What is “Reverse EMI”? [ REMI ] - Let us discuss an example:
You have deposited a sum of Rs. 10 Lakhs in a bank as fixed deposit. You need a regular monthly cash inflow for your planned expenses.
Now, the FD rates have come down substantially which you cannot match with the requirements.
If you just park in the SB account, the yield is very low. Or if you keep it as FD you have to take a loan, only 75% value will be given with additional 2% charged over the interest rate given to the FD. The flexibility is tight.
As an investor one should have the facility to decide what percentage of the investment one should get for his/her regular needs. Not what the bank gives.
A new type of Deposit is suggested named as ‘Reverse EMI’. You pay EMI to the bank for the loan taken by you. “Reverse EMI” is where the bank pays EMI for your deposit in the bank. While bank may credit the interest whatever is fixed by them, the monthly return is fixed by you as an optional 1% or 1.25% per month.
TDS is deducted only for the interest portion credited. Senior citizens will welcome this new scheme when implemented.
After the initial investment of 3 years, the closing balance may restored with a top up for the original amount.
Example: |
|
|
0.50% |
1.00% |
p.m. |
|
Year |
Investment |
Principal Received |
Interest Credited |
Reverse EMI x 12 |
TDS 10.00% |
Closing Balance |
1 |
10,00,000 |
61,677.82 |
58,322.18 |
120,000.00 |
5,832.00 |
938322.18 |
2 |
938,322.18 |
65,481.96 |
54,518.04 |
120,000.00 |
5,452.00 |
872840.22 |
3 |
872,840.22 |
69,520.75 |
50,479.25 |
120,000.00 |
5,048.00 |
803319.47 |
|
|
196,680.53 |
163,319.47 |
360,000.00 |
16,332.00 |
|
| Investment | Deposit Rate | Withdrawl % | Deducn % | |||
| 1000000 | 0.50% | 1.00% | Monthly Rate | 10.00% | ||
| 6.00% | 12.00% | Yearly Rate | ||||
| Month | Op.Balance | IntrestCredit | Rev.EMI | Balance | TDS | PayOut |
| 1000000 | ||||||
| 1 | 1,000,000.00 | 5,000.00 | 10,000.00 | 995,000.00 | 500.00 | 9,500.00 |
| 2 | 995,000.00 | 4,975.00 | 10,000.00 | 989,975.00 | 498.00 | 9,502.00 |
| 3 | 989,975.00 | 4,949.88 | 10,000.00 | 984,924.88 | 495.00 | 9,505.00 |
| 4 | 984,924.88 | 4,924.62 | 10,000.00 | 979,849.50 | 492.00 | 9,508.00 |
| 5 | 979,849.50 | 4,899.25 | 10,000.00 | 974,748.75 | 490.00 | 9,510.00 |
| 6 | 974,748.75 | 4,873.74 | 10,000.00 | 969,622.49 | 487.00 | 9,513.00 |
| 7 | 969,622.49 | 4,848.11 | 10,000.00 | 964,470.60 | 485.00 | 9,515.00 |
| 8 | 964,470.60 | 4,822.35 | 10,000.00 | 959,292.95 | 482.00 | 9,518.00 |
| 9 | 959,292.95 | 4,796.46 | 10,000.00 | 954,089.41 | 480.00 | 9,520.00 |
| 10 | 954,089.41 | 4,770.45 | 10,000.00 | 948,859.86 | 477.00 | 9,523.00 |
| 11 | 948,859.86 | 4,744.30 | 10,000.00 | 943,604.16 | 474.00 | 9,526.00 |
| 12 | 943,604.16 | 4,718.02 | 10,000.00 | 938,322.18 | 472.00 | 9,528.00 |
| 58,322.18 | 120,000.00 | 5,832.00 | 114,168.00 | |||
| 13 | 938,322.18 | 4,691.61 | 10,000.00 | 933,013.79 | 469.00 | 9,531.00 |
| 14 | 933,013.79 | 4,665.07 | 10,000.00 | 927,678.86 | 467.00 | 9,533.00 |
| 15 | 927,678.86 | 4,638.39 | 10,000.00 | 922,317.25 | 464.00 | 9,536.00 |
| 16 | 922,317.25 | 4,611.59 | 10,000.00 | 916,928.84 | 461.00 | 9,539.00 |
