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Top 10 Chit Fund Schemes in India (2024)



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Chit Funds are highly regarded in India as effective savings schemes known for yielding returns. Governed by the Chit Fund Act of 1982, these entities operate under stringent state government regulations. Membership in a Chit Fund scheme offers individuals the opportunity to secure a rotating cash prize or loan. This article provides an in-depth analysis of the ten leading chit-fund schemes, exploring their advantages and key aspects in detail.

What are Chit Fund Schemes?

Chit fund schemes are financial instruments wherein a group of members contributes a fixed amount regularly, thus creating a pool of funds. The corpus is awarded to a member via periodic auction, offering them a lump sum amount. Chit Fund Schemes serve as a savings and borrowing platform, providing financial flexibility. A chit-fund company facilitates and manages these schemes, overseeing the collection of contributions, conducting auctions, and ensuring regulatory compliance.

List of Top 10 Chit Fund Schemes in India (2024)

Chit fund schemes are a unique financial tool that systematically offers funds. The investment schemes enable members to bid for the pool amount periodically, with the highest bidder receiving the financial corpus. The following are the top ten chit fund schemes in India.

Gokulam Chits

Sree Gokulam Chit & Finance Co. Pvt. Ltd., operating under Gokulam Chits is a company that has been offering services for 54 years. The company’s Chit Fund Schemes, are facilitated through various branches in Tamil Nadu, Kerala, Karnataka, Maharashtra, Delhi etc. Gokulam Chits stands as a prominent player in the Chit Fund sector with its widespread presence and customer-focused approach.

Louis Chit Funds Private Limited

Louis Chit Funds Private Limited has been a leading chit fund company in Ernakulam since 1901. The company specialises in offering participants a platform for savings and credit. The Louis Chit Fund has an authorised capital of Rs 50,000 and a paid-up capital of Rs 48,000. The company’s focus on Chit Funds underscores its commitment to providing accessible and trustworthy investment avenues for individuals seeking diverse financial solutions.

Government of Kerala Linked Chitty

The Government of Kerala Linked Chitty is a government-backed Chit Fund Scheme. The bidding process involves participants bidding for the total pool, and the highest bidder receives the payout. With government backing, this Chitty scheme enhances credibility and security, offering a regulated and reliable investment avenue in Kerala.

Mysore Sales International

Mysore Sales International offers unique features in its Chit Fund Scheme, emphasizing the benefits of small initial investments. The schemes offered by Chit Fund company allows individuals with modest resources to benefit from disciplined savings and enjoy the advantages of a Chit Fund, creating financial inclusivity.

Margadarsi Chit Fund

Margadarsi Chit Fund offers a Monthly Chit Fund Scheme where participants contribute fixed amounts monthly. The investment schemes offered by the chit funds lie between Rs 2.5 lakh to Rs 1 crore. Founded by Ramoji Rao in October 1962, the company has become one of the largest chit fund companies in India with branches in Tamil Nadu, Karnataka, and Andhra Pradesh.

Shriram Chits

Shriram Chits is a reliable player in the Chit Fund Scheme domain. The fund is operational in Tamil Nadu, Maharashtra, Andhra Pradesh and Karnataka. Presently, the company caters to more than 2.5 million subscribers. The investment value of Shriram Chit funds ranges from Rs 25,000 to Rs 1,00,000.

Purasawalkam Santhatha Sanga Nidhi Limited

Purasawalkam Santhatha Sanga Nidhi Limited is an NBFC that was founded on June 06, 1987. The company’s paid-up capital reflects its financial strength, making it the oldest chit fund company in India. This institution offers a secure avenue for individuals seeking reliable investment opportunities.

Kapil Chit Funds

Kapil Chit Funds offers comprehensive services in the Chit Fund domain and has been in the business since 1981. With 265+ branches and a large choice of chit, the company offers diverse financial solutions. With a substantial authorized capital, Kapil Chit Funds has a total amount of Rs 5,00,000 which makes it a reliable player in the Chit Fund sector.

Guru Nanak Chit Fund

Guru Nanak Chit Fund Private Limited, with its authorized and paid-up capital equal to Rs 0.02 lakhs offers a secure Chit Fund Scheme for investors. With a focus on customer satisfaction and financial prudence, Guru Nanak Chit Fund provides a platform for individuals to participate in a disciplined savings and credit system.

Amruthadhara Chits and Finance Private Limited

Amruthadhara Chits and Finance Private Limited was founded on December 31, 1990 and is a non-government private company in Ernakulam. The company has an authorised capital equal to Rs 2.5 lakh and paid-up capital equal to Rs 0.46 lakhs. Amruthadhara stands out for providing a secure platform for individuals to engage in disciplined savings and credit systems.

Benefits of the Chit Funds Scheme

If you are thinking of investing in a chit fund scheme, then being abreast with the benefits helps make an informed decision. Here are the major benefits offered by the Chit Fund scheme.

