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Chit Fund Yield & Dividend Calculator

Calculate monthly chit fund installments, dividend distribution, agent commission, and net effective return/yield.

₹
%
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Capped at 5% by the Chit Funds Act, 1982.

Base monthly installment
₹25,000
₹5,00,000 ÷ 20
Foreman commission
₹25,000
Per month, from the discount
First-month installment
₹18,750
Total paid over the chit
₹4,25,000
vs ₹5,00,000 received
Month-wise chit schedule
MonthAuction discountDividendYour installmentPrize money
1₹1,50,000₹6,250₹18,750₹3,50,000
2₹1,44,737₹5,987₹19,013₹3,55,263
3₹1,39,474₹5,724₹19,276₹3,60,526
4₹1,34,211₹5,461₹19,539₹3,65,789
5₹1,28,947₹5,197₹19,803₹3,71,053
6₹1,23,684₹4,934₹20,066₹3,76,316
7₹1,18,421₹4,671₹20,329₹3,81,579
8₹1,13,158₹4,408₹20,592₹3,86,842
9₹1,07,895₹4,145₹20,855₹3,92,105
10₹1,02,632₹3,882₹21,118₹3,97,368
11₹97,368₹3,618₹21,382₹4,02,632
12₹92,105₹3,355₹21,645₹4,07,895
13₹86,842₹3,092₹21,908₹4,13,158
14₹81,579₹2,829₹22,171₹4,18,421
15₹76,316₹2,566₹22,434₹4,23,684
16₹71,053₹2,303₹22,697₹4,28,947
17₹65,789₹2,039₹22,961₹4,34,211
18₹60,526₹1,776₹23,224₹4,39,474
19₹55,263₹1,513₹23,487₹4,44,737
20₹50,000₹1,250₹23,750₹4,50,000

How this is calculated

Each month the auction discount, less the foreman's commission, is shared equally among all members as a dividend, which reduces that month's installment.

Discounts are modelled as tapering from high to low across the chit, which is the usual pattern — bidders are most desperate early.

Chit Fund Yield & Dividend Calculator: how it works

A chit fund is a rotating savings scheme where the monthly instalment falls as the auction discount is shared among members.

How a chit works

A fixed number of members contribute monthly for the same number of months. Each month one member takes the pot by bidding a discount, and the discount, less the foreman’s commission, is distributed equally among all members as a dividend that reduces the next instalment.

Instalment = (Chit value ÷ Members) − Dividend

Dividend = (Auction discount − Foreman commission) ÷ Members

Worked example

Worked example · ₹5,00,000 chit, 20 members, 20 percent discount

Given

  • Chit value: ₹5,00,000
  • Members: 20
  • Auction discount: ₹1,00,000
  • Foreman commission: 5%

Working

  1. 1Base instalment = 5,00,000 ÷ 20 = ₹25,000
  2. 2Foreman commission = 5% of 5,00,000 = ₹25,000
  3. 3Distributable = 1,00,000 − 25,000 = ₹75,000
  4. 4Dividend per member = 75,000 ÷ 20 = ₹3,750
  5. 5Instalment this month = 25,000 − 3,750

You pay ₹21,250 this month, and the winner receives ₹4,00,000

Early versus late

Taking the pot early means borrowing: you receive a discounted amount now and continue paying instalments for the full term. Taking it late means saving: you collect dividends throughout and receive close to the full chit value at the end.

Legality and risk

  • Ask to see the registration certificate and the chit agreement before joining.
  • Registered chits require the foreman to furnish security with the Registrar.
  • Dividends received are taxable as income; the discount you pay when bidding is not deductible.

Based on

  • Chit Funds Act, 1982

Frequently asked questions

Divide the chit value by the number of members for the base instalment, then subtract your share of the dividend, which is the auction discount less the foreman’s commission divided among all members.

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