 | 382 | 659 | 703 | 1054 | 1402 | 1274 | 1816 | 1953 | 2698 | 2473 |
| Total Kitty | 3000 | 6373 | 9755 | 13414 | 17117 | 21171 | 25573 | 29847 | 34663 | 39616 | 45313 | 50787 |
If you invest Rs.3000 per month in Money Clubs (i.e around 40+ clubs for 1 year), the total interest that you can earn will be around Rs.15,500 at a whopping 41 % p.a. rate of returns.
| In Money Club | In Bank RD (@7%) | |
| Total Input (Rs) | 36000 | 36000 |
| Total Output (Rs) | 50787 | 37449 |
| Interest Earned (Rs) | 14787 | 1449 |
| Returns Rate % | 41% | 7.3% |
| Total Clubs invested in | 43 | na |
The Eye Popping returns are possible because
- the interest rate is determined by actual real-time bidding amongst the club members
- 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!
