The process to avail a bank loan is very tedious and time consuming. On the other hand, the process to bid and avail a chit is simpler with less documentation. Based on the amount of the chit, the documentation required will vary but will be relatively easier.

Stock markets have always been promoted as one of the best investment options. Many people invest their hard earned money trusting brokers, but the matter of fact is that stock markets are highly volatile and subject to fluctuations based on a variety of internal organizational and external conditions. Some stocks might yield good returns, but the risk factor is very high and you have to be constantly watching the markets to ensure you minimize any possible loss. On the other hand, investment in an established chit fund company can give you peace of mind and safer returns.

FD is a fixed lump sum investment that is illiquid. A chit on the other hand is systematic investment of fixed installments that can be availed by the subscriber at any time during the duration of the chit.

A recurring deposit works similar to chit in terms of monthly installments, but the main difference here is in the percentage of return. The returns at the end of a recurring deposit period is very minimal, even lesser than a fixed deposit. A similar investment in a chit fund will yield way better returns.