  • Chit-fund schemes emphasise regular and disciplined savings, thus offering a systematic approach to financial planning and wealth accumulation
  • The organisation conducts regular auctions that enable chit-fund members to receive lump sum payouts regularly. This creates a financial net thus fulfilling various needs like education, investment, or medical treatment
  • Chit Funds distinguish themselves by offering interest-free borrowing, making it an attractive alternative for those seeking financial assistance without the burden of interest charges commonly associated with conventional loans.
  • Chit Funds play a crucial role in promoting financial inclusivity by providing a savings and credit platform. This inclusivity extends to individuals who may not have access to formal banking services, thus enhancing overall economic participation.

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How to Invest in the Chit Funds Scheme

  • Step 1: Learn the Basics

Before diving into Chit Funds, understand the concept, benefits, and risks. Familiarize yourself with regulations for a solid foundation.

  • Step 2: Set Your Goals

Define financial goals and assess Chit Funds’ alignment. Whether wealth creation or specific milestones, clarity guides your strategy.

  • Step 3: Choose a Trusted Company

Select a reputable Chit Fund company. Look for proven track records, credibility, and transparency.

  • Step 4: Do Your Research

Delve into terms, and compare interest rates, fees, and repayment options. A meticulous analysis empowers informed choices.

  • Step 5: Join a Chit Group

Select a reputable company, join a fitting Chit Group, and understand contribution dynamics.

Follow these steps, emphasize research, and confidently navigate Chit Funds.

How Do Chit Funds Scheme Work?

Chit Funds are formed when a group of individuals come together. The members contribute a fixed monthly chit fund schemes amount that helps create a financial pool. Then, the organisation conducts a bid for the total pool and the highest bidder wins and receives the lump sum amount. For instance, in a 12-month chit with a monthly contribution of Rs 10,000, the total pool is Rs 120,000. The bidding winner, say at Rs 100,000, gets the lump sum, and the cycle continues. Chit Funds Scheme thus combines regular savings with occasional lump-sum payouts for members.

What is a Mutual Fund?

A mutual fund is an investment fund that aggregates capital from multiple investors to invest in a variety of stocks, bonds, or other assets. These funds are overseen by expert fund managers and provide individual investors with access to a broad array of assets, offering possible returns while helping to reduce risk. Shareholders in a mutual fund possess shares that reflect their part of the fund’s assets. The appeal of mutual funds lies in their ease of access, expert management, and adaptability to different levels of risk tolerance, making them an appealing option for diversified investment strategies.

Difference between Mutual Funds vs Chit Funds

Mutual Funds and Chit Funds are different from each other in a lot of ways. They cater to different needs and financial problems. Both have their own set of pros, cons, go through the table below to know about the major difference between chit funds and mutual funds.

Criteria Mutual Funds Chit Funds
Nature Collective investment vehicle where funds from multiple investors are pooled to invest in diversified securities. Traditional savings and borrowing scheme where a group of individuals contributes money periodically for a common fund, awarded as a lump sum to one member through an auction.
Purpose Wealth creation, capital appreciation, and income generation through diversified investment portfolios. Savings, emergency funds, or short-term borrowing among a close-knit group.
Risk Generally lower risk due to diversification across various securities. Risks associated with market fluctuations. Higher risk due to the potential for default by members and lack of diversification. Default risk depends on the financial discipline of the group.
Returns Mutual Funds offer higher returns based on market performance. The overall returns depend on the fund’s Net Asset Value (NAV). The returns of Chit funds are predetermined and are lower as compared to mutual funds.


Regulation The mutual funds are regulated by SEBI (Securities and Exchange Board of India) to protect investors. The Chit Funds are not regulated by SEBI but by the judiciary and hence are not safe haven to invest.
Liquidity The mutual funds have high liquidity can investors can buy/sell units on the stock exchange. Chit funds have limited liquidity and members have to offer a fixed financial contribution for a predetermined period.


On a final note, the Chit Fund scheme is an investment tool in India that also fosters community-based finance. The investment pool funds received are offered to the needy based on their needs. One can go through the clauses prescribed by the company to choose the best chit fund company for you.

Frequently Asked Questions about Chit Funds in India

1. Can Chit Funds be considered a safe investment?

Yes, Chit funds regulated by the state government are considered a safe investment avenue as compared to other funds.

2. Is there any regulation for chit funds in India?

No, private sector chit funds are not regulated in India and only state-backed funds are regularised.

3. Are chit funds schemes legal in India?

Yes, the Chit Fund Act 1982, makes them safe and legal in India.

4. Who is in charge of regulating chit funds?

The state government controls and regularises the chit funds companies in India.

5. How to choose a reputable chit-fund company?

You can go through the clauses prescribed by the company and then choose a reputable chit-fund company.

6. What documents are required to join a chit fund scheme?

To join a Chit Fund Scheme, you typically need the following documents:

  • KYC Documents: Provide a government-issued photo ID (Aadhar card, passport, driver’s license) and proof of address (utility bills, rental agreements).
  • Passport-sized Photographs: Submit a few passport-sized photographs for identification purposes.
  • Income Proof: Chit fund companies may request income proof, such as salary slips or income tax returns.
  • Chit Agreement: Once you decide to join, you’ll need to sign a Chit Agreement outlining the terms and conditions.


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