How Chits Work
Never joined a chit before? Let's make it simple.
You’ve probably heard people talk about chit funds without ever really getting how they work. Most explanations make it sound more complicated than it is.
A chit is a group of people saving together. Every month, the money everyone puts in goes to one member through an auction. Need your money sooner than later? You can bid for it.
The idea is simple: you save regularly, and when you need a larger sum, the chit gives you an opportunity to access it during the tenure.
What Is A Chit Fund?
Everyone Saves Together. One Member Gets Their Turn Each Month.
A fixed group of members comes together for a set period and agrees to contribute every month.
Each member pays the agreed monthly amount, creating a common pool.
Every month, one member gets access to the pool through the auction process.
The same process continues month after month until every member gets their turn.
What actually happens each month
Example- ₹12,50,000 Chit
Chit Value: ₹12.5 Lakhs
Tenure: 25 Months
Monthly Instalment: ₹37,000 to ₹50,000*
Every month, you pay your instalment, and that amount joins the pool along with everyone else’s contribution.
The auction happens. Anyone who needs the money that month can bid.
The winning bidder receives the amount, as per the auction result and the chit’s terms.
The next month, the same thing happens again with another member.
You keep saving. The group keeps moving. And everyone gets their turn by the end of the chit.
How Does The Auction Work?
Need the money before the chit ends? You can bid for it.
This is the part that makes a chit different from just saving on your own.
If you need a bigger amount partway through the tenure, you jump into that month’s auction.
You place a bid, following the chit’s rules. Whoever wins the auction gets the payout, along with the applicable discount.
And that’s the whole process. No need to overcomplicate it.
Let's Understand It With ₹12.5 Lakhs
Because numbers make more sense when you can actually see them.
Say you’ve joined B.L.K. Chits’ ₹12.5 lakh scheme. You’re looking at a 25-month tenure, with monthly installments somewhere between ₹37,000 and ₹50,000, depending on how the auctions play out.
Now say you need a bigger amount midway through, maybe for a wedding, maybe for your business. You’d join that month’s auction.
What you actually walk away with depends on the auction discount and any other applicable deductions.
Chit Value: ₹12.5 Lakhs
Tenure: 25 Months
Monthly Instalment: ₹37,000 to ₹50,000*
A chit can work in two ways.
It can help you save regularly towards your financial goals, while also giving you the option to access a larger sum during the tenure when you need it.
In other words, your chit can adapt to your financial needs, whether you’re focused on saving today or need funds for something important tomorrow.
Who Is The Foreman?
Someone has to keep the whole thing moving.
That's the foreman's job. They run the day-to-day of the chit, making sure contributions come in, records stay accurate, auctions happen on schedule, and payouts go out to the right person.
The foreman looks after:
- Your contributions: Tracking who's paid and when.
- The records: Keeping everything documented properly.
- The auctions: Running the monthly process.
- The payouts: Making sure the winning member actually gets paid.
- The communication: Keeping everyone in the loop on what's coming up.
It’s a background role, but it’s the one that keeps everything running on time.
Why Do People Choose Chits?
Because life doesn’t always follow a savings plan.
Maybe you’re saving up for a wedding. Maybe you need working capital for your business. Maybe it’s your kid’s education you’re planning for. Or maybe you just want a reason to actually stick to saving every month.
A chit gives you that structure, a fixed monthly habit, while still leaving the door open to a lump sum earlier if life asks for it.
A fixed monthly amount turns saving into a habit, not a maybe.
Bid in an auction if you need the money sooner.
Use it as part of how you plan for major expenses.
B.L.K. Chits currently runs ₹3 lakh, ₹5 lakh, ₹12.5 lakh and 25 lakh schemes.
It runs on member contributions and monthly auctions, not the stock market’s mood.
FAQs
Do I have to bid every month?
No. If you don’t need the money that month, just carry on with your regular installment.
When's the auction held?
We have various batches. Each batch has an auction on different dates, between the 1st and 15th of the month.
Can I get my chit amount before the 25 months are up?
Yes, join the monthly auction whenever you need it, subject to the usual rules and eligibility.
What chit amounts do you offer?
Right now: ₹3 lakh, ₹5 lakh, ₹12.5 lakh and 25lakh.
How long does a chit run?
25 months, for our current schemes.
How do I pay my monthly installment?
UPI, bank transfer, cheque, or cash, whatever works for you, within our standard process.
Is the payout amount always the same?
No, it depends on how that month’s auction goes and any applicable deductions.
What if something's still not clear to me?
That’s exactly what we’re here for. Ask us about the instalment, the auction, the payout, the tenure, anything at all, before you decide to join.
Still Have Questions? That's Completely Fine.
A decision like this deserves a straight answer, not jargon.
Tell us what you’re saving up for, and we’ll help you figure out which chit scheme actually makes sense for you.