Being in the profession of lawyer and having back to back meetings with clients, you might forget to plan your finance. Having a fixed deposit account can help you with so.
Lawyers spend most of their time thinking about clients and their cases neglecting themselves and priorities. Despite the fact that you are working for a firm as a lawyer or have your own individual practice, it is very important to take a look at your own financial backups other than the clients. Being a lawyer, you definitely know what it feels like when stuck in an emergency of fiscal crisis; arranging funds can really get difficult in such a scenario.Thus, having a financial backup is utmost important.
Fixed deposits in such cases can act as a financial backup on which you can lean on. FDs being the safest investment are also the most preferred one in India. Rather than saving your funds, you can always go for investing it as the returns earned over it are high compared to a savings account.
If you have recently started or are just a year old in the fly, this can be the right time to invest as there can be times when you might need funds in future. Suppose you are planning to buy a house or buy a car or simply start an independent practice, you might require funds, and for that, you need to set a financial base or backup. Planning in advance can rather help you than applying for a mortgage. You can reduce quite of your financial stress by investing now.
Apart from banks, there are also many Non-Banking Financial Companies (NBFCs) that offer fixed deposit. Also, Company offer a higher FD interest rate than that of banks. Now, applying for FD will not only benefit you with high returns, there are also various schemes you can gain from.
Benefits of Fixed deposits:
Unlike the other investment options, fixed deposit does not depend upon market conditions. Thus, this makes it a safe investment option. Since other high-risk investments depend upon the market conditions, there is no such guarantee and accuracy of the returns earned. Furthermore, this investment can also incur you loss. However, this is not the case with fixed deposits. Besides, many NBFCs are also granted ICRA’s MAAA rating and CRISIL’s FAAA rating it signifies they are reliable and safe for investment.
Being a safe investment option, fixed deposits also offer a flexible tenure option. The investment sets you free to choose any tenure period ranging from twelve to sixty months. Besides you can also go for reinvesting after the maturity of your FD account.
Interest plays a vital role during your investment phase as the returns you earn are totally depended on it. Since interest rate offered by financial institutions differ, it is essential to compare the Fixed Deposit interest rates offered by each financial institution and then apply. Besides, if you are a senior citizen, you can get the benefit with a special and higher interest rate as senior citizenFD's have higher interest rate than normal FD accounts.
In case, if you are planning to invest a lump sum amount and if the interest offered over it exceeds over INR 10,000, then you might have to pay taxes. To escape from this tax deduction, you can either split the money and invest it in different FD accounts, or you can apply for a Section 80C to gain benefits from the tax deduction.
You should not spend a lot of time thinking about whether to invest or not; rather investment is something that you should be done as soon as possible. However, investing now can help you have a good financial backup which can be used in the case of a fiscal emergency and can avoid debt situation.
Stories by Aman Khanna