LIC Housing Finance’s fixed deposit scheme offers a secure way to grow your money with steady returns, making it a preferred choice for low-risk investors across India.
What Is the LIC Fixed Deposit Scheme
The fixed deposit scheme commonly linked with LIC is actually operated by LIC Housing Finance Limited, a subsidiary of LIC. It is known as the Public Deposit or Sanchay Deposit Scheme. This plan is designed for individuals who want guaranteed returns with the backing of a highly trusted financial institution.
The scheme allows customers to invest their savings for a fixed tenure and earn interest at pre-decided rates. It is suitable for conservative investors seeking stability, predictable income, and safety of capital.
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Main Features of the LIC Housing Finance FD
This deposit scheme includes several useful features for both regular and senior citizen investors.
- Tenure options range from 1 year to 5 years
- Offers cumulative (compounding) and non-cumulative (monthly or yearly payout) plans
- Minimum deposit amount depends on the chosen plan
- No upper limit on maximum investment
- Credit rating for safety has historically been high
- Nomination facility is available
- Easy loan facility against the deposit after six months
Interest Rates for LIC HFL Fixed Deposits
LIC Housing Finance has offered interest rates between 7.25 percent and 7.75 percent in earlier public notices. Senior citizens are typically offered an additional 0.25 percent over the regular rate.
The interest rate depends on the tenure and whether the investor chooses monthly, yearly, or cumulative payout. Rates may vary over time, so checking the latest official updates is important before investing.
Example of Monthly Interest Earnings
If a customer deposits a larger amount, such as 15 lakh rupees, at an annual interest rate close to 7.8 percent in a non-cumulative monthly plan, the payout could be around nine thousand rupees per month. Actual numbers may vary slightly depending on the official rate and compounding method.
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Minimum Deposit and Investment Validity
To invest in LIC Housing Finance’s fixed deposit scheme, you need to deposit a minimum of one lakh rupees. There is no maximum limit, allowing flexible investment based on financial goals.
Tax Benefits and TDS Rules
A common misconception is that these deposits offer tax benefits under Section 80C. LIC Housing Finance fixed deposits do not fall under the tax-saving FD category and therefore do not qualify for Section 80C deduction.
However, if your annual interest income does not exceed forty thousand rupees, you can avoid TDS deductions by submitting Form 15G or Form 15H, depending on eligibility.
Documents Required for the LIC HFL FD
To open this deposit account, you need the following documents:
- A valid identity proof
- Address proof
- PAN card
- Passport-size photograph
- Active bank account details
How to Invest in the LIC FD Scheme
You can visit the nearest LIC Housing Finance branch to apply. The branch will provide the required deposit form, which must be filled in and submitted along with your documents. Payment can be made through cheque or demand draft. After the application is processed, you will receive a fixed deposit certificate as proof of investment.
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Loan Facility on LIC Fixed Deposits
Investors can avail a loan against their fixed deposit after six months of opening the account. This loan can be helpful during emergencies without breaking the deposit prematurely.
Premature Withdrawal Rules
Premature withdrawal is allowed after three months, but the interest paid may be lower than the original rate. If the deposit is withdrawn before six months, no interest is paid. It is advisable to check the updated terms before opting for early withdrawal.
Conclusion
LIC Housing Finance’s fixed deposit scheme remains a dependable investment choice for individuals seeking predictable returns and financial stability. With flexible tenure options, easy documentation, and the trust of the LIC brand, the scheme continues to appeal to investors who prioritize safety over high-risk returns.
