LIC New FD Scheme – In a major financial relief for retirees, the Life Insurance Corporation of India (LIC) has introduced a new Fixed Deposit (FD)-style savings scheme exclusively for senior citizens. This scheme ensures a fixed monthly income for eligible individuals aged 60 and above, giving them a stable and secure post-retirement option. However, not everyone qualifies, LIC has introduced strict eligibility criteria for who can apply. Let’s explore the features, eligibility, interest benefits, and application process of the LIC New FD Scheme in detail.
What is LIC’s New FD Scheme?
LIC’s latest FD-style scheme is designed to offer monthly interest payouts to senior citizens who invest a lump sum amount. Unlike traditional bank FDs, this scheme guarantees monthly income, much like a pension, with fixed returns throughout the tenure. This scheme is particularly aimed at helping those retirees who do not have access to government or employer pensions. It provides them with a sense of financial independence and predictability in managing their monthly expenses. Since it is backed by LIC, a government-owned and trusted financial institution, senior citizens can invest without worrying about the safety of their funds.
Key Features:
- Exclusively for individuals aged 60 and above
- Fixed monthly interest payout for financial stability
- Lump sum investment with flexible tenure options
- Government-backed and regulated by LIC
Who is Eligible for the LIC FD Scheme?
The LIC FD Scheme is exclusively available to senior citizens who meet specific eligibility criteria set by LIC. To qualify, the applicant must be at least 60 years of age and a resident Indian. The scheme is tailored to support elderly individuals who are looking for a safe investment option that provides a steady monthly income. Applicants must also possess valid identity documents such as Aadhaar and PAN cards, and they need to invest a minimum of ₹1 lakh to get started. Joint applications are not permitted, ensuring that the benefits are focused on individual senior investors.
Eligibility Criteria:
- Applicant must be 60 years or older
- Must be a resident Indian
- PAN card and Aadhaar card required
- Minimum investment amount: ₹1 lakh
- Maximum investment cap: ₹15 lakh
- Only individual accounts allowed (no joint holders)
Monthly Interest Payout Structure
The main attraction of the scheme is its monthly payout. Depending on the investment and tenure chosen, LIC guarantees fixed returns deposited monthly into the account holder’s bank account.
Monthly Interest for Various Deposit Amounts (Assuming 7.4% Annual Interest Rate)
| Investment Amount | Tenure (Years) | Annual Interest (%) | Monthly Payout | Total Interest Earned |
|---|---|---|---|---|
| ₹1,00,000 | 5 | 7.4% | ₹616 | ₹36,960 |
| ₹5,00,000 | 5 | 7.4% | ₹3,083 | ₹1,84,980 |
| ₹7,50,000 | 5 | 7.4% | ₹4,625 | ₹2,77,440 |
| ₹10,00,000 | 5 | 7.4% | ₹6,167 | ₹3,69,900 |
| ₹12,00,000 | 5 | 7.4% | ₹7,400 | ₹4,43,880 |
| ₹13,50,000 | 5 | 7.4% | ₹8,333 | ₹5,00,000 |
| ₹15,00,000 | 5 | 7.4% | ₹9,250 | ₹5,54,940 |
*Note: Monthly interest is calculated on a simple interest basis and paid out on a fixed date every month.
How to Apply for the LIC FD Scheme?
LIC has kept the application process user-friendly and senior-citizen focused. Interested applicants can follow the steps below:
Step-by-Step Application Process:
- Visit your nearest LIC branch with required documents
- Fill out the ‘Senior Citizen Fixed Deposit Scheme’ application form
- Submit identity proof (Aadhaar, PAN)
- Provide a cancelled cheque for bank account verification
- Deposit the chosen investment amount via cheque, DD or NEFT
- Collect acknowledgment and wait for scheme activation confirmation
Alternatively, online application may be possible through LIC’s official website for select urban regions.
Benefits of the LIC Monthly Income FD Scheme
This scheme offers several advantages over traditional fixed deposits and pension plans.
Key Benefits:
- Guaranteed monthly income without market risk
- Backed by LIC – one of India’s most trusted financial institutions
- Ideal for senior citizens with no pension
- Simple documentation and hassle-free returns
- Option to nominate a beneficiary
Things to Keep in Mind Before Investing
Before locking your funds, it’s important to understand a few conditions and clauses.
Caution Points:
- Premature withdrawal attracts penalty
- Interest rate is fixed at time of investment and won’t change
- No additional deposits allowed after account initiation
- Not eligible for tax deduction under Section 80C
Comparison with Regular Bank FDs for Senior Citizens
| Feature | LIC FD Scheme | Bank FD (Senior Citizen) |
|---|---|---|
| Monthly Payout | Yes | Optional |
| Interest Rate | Fixed (7.4% approx.) | Varies (6.5%–7.25%) |
| Tenure | 3–5 Years | 1–10 Years |
| Withdrawal Penalty | Yes | Yes |
| Nomination Facility | Yes | Yes |
| Tax Benefit under 80C | No | Depends on bank/product |
| Trust Factor | High (LIC backed) | Medium to High |
Why This Scheme is Ideal for Pension-less Retirees
Many senior citizens, especially those from the unorganised sector or self-employed backgrounds, do not receive a regular pension. This LIC FD Scheme offers a steady monthly income without requiring market involvement, making it a perfect post-retirement plan. It not only ensures income stability but also peace of mind with minimal paperwork and assured returns.
The LIC FD Scheme for senior citizens brings timely relief for retirees seeking financial stability without risking their savings. While the fixed monthly income offers peace of mind, limited eligibility and lack of tax benefits may not suit all. Still, for those looking for a pension-like monthly payout from a trusted financial body, this plan is worth considering. Act quickly, as this scheme may have limited slots or application windows based on availability.
FAQs
1. Can NRIs apply for the LIC FD Scheme?
No, this scheme is only available for resident Indian senior citizens.
2. What happens to the investment after maturity?
The invested amount is returned to the account holder or nominee, and interest payouts stop unless reinvested.
3. Is the monthly income taxable?
Yes, the monthly interest is taxable as per the investor’s income tax slab.
4. Can I change my bank account details later?
Yes, changes can be made by submitting a written request at the LIC branch with valid proof.
5. Is premature withdrawal allowed?
Yes, but it comes with a penalty. You may not receive full interest benefits if withdrawn early.