If you’re looking for a safe investment option that provides a guaranteed monthly income, the LIC Fixed Deposit Monthly Income Plan 2025 could be just what you need. Backed by LIC Housing Finance Ltd. (LIC HFL), a trusted name in Indian finance, this FD plan offers stability, regular returns, and peace of mind—especially suited for retirees, conservative investors, and anyone seeking fixed monthly earnings without market risk.
In this detailed article, we’ll explore how the plan works, who it’s ideal for, current interest rates, benefits, eligibility, and how you can get started. Whether you’re planning for your retirement or just want a second source of income, this LIC FD plan might tick all the right boxes.
LIC Fixed Deposit Monthly Income Plan 2025
| Feature | Details |
|---|---|
| Offered By | LIC Housing Finance Ltd. (LIC HFL) |
| Type | Monthly Income Fixed Deposit Scheme |
| Interest Rates (General) | 5.45% – 6.45% per annum |
| Interest Rates (Senior Citizens) | Additional 0.25% p.a. over regular rates |
| Minimum Investment (Monthly Payout) | ₹2 lakh |
| Tenure Options | 1 year, 1.5 years, 2 years, 3 years, 5 years |
| Payout Frequency | Monthly (1st of every month) |
| Tax Benefits | Eligible under Section 80C for 5-year tax-saving FDs |
| Official Website | lichousing.com |
The LIC Fixed Deposit Monthly Income Plan 2025 is a dependable and straightforward option for anyone seeking guaranteed monthly income with minimal risk. It combines LIC’s credibility, decent interest rates, and flexible features—making it ideal for those who want stable, predictable returns. Whether you’re retired, planning for future expenses, or just need regular supplementary income, this LIC FD plan is worth considering.
What Is LIC FD Monthly Income Plan 2025?
The LIC FD Monthly Income Plan is a non-cumulative fixed deposit that pays you interest every month, making it an excellent choice if you’re looking to create passive income. Instead of reinvesting the interest, this plan ensures regular monthly payouts, ideal for senior citizens, homemakers, or early retirees who want consistent cash flow.
LIC Housing Finance, a subsidiary of Life Insurance Corporation of India (LIC), manages this plan under strict RBI and NHB guidelines, which means your money is in safe hands.
see also: Post Office New Scheme 2025: Big Profit in Less Investment
Current Interest Rates (Effective 2025)
Interest rates vary depending on the tenure of the deposit and the investor’s age. Here’s a quick breakdown:
General Public
Time Deposit Scheme: On Investment of ₹5 Lakhs, You Will Get Interest of Only ₹2.24 Lakhs – See Full Details
| Tenure | Interest Rate (p.a.) |
|---|---|
| 1 Year | 5.45% |
| 18 Months | 5.75% |
| 2 Years | 6.10% |
| 3 Years | 6.25% |
| 5 Years | 6.45% |
Senior Citizens (60+ Years)
- Add 0.25% extra to the above rates.
- So, for a 5-year plan, the rate becomes 6.70% p.a.
These rates are fixed at the time of investment and remain unchanged through the tenure, shielding you from market volatility.
How Much Do You Need to Invest for Monthly Income?
Let’s say you want to earn ₹14,000 per month from this FD. Based on the 5-year tenure for general citizens at 6.45%:
- Annual Interest = ₹14,000 x 12 = ₹1,68,000
- Required Investment = ₹1,68,000 / 6.45% = ~₹26.04 lakh
For senior citizens with 6.70% interest:
- Required Investment = ₹1,68,000 / 6.70% = ~₹25.07 lakh
These are rough estimates. The final amount may vary based on exact interest calculation methods and tax deductions (like TDS).
Who Should Consider This LIC FD Plan?
This monthly income FD plan is best for:
- Senior citizens seeking safe, regular income after retirement.
- Homemakers who want stable passive income from family savings.
- Risk-averse investors who prefer fixed returns over stock market risks.
- Parents saving for children’s monthly educational expenses.
- NRIs looking for a stable rupee income (as per RBI eligibility norms).
Features & Benefits of LIC FD Monthly Income Plan
1. Guaranteed Monthly Payouts
Interest is credited to your bank account on the 1st of every month, helping you plan monthly budgets confidently.
2. Senior Citizen Advantage
People above 60 years get an additional 0.25% p.a., giving them higher monthly earnings.
3. Flexible Tenure Options
Choose from 1 to 5 years, depending on your financial planning horizon.
4. Loan Facility
You can borrow up to 75% of your FD value if an emergency arises, making it a flexible investment.
5. Premature Withdrawal
Available after 3 months, but with a minor penalty:
- 3 to 6 months: No interest paid.
- After 6 months: 1% lower than applicable rate.
6. Nomination & Auto-Renewal
You can nominate someone, and the plan can auto-renew on maturity if not withdrawn—ensuring peace of mind.
How to Open LIC Monthly Income FD Account in 2025
Here’s a step-by-step guide:
Step 1: Visit the Official Website
Go to LIC Housing Finance’s official site or visit a nearby branch.
Step 2: Choose Your Plan
Select Monthly Interest Scheme, tenure (1–5 years), and input your deposit amount.
Step 3: Complete KYC
Provide basic documents like:
- PAN Card
- Aadhaar Card
- Address Proof
- Passport-sized photo
Step 4: Deposit the Money
Use NEFT, RTGS, IMPS, or cheque to make the investment.
Step 5: Start Receiving Monthly Income
Interest will be credited to your linked bank account from the next scheduled payout date.
FD Rates: Big Opportunity for Senior Citizens, These Banks Are Offering the Highest Interest
Tax Implications on LIC Fixed Deposit
- TDS Deduction: If your total FD interest exceeds ₹40,000/year (₹50,000 for senior citizens), TDS @10% applies.
- Submit Form 15G or 15H to avoid TDS if your income is below the taxable limit.
- Section 80C Benefit: 5-year LIC tax-saving FDs offer deduction up to ₹1.5 lakh per annum.
see also: PPF Calculation for ₹3,000, ₹6,000, and ₹9,000 Monthly Investment
Comparison with Bank Monthly Income Schemes
| Feature | LIC FD Plan | Bank FD (Monthly Payout) |
|---|---|---|
| Interest Rate (5 Years) | Up to 6.70% | Typically 6.00% – 6.50% |
| Safety | High (LIC brand) | Varies by bank rating |
| Loan Against FD | Yes (up to 75%) | Yes |
| Senior Citizen Bonus | Yes (0.25%) | Yes (0.25–0.50%) |
| Premature Exit | After 3 months | After 7 days to 1 month |
LIC’s plan offers competitive returns, especially for large deposits (₹2 lakh+), with the added trust of agovernment-backed institution.
LIC Fixed Deposit Monthly Income Plan 2025 FAQs
Q1. What is the minimum amount required for LIC Monthly FD?
A: ₹2 lakh is the minimum for monthly payout plans.
Q2. Can NRIs invest in LIC FD schemes?
A: As of 2025, NRIs are not eligible for LIC Housing FDs. Please verify with the nearest LIC HFL branch.
Q3. Is the interest earned taxable?
A: Yes. Interest income is added to your taxable income and subject to TDS if it crosses the ₹40,000/₹50,000 threshold.
Q4. Is the principal amount safe?
A: Absolutely. LIC Housing Finance Ltd. is rated AAA (highest safety) by CRISIL and CARE.
Q5. Can I break my FD before maturity?
A: Yes, after 3 months. However, you may get reduced interest or no interest depending on how early you break it.
