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About this tool
Simulate a chit month by month — bids, dividends and foreman commission — to see what your bidding month really costs or earns.
A chit is auctioned every month: the member willing to accept the biggest discount takes the pot, the foreman keeps his commission out of that discount, and whatever is left is shared back to every member as dividend. This calculator runs the full term month by month — subscription of chit value divided by the number of months, a discount you set tapering from the first month to the last, commission capped at the foreman percentage, and dividend of (discount minus commission) divided by members — then tells you what your chosen bidding month costs or earns. It ends with an XIRR on the actual cash flows, so an early bid is priced as borrowing and a late bid as saving, against FD, RD, PPF, gold loan and personal loan benchmarks.
Open Chit Fund Calculator on AltFTool — it loads instantly in your browser.
Enter Chit value (₹) and Members / months in the left panel. The Monthly subscription (auto) tile immediately shows chit value ÷ months, and every figure below recalculates as you type — there is no calculate step.
Set Foreman commission (%), which the field labels against the Chit Funds Act cap of 5%, then drag the two Discount assumption sliders — Month 1 discount and the last month's discount — anywhere from 0% to 40%. Push either past 30% and a red warning notes that registered chits cannot discount that far.
Move the Your bidding month slider, or jump with the Earliest, Halfway and Last presets, then read You receive, Total you pay in, Dividends received, the Net gain or Net loss and the Effective annualised rate (XIRR on your monthly cash flows). Your row is flagged You bid in the Month by month table; Copy summary puts the whole breakdown on your clipboard and Reset to defaults restores the starting case.
An XIRR is solved on the real dated cash flows, so a chit becomes directly comparable with a loan rate or a deposit rate instead of a vague total.
It compares the timing of money in against money out and picks the right benchmark set — loan rates for an early bid, deposit rates for a late one.
Discounts above the statutory ceiling trigger a warning, and the foreman commission field is labelled against the legal cap.
Take the winning discount for that month, subtract the foreman's commission, and divide the remainder equally among all members. So on a Rs 5,00,000 chit with a 25% discount and 5% commission, Rs 1,25,000 less Rs 25,000 leaves Rs 1,00,000 to share; across 25 members that is Rs 4,000 each, reducing that month's subscription from Rs 20,000 to Rs 16,000.
The Chit Funds Act, 1982 caps the foreman's commission at 5% of the chit value, taken out of the discount each month. The Act also limits the discount itself, so the prize money handed to the winning bidder cannot be cut below 70% of the chit value.
Neither is universally better, because they are different transactions. Bidding early means taking the pot before you have paid it in, which is borrowing at whatever rate the discount implies; bidding last means you have subscribed throughout and collected dividends, which is saving. The calculator shows the effective rate for each so you can compare against the alternative you actually have.
Registered chits run under the Chit Funds Act, 1982 carry statutory protections that unregistered private chits do not, including a filed chit agreement and security deposited by the foreman. Default by other members, and foreman insolvency, remain the real risks — this tool models the arithmetic only and is not financial advice, so check the registration and take professional advice before committing.
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