LIC FD Scheme : LIC (Life Insurance Corporation of India) is one of the most trusted and oldest insurance companies in the country. But did you know that LIC is not limited to insurance plans alone? LIC also provides various investment options, and one of the most popular among them is the LIC Fixed Deposit Scheme, known for its safety and assured returns.
LIC offers multiple types of special fixed deposit schemes. Below, you will find complete information such as What is LIC FD Scheme? What are its features, interest rates, eligibility, documents required, and the investment process?
Let’s understand everything in detail.
What is LIC FD Scheme?
The Fixed Deposit Scheme offered by LIC is actually operated by LIC Housing Finance Limited (LIC HFL). This FD scheme is also known as a Corporate Fixed Deposit. It is designed for investors who prefer safe investments with guaranteed and higher returns.
- Minimum investment amount: ₹1,00,000
- Maximum limit: No upper limit
- Interest Rate: 7.25% to 7.75% per annum
- Senior citizens receive an additional 0.25% interest
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Tenure: 1 year to 5 years
If you invest ₹2,50,000 in the LIC FD Scheme, your return will depend on the tenure and interest rate chosen.
Key Features of the LIC FD Scheme
- The FD scheme is offered by LIC Housing Finance Limited.
- Current interest rates range between 7.25% and 7.75% per annum.
- Senior citizens get an extra 0.25% interest, making the effective rate higher than 7%.
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FD tenure ranges from 12 months to 60 months.
Interest Payment in LIC FD
In the LIC Fixed Deposit Scheme, interest is credited every month.
For example:
If you invest ₹25,00,000 at an annual interest rate of 7.8%, you will receive:
- Monthly interest payout: ₹16,250
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Annual interest earnings: ₹1,95,000
This makes it a good option for those looking for regular monthly income.
Minimum Amount & Tenure
To invest in the LIC FD Scheme:
- Minimum deposit : ₹1,00,000
- Maximum deposit : No limit
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FD tenure : 1 to 5 years
Tax Benefits Under LIC Fixed Deposit
If you invest for 5 years, you can claim tax exemption under Section 80C of the Income Tax Act.
In addition:
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If your annual interest income is less than ₹40,000, you can submit Form 15G/15H to avoid TDS deduction.
Documents Required for LIC FD Scheme
You need the following documents to open an LIC Fixed Deposit:
- Identity proof
- Address proof
- PAN card
- Passport-size photograph
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Bank account details
You can visit your nearest LIC HFL branch to invest. Fill out the FD form, submit documents, and make the payment via cheque or demand draft. After processing, you will receive an FD certificate.
Loan Facility Under LIC FD Scheme
LIC also provides a loan facility against the Fixed Deposit:
- Loan can be availed after 6 months of opening the FD.
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Early withdrawal is allowed after 3 months, but:
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No interest is paid if withdrawn before 6 months.
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Lower interest rates apply if withdrawn prematurely after 6 months.
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Benefits of LIC FD Scheme
1. High Safety & Trust
LIC Housing Finance Limited is a highly trusted financial institution. Your money remains safe, making it ideal for risk-free investment.
2. Attractive Interest Rates
The scheme offers 7.25% to 7.75% annual interest, which is higher than many bank fixed deposits.
3. Extra Interest for Senior Citizens
Senior citizens get an additional 0.25% interest, helping them earn better returns.
4. Flexible Tenure Options
Investors can choose a tenure ranging from 1 year to 5 years, based on their financial goals.
5. Monthly Interest Payout
LIC FD provides monthly interest payments, making it a great option for individuals who need regular monthly income.
6. High Investment Limit
- Minimum deposit: ₹1,00,000
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Maximum deposit: No limit, allowing large investments.
7. Loan Facility Available
Investors can take a loan against the FD after 6 months without breaking the deposit, ensuring liquidity in emergencies.
8. Tax Benefits
A 5-year LIC FD qualifies for tax deduction under Section 80C, helping investors save on income tax.
9. Easy Premature Withdrawal
Early withdrawal is allowed after 3 months (with conditions), providing flexibility during financial need.
10. Simple Investment Process
The process is hassle-free—just visit your nearest LIC HFL branch, submit documents, and start earning.