What is a consórcio?

#The short version

A consórcio is a group-purchase system that lets people buy big-ticket items, like cars and homes, without borrowing from a bank. Members contribute a set amount every month into a shared fund. Each month, one or more members are selected to receive a credit and buy their asset. Everyone keeps contributing until the whole group has been served. It is used by roughly 13 million people in Brazil and is regulated by the country's central bank.

#How it works, step by step

1. 1.A group forms, and everyone agrees to contribute a fixed monthly amount for a set number of months.
2. 2.The contributions build a common pool that funds purchases for the group.
3. 3.Each period, members are selected to receive their credit, by scheduled draw or by offering to advance more of their share.
4. 4.The selected member buys their car or home outright with that credit.
5. 5.Everyone keeps contributing until every member in the group has received their credit.

#Why it is trusted and regulated

The consórcio is not an informal arrangement. In Brazil it is supervised by the central bank, administrators must be licensed, and member contributions are protected under strict rules. That oversight is a big part of why so many people trust it with major purchases. It is an ordinary, mainstream way to buy a car or a home, not a fringe alternative.

#How Savings.Club brings it to the US

Savings.Club takes this proven model and rebuilds it for American members. Contributions go into a Common Fund held in an irrevocable trust, with funds FDIC-insured at US Bank, and the trust is administered through the Jackson Hole Trust Company with a member-elected board. When your turn comes, you receive a Purchasing Voucher to buy your car or home outright. Instead of interest, you pay one flat fee. On a $35,000 car, a member keeps about $17,643, roughly 28% less than financing it with a bank.