Page 32 - Book2E

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Savings accounts pay a fixed interest rate on a lump sum of money. Generally, the longer you are willing to leave the money in the account, the greater the interest rate you receive.
Cooperative savings groups: When people don’t have the resources to save enough to invest significantly, they sometimes form coopera- tive savings groups. By saving as a group, they can pool their monies and thereby accumulate a larger amount of money more quickly to make an investment. The group shares the risks, and they can rely on each other for help when an emergency arises. Some groups pur- chase property, some buy commodities, and some purchase a business and share the operating responsibilities. Profits from the venture are distributed based on the contribution each member made. When considering a savings group, each member of the group should express their goals and expectations clearly and specifically. “To save for retirement” is not a clearly defined goal. How much and by when should be part of the definition.
Savings groups are usually more successful when the members of the group already know and trust each other. The more similar group members’ interests, goals, backgrounds, and incomes are, the less likely they are to quarrel and the more likely they are to make decisions that benefit everyone. Many cases involve paying money into a coop- erative to purchase property, etc. The most successful savings groups have eight to fifteen members. Decide how often the group will meet, how much each member can contribute, what the rules and regulations will be, and who the leaders will be and for how long. A successful savings group generally has the following characteristics:
• A common bond
• Clear objectives
• Agreement to follow the established rules
• Honesty and the willingness to work hard to achieve the objectives
Saving Makes Good Cents