If you’re looking for a safe and reliable way to grow your savings, the LIC Fixed Deposit Scheme might be a great choice. With a minimum deposit of just ₹10,000, an attractive 6.25% interest rate, and the backing of LIC Housing Finance Limited (LIC HFL), this scheme offers both security and good returns for investors.
In this guide, we will explore how the LIC Fixed Deposit Scheme works, its key benefits, interest rates, and how you can invest in it. Whether you’re a beginner or an experienced investor, this article will help you make an informed decision.
LIC Fixed Deposit Scheme
| Feature | Details |
|---|---|
| Scheme Name | LIC Fixed Deposit Scheme (LIC HFL Sanchay FD) |
| Minimum Investment | ₹10,000 |
| Interest Rate | Up to 6.60% (varies by tenure) |
| Senior Citizen Benefit | Extra 0.25% interest rate |
| Tenure Options | 1 to 5 years |
| Premature Withdrawal | Allowed after 3 months (with penalty) |
| Loan Facility | Up to 75% of FD amount |
| TDS Applicability | Yes, as per income tax laws |
The LIC Fixed Deposit Scheme is a great option for risk-averse investors looking for stable and safe returns. While private banks may offer slightly higher interest rates, LIC HFL’s credibility and strong financial backing make it a preferred choice for many.
What is the LIC Fixed Deposit Scheme?
The LIC Fixed Deposit Scheme, officially known as LIC Housing Finance Sanchay FD, is a safe investment option offered by LIC Housing Finance Limited (LIC HFL). This scheme allows individuals to invest a lump sum amount for a fixed period and earn a stable return through interest payments.
It is best suited for those who seek steady, risk-free income and prefer government-backed financial institutions for investment security.
see also: SBI Special FD How to Earn a Monthly Return of ₹6,333
Interest Rates and Tenure Options
Latest LIC FD Interest Rates (as of 2024)
| Tenure | Interest Rate (General) | Interest Rate (Senior Citizens) |
|---|---|---|
| 1 Year | 5.60% | 5.85% |
| 18 Months | 5.90% | 6.15% |
| 2 Years | 6.25% | 6.50% |
| 3 Years | 6.40% | 6.65% |
| 5 Years | 6.60% | 6.85% |
Note: Senior citizens receive an additional 0.25% interest over the standard rates.
Types of Fixed Deposits in LIC HFL
LIC HFL offers two types of fixed deposits:
1. Cumulative Fixed Deposit
- Interest is compounded annually.
- Paid at maturity along with the principal amount.
- Suitable for those who want to maximize savings over time.
2. Non-Cumulative Fixed Deposit
- Interest is paid monthly or annually.
- Suitable for retirees or individuals looking for regular income.
Features and Benefits
Safe and Secure Investment
Backed by LIC Housing Finance Limited (LIC HFL), this FD scheme offers low-risk investment with guaranteed returns.
Flexible Tenure Options
Investors can choose between 1 year to 5 years, depending on their financial goals.
Higher Interest Rates for Senior Citizens
Senior citizens enjoy an additional 0.25% interest on their deposits.
Loan Facility Against FD
Deposit holders can avail a loan up to 75% of their FD amount if they need emergency funds.
Premature Withdrawal
- Allowed after 3 months.
- Withdrawals between 3 to 6 months earn 3% interest per annum.
- Withdrawals after 6 months earn 1% less than the applicable rate.
Taxation & TDS Rules
- Interest earned is taxable as per individual income tax slabs.
- TDS applies if interest exceeds ₹40,000 per year (₹50,000 for senior citizens).
How to Invest in LIC Fixed Deposit?
Step-by-Step Process to Open an FD
- Visit the LIC HFL branch: Locate the nearest LIC Housing Finance office.
- Fill out the FD Application Form: Available at the branch or online.
- Submit KYC Documents:
- PAN Card
- Aadhaar Card (or any government ID proof)
- Address Proof (utility bill, passport, etc.)
- Two passport-sized photographs
- Deposit the Investment Amount:
- Pay via cheque, NEFT, RTGS, or IMPS.
- Minimum investment: ₹10,000.
- Receive FD Receipt: This confirms your deposit and interest rate.
Comparison with Other Bank Fixed Deposits
| Bank | 3-Year FD Interest Rate |
|---|---|
| HDFC Bank | 7.00% |
| ICICI Bank | 7.00% |
| SBI | 6.75% |
| Bank of Baroda | 7.15% |
| LIC HFL | 6.40% |
While some private banks offer higher interest rates, LIC FD remains a safe choice due to its strong government backing and credibility.
see also: PNB Bank Reduces Fixed Deposit Interest Rates New Rates Explained
LIC Fixed Deposit Scheme FAQs
1. Is LIC FD better than bank FD?
LIC FD offers reliable and safe returns, but some banks provide higher interest rates. It depends on whether you prioritize safety or higher returns.
2. What is the maximum tenure for LIC FD?
The maximum tenure for LIC Fixed Deposits is 5 years.
3. Can I break my LIC FD before maturity?
Yes, but penalties apply. If withdrawn before 6 months, you may receive a reduced interest rate.
4. How is the interest paid?
For Cumulative FDs, interest is paid at maturity. For Non-Cumulative FDs, interest is paid monthly or annually.
5. How can I check my LIC FD status?
You can check your FD details by visiting the nearest LIC HFL branch or calling customer service.
