LIC New Fixed Deposit Scheme – The Life Insurance Corporation of India (LIC) has introduced a new fixed deposit scheme exclusively for senior citizens, offering guaranteed monthly interest payouts and attractive returns. With limited eligibility and a focus on financial security in retirement, this scheme has become a popular talking point among retirees and financial planners alike. In this article, we explore all the key aspects of the LIC senior citizen FD scheme, including interest rates, tenure, eligibility, application process, and benefits. If you or a family member is above 60, this is a must-read financial opportunity.
What is LIC’s New Senior Citizen Fixed Deposit Scheme?
LIC’s new fixed deposit scheme is specially designed to provide elderly citizens with a safe investment option that delivers predictable monthly income. This initiative aims to secure the financial independence of retirees while offering competitive returns.
Key Features of the Scheme:
- Available only for senior citizens aged 60 years and above.
- Monthly interest payout ensures regular income.
- Tenure options range from 1 year to 5 years.
- Assured return with LIC’s trusted backing.
- Higher interest rates than regular fixed deposits.
- Safe, government-backed investment with no market risk.
- Limited availability – early application is recommended.
Interest Rates and Return Breakdown
The interest rates under LIC’s new senior citizen FD scheme are structured to offer better returns compared to traditional bank deposits. Here’s a detailed look at the rates and potential monthly income:
| Investment Amount | Tenure | Interest Rate | Monthly Payout | Maturity Amount |
|---|---|---|---|---|
| ₹1,00,000 | 1 Year | 7.25% | ₹604 | ₹1,07,250 |
| ₹1,00,000 | 2 Years | 7.40% | ₹616 | ₹1,14,800 |
| ₹1,00,000 | 3 Years | 7.55% | ₹629 | ₹1,22,650 |
| ₹1,00,000 | 4 Years | 7.65% | ₹637 | ₹1,30,600 |
| ₹1,00,000 | 5 Years | 7.75% | ₹645 | ₹1,38,750 |
| ₹5,00,000 | 5 Years | 7.75% | ₹3,225 | ₹6,93,750 |
| ₹10,00,000 | 5 Years | 7.75% | ₹6,450 | ₹13,87,500 |
Who Can Apply for This LIC FD Scheme?
The LIC fixed deposit scheme is not open to all. It comes with specific eligibility criteria to ensure the benefits are extended only to the intended beneficiaries – senior citizens.
Eligibility Criteria:
- Must be an Indian citizen.
- Minimum age: 60 years (at the time of application).
- LIC policyholder status preferred, but not mandatory.
- PAN card and Aadhaar card required.
- Bank account for monthly interest payout.
This limited-eligibility approach helps prioritize those most in need of financial security in retirement.
Application Process – How to Invest
Applying for LIC’s senior citizen FD scheme is straightforward. Interested individuals can follow the steps below to enroll:
Step-by-Step Application Guide:
- Visit the nearest LIC branch with identity and age proof.
- Fill out the LIC Fixed Deposit Scheme form.
- Submit KYC documents (Aadhaar, PAN, Address Proof).
- Choose your deposit amount and tenure.
- Select “Monthly Interest Payout” as the payment mode.
- Complete the deposit via cheque, draft, or direct account transfer.
Alternatively, digital applications may soon be available through LIC’s official portal.
Why Are Senior Citizens Choosing LIC Over Banks?
This scheme offers compelling advantages compared to regular bank fixed deposits and other financial products for retirees.
Benefits Over Regular Bank FDs:
- Higher interest rates than most public/private banks.
- Trusted brand with government support.
- Fixed income through monthly interest payout.
- Option to renew deposits with better terms on maturity.
- No risk of capital erosion or market fluctuation impact.
Things to Consider Before Investing
While the scheme is attractive, investors should be mindful of certain factors before locking in their funds.
Points to Keep in Mind:
- Premature withdrawal is allowed but with penalties.
- Interest income may be taxable if it exceeds ₹50,000 annually.
- Monthly payout helps in liquidity but reduces compounding benefits.
- Interest rates may change for new deposits based on market trends.
LIC FD Scheme vs Senior Citizen Saving Scheme (SCSS)
It’s important to compare LIC’s scheme with other popular senior schemes like SCSS to make informed decisions.
| Feature | LIC FD Scheme | SCSS (Post Office/Bank) |
|---|---|---|
| Minimum Age | 60 Years | 60 Years |
| Interest Rate (approx) | Up to 7.75% | 8.2% (as of Q1 2025) |
| Tenure | 1 to 5 Years | 5 Years (extendable) |
| Monthly Payout Option | Yes | Quarterly |
| Premature Withdrawal Penalty | Yes | Yes |
| Tax Benefits (80C) | No | Yes |
| Maximum Investment Limit | No limit | ₹30 Lakhs |
LIC’s fixed deposit scheme for senior citizens is a promising option for retirees looking for a safe, steady income. While it may not offer the highest returns when compared with some government-backed alternatives, the LIC brand trust and monthly payout structure make it a dependable choice. Before investing, individuals should assess their financial needs and consult a financial advisor if needed.
FAQs
1. What is the minimum deposit required for this LIC FD scheme?
₹1,00,000
2. Is this scheme only for LIC policyholders?
No
3. Can interest be credited monthly?
Yes
4. Is premature withdrawal allowed?
Yes
5. Is there any tax exemption under this scheme?
No