Long before mutual funds and UPI, Indian families had their own money systems. Many were remarkably wise: they built saving habits, protected women and spread risk across the family. A few need an update for a world of bank accounts, inflation and online fraud. Here is a guide to the traditions most of us grew up with — what each was really doing, and the modern version of it.
Gold on Dhanteras and Akshaya Tritiya
Buying gold on auspicious days built a habit of saving something every year, and gave women an asset in their own name. Indian households are estimated to hold more than 25,000 tonnes of gold — more than the official gold reserves of the world’s five largest central-bank holders put together.
Wise take: keep the habit, update the form. Jewellery carries making charges, often 8–25% of the gold value, that you never get back when you sell, plus the worry of storing it safely. Gold ETFs and gold mutual funds let you buy small amounts at market price, without making charges or locker fees. A practical rule many planners use is to keep gold to about 5–15% of your investments.
The gullak (clay piggy bank)
A child drops coins into a clay pot that can only be opened by breaking it. It teaches two lessons at once: small amounts add up, and saved money should be hard to reach. The breaking ceremony even marks the goal — the gullak is opened for something that matters.
Wise take: the modern gullak is a SIP. It is automatic, it grows quietly, and it is best left untouched until its goal arrives. For a child, a minor’s mutual fund folio, with a parent as guardian, can play exactly that role.
Bishi, chit funds and kitty parties
A group of friends or neighbours each put in a fixed sum every month, and one member takes the whole pool each round — by turn, by lottery or by auction. Economists call this a rotating savings and credit association. Versions exist across the world, from the Korean gye to the West African susu and the Mexican tanda. It works on trust and social pressure: nobody wants to be the one who misses a payment.
Wise take: the discipline is excellent; the risk is the person holding the money. Registered chit funds are regulated under the Chit Funds Act, 1982. Unregistered schemes posing as chit funds have cost lakhs of depositors their savings. If anyone promises returns far above bank rates, walk away. You can keep the peer pressure without the risk: each friend runs a SIP in their own name, and the group checks in once a month.
Streedhan
Streedhan is the gold, cash and property a woman receives before, at or after her marriage — from her parents, her in-laws, relatives or friends. Indian courts have repeatedly held that it is her absolute property, which she alone controls, even if it is kept with her husband’s family.
Wise take: it was an early form of financial security for women. Today, a woman’s own bank account, investments held in her own name, her own term and health cover, and a nominee on every folio do the same job better — and are easier to prove and to use when needed.
The extra rupee in a shagun
Gifts of ₹101, ₹501 or ₹1,001 carry an extra rupee so that the amount does not end in zero — a wish for continuity and growth.
Wise take: that one rupee is a lovely picture of compounding. Some families now gift a child a SIP instead of cash. ₹1,001 a month from a child’s first birthday, at an assumed 10% a year, would be worth about ₹5.1 lakh by the 18th birthday — a shagun that keeps growing. The return is an illustration, not a promise.
Muhurat trading on Diwali
Stock exchanges hold a special one-hour trading session on Diwali, when many families buy a token share or fund units to begin the new Samvat year.
Wise take: a good reason to review your portfolio once a year — check SIPs, goals and nominees — not a reason to trade on tips.
The joint family purse
Pooled incomes, shared expenses and elders as financial guardians kept many families safe through hard times: one member’s bad year was absorbed by the others. Indian tax law even recognises the Hindu Undivided Family as a separate taxpayer.
Wise take: the real strength was shared planning. Even in nuclear families, a yearly family money meeting keeps it alive.
A family money meeting, in one hour
- Goals: what are we saving for, by when, and is each goal on track?
- Protection: is the health cover enough for today’s hospital bills, and does every earning member have term cover?
- Paperwork: does every bank account, folio and policy have a nominee, and does everyone know where the documents are?
- Next year: by how much will we raise our SIPs?
What the traditions have in common
Look closely and every one of them does the same few things: it makes saving a habit, it makes money hard to spend on impulse, it protects the weaker members of the family, and it ties money to a purpose. Those principles are as sound today as they were a hundred years ago. Only the tools have changed.
Frequently asked questions
Is digital gold the same as a gold ETF?
No. Gold ETFs and gold mutual funds are regulated by SEBI. “Digital gold” sold through apps is not regulated by SEBI, so check who holds the metal and what protection you have before buying.
Can a child have a mutual fund account?
Yes. A minor’s folio is held in the child’s name with a parent or legal guardian operating it until the child turns 18.
Which of these did your family follow? Tell us on WhatsApp — and visit the Story Corner for more fun facts and myths.
Figures above are illustrations based on assumed rates of return and are not a promise or guarantee of future returns. Mutual fund investments are subject to market risks, read all scheme related documents carefully. WishWiseWealth is an AMFI-registered Mutual Fund Distributor (ARN-188221).