Reverse EMI [REMI]

 

What is “Reverse EMI”? [ REMI ] - Let us discuss an example:

1. 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.

2. Now, the FD rates have come down substantially which you cannot match with the requirements.

3. 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.

4. 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.

5. 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.

6. TDS is deducted only for the interest portion credited. Senior citizens will welcome this new scheme when implemented.

7. 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

Split Loans for Better Performance

Digital Payment Paired Strings between Customers and Banks

Digital Payment Paired Strings between Customers and Banks

Paired Payment strings contain the details of the payer and the payee integrated with the payer’s bank. It is impossible to take the benefit for a different pair other than the intended receiver.

Allowing the user to make a mistake and then correcting is not the right approach rather don’t allow the mistake to happen. We prepare a drawing first, before constructing and then complete the building as per the plan. Before completing the transaction it is secured by verifying the destination entry and the destination address and then carried out. Millions of unauthorized transactions can be prevented by this method.

Payment transaction flow should follow a triangular path to ensure safety. Initiating a payment always starts with a pair of transaction entries from the source, one to the bank and the other to the destination. Here destination is the receiver who transfers the entry to the bank which ensures the destination address and assures the ‘Account Payee’ feature. The banks role is to authenticate the paired digital payment strings and allow them for completing the transaction. The benefit of this method is that the accounting is done at both the points of source and the destination with the corresponding entries at the bank. The full payment cycle is completed.

As an extension of UPI payments & receipts, a paired payer/payee address may be created like one given below:

up@hdfcbank#upp@kotak .  

For the rever

Reverse EMI for Senior Citizens

Self planned Reverse EMI after Sixty.

Deposit interest rates are falling. Need for funds increases. How to bridge the gap? Keeping all the savings in Fixed and Cumulative Deposits may not be a wise plan especially for Senior Citizens. Interest yield is not comfortable leading to shortage of liquidity. After allocating a reasonable amount in interest yielding Deposits, one should think of drawing both interest and principal that will increase the cash flow and make an efficient use of their resources in their life time as Reverse EMI.

From the amount deposited a desired percentage is drawn every month which is more than the normal interest payable for that deposit. While interest is added to the principle a fixed Reverse EMI is paid to the depositor. The scheme is flexible allowing varying the percentage of the withdrawal on the deposit amount. In blocks of three or five years the balance amount from the original deposit may be continued for a further period of three years or topped up to the desired value. TDS is only for the interest credited and not fog the REMI amount.

To maintain a high Utility Quotient, one should enjoy the fruits of the hard earning and not necessary to block a large amount that yields a meagre amount. A model working sheet is given below:

REMI may be flexible varying like 1.25, 1.5, o 1.75% per month on the invested amount.

			8.75%	1.25%	p.m.
Year	Investment	Principal	Interest	Reverse	TDS	Closing
		Received	Credited	EMI   x 12	10%	Balance
1	10,00,000	65,420	84,580	1,50,000	8,459	9,26,121
2	9,26,121	72,122	77,878	1,50,000	7,788	8,46,211
3	8,46,211	79,373	70,627	1,50,000	7,063	7,59,775
4	7,59,775	87,215	62,785	1,50,000	6,280	6,66,280
5	6,66,280	95,699	54,301	1,50,000	5,432	5,65,149
		3,99,829	3,50,171	7,50,000	35,022

			8.75%	1.50%	p.m.
Year	Investment	Principal	Interest	Reverse	TDS	Closing
		Received	Credited	EMI   x 12	10%	Balance
1	10,00,000	96,652	83,348	1,80,000	8,335	8,95,013
2	8,95,013	1,06,176	73,824	1,80,000	7,383	7,81,454
3	7,81,454	1,16,479	63,521	1,80,000	6,352	6,58,623
4	6,58,623	1,27,624	52,376	1,80,000	5,240	5,25,759
5	5,25,759	1,39,679	40,321	1,80,000	4,033	3,82,047
		5,86,610	3,13,390	9,00,000	31,343