Reverse EMI

                                                                                                                                                                                        Blog By     Akkumahanthi Sowmya
Smart Savings & Purchases.

When you think of money management, savings is what strikes your mind and its a great start as well. In order to afford large purchases such as a car, a home, etc. These require a huge amount of savings beforehand. And let's face it if we spend the money what we have for the present and we would be left with nothing or maybe less money for the future purchases. Let us assume a case, you have a stash of money and you are keeping them in your drawer, in your piggy bank is there any additional amount added to your money? I guess its a NO. so when there is a possibility to gain more amount while saving it in the banks and earning interest on them, so why not this way of savings?

Whenever you want to purchase a product and may not be having sufficient money companies have your back by going you the ‘EMI’ facilities to those products, EMI id nothing but Equated Monthly Instalment.  As the name suggests the total amount which has to be paid is equally divided into different months and that person is liable to pay that particular amount in installment manner till the total amount reaches. EMI facilities are used in most of the companies now, it is dependent on multiple factors such as principal borrowed, a rate of interest, the tenure of the loan and monthly/annual resting period.
Companies have become even smarter by giving the chance to the customers to acquire their product then and then with the EMI facility where people may be thinking its very nice and they get attracted towards the offer and make the deal. But, there is a better option to the customers that they still may not be knowing that is the REVERSE EMI, here what you do is you start saving your money in the bank from the very beginning or whenever you are planning to buy that product and start saving it in the bank this will help you to get interested on the amount you are saving. So here basically what you are doing is instead of taking the EMI scheme where you will be paying the amount to the company and interest is added to the payment, you are saving that amount in the bank and gaining interest on the savings which helps you to obtain the product in future and not by paying the extra amount to the company.

Let's  take an example, you would like to purchase an iPhone 8 plus (64 GB) and which is presently costing  69,499 bucks. There are many installment policies offered by the different companies in order to sell their product, like in Amazon we are having the options of many banks as of now let me take the example of ICIC Bank where they are providing you the duration month starting from payment of Rs.23,670 with the annual interest of 13.0% for 3 months total amount of the final product would be 71,010 rupees, to the Rs.3,370 with 15.0% as interest and costing the total product of rupees  80,874.

As you can see in the above example the amount to be actually paid is so less compared to the amount paid later this would totally opposite in the case of reverse here as long as you are saving your money in the bank the more you will be able to get the interest charged on the product and when you are actually paying the amount to obtain your commodity there will the decrease in the price of the product as well so here you are doubly gained fro both the sides. This is the smartest of the way of saving money and purchasing the desired product. 

A blend of human and technology is the key to success.

BBA Second Year, Bhavan's

By: Akkumahanthi Sowmya
      BBA Second year, Bhavan's
Twitter: @sowmya_12 

#importance of savings
#smart savings
#Reverse EMI
#EMI vs. Reverse EMI.

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