In India, when investors look for a safe and guaranteed investment option, Fixed Deposits remain one of the most trusted choices. Among various FD options available in the market, the LIC FD Scheme offered by LIC Housing Finance Limited has gained significant popularity due to its stability, competitive interest rates, and strong institutional backing.
This article explains the LIC FD Scheme 2025 in complete detail along with necessary clarifications for the understanding of investors.
Also see: LIC 5 years Double Money plan
What Is LIC FD Scheme 2025?
LIC FD Scheme is a Fixed Deposit / Public Deposit Scheme offered by LIC Housing Finance Limited (LIC HFL), a subsidiary of the Life Insurance Corporation of India. Under this scheme, investors deposit a fixed amount for a selected tenure and receive assured interest returns.
It is important to understand that:
- This is not an LIC insurance policy
- It is a corporate fixed deposit
- Returns are fixed and guaranteed, not market-linked
Who Can Invest in LIC FD Scheme?
As mentioned in the original scheme details, the following investors are eligible:
- Individual investors
- Senior citizens
- Hindu Undivided Families (HUFs)
- Trusts and institutions
- Eligible NRIs (as per applicable rules)
This wide eligibility makes the scheme suitable for both personal and institutional investors.
Minimum & Maximum Investment Amount
According to the scheme details:
- Minimum deposit amount: ₹40,000
- Maximum deposit amount: No upper limit
This allows both small and large investors to participate based on their financial capacity.
Tenure Options Available
LIC Fixed Deposit Scheme offers flexible tenure choices, allowing investors to align investments with financial goals:
- 1 Year
- 15 Months
- 18 Months
- 2 Years
- 3 Years
- 5 Years
This flexibility makes the scheme suitable for both short-term and long-term investors.
LIC FD Interest Rates 2025 (Indicative)
LIC Housing Finance FD interest rates vary depending on the tenure and deposit option.
- Approximate Interest Rates (General Public):
- 1 Year – around 6.70% p.a.
- 15 Months – around 6.75% p.a.
- 18 Months – around 6.75% p.a.
- 2 Years – around 6.80% p.a.
- 3 Years – around 6.85% p.a.
- 5 Years – around 6.90% p.a.
- Senior Citizen Benefit:
- Additional 0.25% interest over the applicable rate
Interest rates may change from time to time. Investors should always verify the latest rates before investing.
Interest Payout Options
Investors can choose how they want to receive interest:
- Cumulative Option
- Interest is compounded
- Paid at maturity
- Suitable for long-term wealth accumulation
- Non-Cumulative Option
- Regular interest payout
- Monthly or annual income option
- Ideal for retirees and income-seeking investors
Safety & Trust Factor
LIC Housing Finance Limited is a well-established and reputed financial institution backed by the LIC brand.
Key safety points:
- Strong financial background
- High credibility in the Indian financial market
- Considered safer than many private corporate FDs
- Suitable for conservative investors
This makes LIC FD Scheme a low-risk investment option.
Loan Facility Against LIC FD
One important feature mentioned is the loan facility against fixed deposit:
- Loan available against the FD
- No need to prematurely break the deposit
- Useful during financial emergencies
This adds liquidity while keeping the investment active.
Taxation Rules on LIC FD
Taxation is an important aspect every investor should understand:
- Interest earned is fully taxable
- Added under Income from Other Sources
- TDS applicable as per rules
- Investors can submit:
- Form 15G (non-senior citizens)
- Form 15H (senior citizens)
LIC FD Scheme does not provide Section 80C tax deduction.
Documents Required for Investment
To invest in LIC FD Scheme, the following documents are generally required:
- Identity proof (Aadhaar / PAN)
- Address proof
- Passport-size photograph
- Bank details
- Form 15G / 15H (if applicable)
These requirements ensure compliance and smooth processing.
Premature Withdrawal Rules
- Premature withdrawal is allowed
- Interest rate may be reduced
- Penalty may apply
- Suitable only in unavoidable situations
Investors should ideally stay invested till maturity to get maximum benefit.
Advantages of LIC FD Scheme
- Guaranteed and fixed returns
- Higher interest compared to many bank FDs
- Extra interest for senior citizens
- Trusted LIC brand backing
- Multiple tenure options
- Regular income facility
- Loan against deposit available
- Simple documentation process
Disadvantages of LIC FD Scheme
- Interest income is taxable
- No tax saving under 80C
- Returns may not beat inflation in long term
- Lock-in reduces liquidity
- Market-linked instruments may offer higher returns
Who Should Invest in LIC FD Scheme?
LIC Fixed Deposit Scheme is ideal for:
- Senior citizens looking for regular income
- Conservative investors
- People nearing retirement
- Investors who prefer capital safety
- Individuals avoiding market volatility
- NRIs seeking stable INR investments
Example Calculation
If an investor deposits ₹1,00,000 for 1 year at 6.70% interest:
- Annual interest earned: ₹6,700
- Total maturity amount: ₹1,06,700
Senior citizens may earn slightly more due to the additional interest benefit.
Conclusion
The LIC FD Scheme 2025 by LIC Housing Finance Limited is a safe, reliable, and high-trust fixed deposit option for investors who prioritize capital safety and steady income. With interest rates ranging between 6.70% to 6.95%, additional benefits for senior citizens, and the credibility of the LIC brand, this scheme stands out among corporate FDs.
While it does not offer tax savings or market-linked growth, its stability, transparency, and guaranteed returns make it an excellent choice for conservative and income-focused investors.
Disclaimer: This article is published for general information and educational purposes only. The details shared here are based on publicly available information related to the LIC Housing Finance Fixed Deposit Scheme. Interest rates, terms, and features may change from time to time as per the company’s policies. This content should not be considered as financial, legal, or investment advice. Readers are advised to verify all details from official sources or consult a qualified financial advisor before making any investment decision. The website and author shall not be responsible for any financial loss arising from the use of this information.