Members bid for the pooled money in an auction, with the highest bidder taking the money after deducting their discount and the company's commission.

Contact a registered chit fund company, choose a scheme, and complete the required documentation.

Members must be 18 or older, have a stable income, and provide ID and address proof.

Your money is safe if the chit fund is registered and follows government regulations. Verify the company’s authenticity before investing.

Maintaining proper records.
Conducting auctions in the presence of all members.
Sharing monthly statements.

Yes, but it depends on the scheme's terms. Early withdrawal may involve penalties or forfeiture of benefits.

Risk of default by other members.
Fraudulent companies.
Liquidity risks if the fund is mismanaged.

Check if the company is registered under the Chit Funds Act, 1982. You can also verify its license and reviews from other customers.

Late payments usually incur penalties. Persistent default may result in expulsion from the chit fund, and legal actions may follow to recover the dues.

It depends on the scheme offered by the company. Amounts can range from ₹250 to several thousands per month.