| 17 | 916,928.84 | 4,584.64 | 10,000.00 | 911,513.48 | 458.00 | 9,542.00 |
| 18 | 911,513.48 | 4,557.57 | 10,000.00 | 906,071.05 | 456.00 | 9,544.00 |
| 19 | 906,071.05 | 4,530.36 | 10,000.00 | 900,601.41 | 453.00 | 9,547.00 |
| 20 | 900,601.41 | 4,503.01 | 10,000.00 | 895,104.42 | 450.00 | 9,550.00 |
| 21 | 895,104.42 | 4,475.52 | 10,000.00 | 889,579.94 | 448.00 | 9,552.00 |
| 22 | 889,579.94 | 4,447.90 | 10,000.00 | 884,027.84 | 445.00 | 9,555.00 |
| 23 | 884,027.84 | 4,420.14 | 10,000.00 | 878,447.98 | 442.00 | 9,558.00 |
| 24 | 878,447.98 | 4,392.24 | 10,000.00 | 872,840.22 | 439.00 | 9,561.00 |
| 54,518.04 | 120,000.00 | 5,452.00 | 114,548.00 | |||
| 25 | 872,840.22 | 4,364.20 | 10,000.00 | 867,204.42 | 436.00 | 9,564.00 |
| 26 | 867,204.42 | 4,336.02 | 10,000.00 | 861,540.44 | 434.00 | 9,566.00 |
| 27 | 861,540.44 | 4,307.70 | 10,000.00 | 855,848.14 | 431.00 | 9,569.00 |
| 28 | 855,848.14 | 4,279.24 | 10,000.00 | 850,127.38 | 428.00 | 9,572.00 |
| 29 | 850,127.38 | 4,250.64 | 10,000.00 | 844,378.02 | 425.00 | 9,575.00 |
| 30 | 844,378.02 | 4,221.89 | 10,000.00 | 838,599.91 | 422.00 | 9,578.00 |
| 31 | 838,599.91 | 4,193.00 | 10,000.00 | 832,792.91 | 419.00 | 9,581.00 |
| 32 | 832,792.91 | 4,163.96 | 10,000.00 | 826,956.87 | 416.00 | 9,584.00 |
| 33 | 826,956.87 | 4,134.78 | 10,000.00 | 821,091.65 | 413.00 | 9,587.00 |
| 34 | 821,091.65 | 4,105.46 | 10,000.00 | 815,197.11 | 411.00 | 9,589.00 |
| 35 | 815,197.11 | 4,075.99 | 10,000.00 | 809,273.10 | 408.00 | 9,592.00 |
| 36 | 809,273.10 | 4,046.37 | 10,000.00 | 803,319.47 | 405.00 | 9,595.00 |
| 50,479.25 | 120,000.00 | 5,048.00 | 114,952.00 | |||
| Months | ||||||
| 1 to 12 | 1,000,000.00 | 58,322.18 | 120,000.00 | 61,677.82 | 5,832.00 | 114,168.00 |
| 13 to 24 | 938,322.18 | 54,518.04 | 120,000.00 | 65,481.96 | 5,452.00 | 114,548.00 |
| 25 to 36 | 872,840.22 | 50,479.25 | 120,000.00 | 69,520.75 | 5,048.00 | 114,952.00 |
| 36 Months | 163,319.47 | 360,000.00 | 196,680.53 | 16,332.00 | 343,668.00 | |
| Investment | 1,000,000.00 | |||||
| Add: Intrest Credited | 163,319.47 | |||||
| Balance | 1,163,319.47 | |||||
| Less: RvEMI Paid | 360,000.00 | |||||
| Closing | Balance | 803,319.47 | ||||
| RvEMI | 360,000.00 | |||||
| Less: TDS | 16,332.00 | |||||
| 36 Months | Net Pay Out | 343,668.00 | ||||
| Example: 1 | ||||||
| 0.50% | 1.00% | p.m. | ||||
| Year | Investment | Principal | Interest | Reverse | TDS | Closing |
| Received | Credited | EMI x 12 | 10.00% | Balance | ||
| 1 | 10,00,000 | 61,677.82 | 58,322.18 | 120,000.00 | 5,832.00 | 938322.18 |
| 2 | 938,322.18 | 65,481.96 | 54,518.04 | 120,000.00 | 5,452.00 | 872840.22 |
| 3 | 872,840.22 | 69,520.75 | 50,479.25 | 120,000.00 | 5,048.00 | 803319.47 |
| 196,680.53 | 163,319.47 | 360,000.00 | 16,332.00 | |||
| Example: 2 | ||||||
| 0.75% | 1.00% | p.m. | ||||
| Year | Investment | Principal | Interest | Reverse | TDS | Closing |
| Received | Credited | EMI x 12 | 10.00% | Balance | ||
| 1 | 10,00,000 | 31,268.97 | 88,731.03 | 120,000.00 | 8,874.00 | 968,731.03 |
| 2 | 968731.03 | 34,202.22 | 85,797.78 | 120,000.00 | 8,579.00 | 934,528.81 |
| 3 | 934528.81 | 37,410.62 | 82,589.38 | 120,000.00 | 8,259.00 | 897,118.19 |
| 102,881.81 | 257,118.19 | 360,000.00 | 25,712.00 | |||
