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OTE2601 EXAM ANSWERS OCTOBER 2024
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THE DOCUMENT PROVIDES AN IN DEPTH ANALYSIS OF THE EXAM QUESTIONS ,ANSWERS HAVE BEEN PROVIDED IN FULL DETAIL AND REFERENCES ARE INCLUDED
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OTE2601EXAM
OCTOBER
2024
, QUESTION 1
Stokvels have become an essential part of South African culture, offering a communal way for
people to save and invest money. These savings groups are popular because they provide
members with a sense of community, support, and shared financial goals. With the rise of
stokvels, banks have begun to offer specialized stokvel accounts, providing members with a
more secure option compared to informal stokvels. This essay will compare the stokvel
accounts offered by FNB (First National Bank) and Nedbank, while also discussing the
different types and roles of various stokvels.
A stokvel is a savings pool where a group of individuals contributes a set amount of money
regularly. The group has full control over how to use this money, which can be paid out
monthly or kept for a lump sum at the end of a specified period. Stokvels have been part of
South African society for many years, dating back to the 19th century. Over 800,000 stokvel
groups exist today, saving around R44 billion annually, demonstrating their significance in
promoting saving and financial planning among South Africans.
Types of Stokvels
1. Contribution Stokvels: Members contribute a fixed amount regularly, and the total is
paid out to each member in turn.
2. Basic Stokvels: These are designed for specific expenses, like holidays or medical bills,
rather than general savings.
3. Savings Stokvels: Focused on maximizing savings over time, members decide when to
release the funds.
4. Grocery Stokvels: Members pool money to buy groceries in bulk, which helps save on
household costs.
5. Purchasing Stokvels: Used to buy income-generating assets that can be rented out for
profit.
6. Family Stokvels: Focused on family needs, often used for significant expenses like car
purchases or land.
7. Investment Groups: Members pool funds to invest and share profits.
8. Property Stokvels: Allow individuals to invest in property together, making real estate
accessible.
9. Funeral Cover Stokvels: Provide financial assistance for funeral costs, which is crucial
in many communities.
Comparing Stokvel Accounts of FNB vs. Nedbank
FNB Stokvel Account
Benefits:
No Monthly Fees: FNB does not charge monthly account fees, making it accessible for
members.
Immediate Access: Members can access their savings at any time.
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