If you’re looking for a secure and stable income, India’s largest insurance company, Life Insurance Corporation of India (LIC), has a great plan for you. Investing in this new fixed deposit (FD) scheme, introduced by LIC Housing Finance, a subsidiary of LIC, will result in a fixed interest rate directly credited to your bank account every month. This means that if you invest ₹1 lakh, you can earn up to ₹6,500 per month. Senior citizens receive additional benefits from this scheme.
How much interest is being earned, and who will benefit the most
LIC Housing Finance Limited’s FD scheme currently offers an annual interest rate of up to 6.45%. Senior citizens also receive an additional interest benefit of 0.25%. In certain schemes, this rate can even exceed 7%. This stable and attractive interest rate is a strong option for those who want to avoid market fluctuations.
Investment Limit and Tenure Options
You can deposit a minimum of ₹1 lakh and a maximum of ₹15 lakh in this new FD scheme from LIC. You also have the option to invest in this scheme for a period ranging from 1 year to 5 years or more. You can choose the tenure as per your financial needs.
Tax Benefits and TDS Claim Rules
You can get a tax exemption on a 5-year FD under Section 80C of the Income Tax Act. Additionally, if your total interest income exceeds ₹40,000 (₹50,000 for senior citizens), you can also claim a TDS deduction by submitting Form 15G/H. This tax benefit makes this investment even more beneficial.
List of Required Documents
You will need the following important documents when applying for this scheme. This includes proof of identity, proof of address, and income details:
Aadhaar Card
PAN Card
Passport-size photo
Bank account details
Bank statements for the last three months
Income certificate
Residence proof
Loan and Partial Withdrawal Facility
This plan also offers premature withdrawals and loan facilities. You can make partial withdrawals after 6 months. In case of an emergency, you can also take a loan up to a certain percentage of your FD (as applicable in the plan). This facility provides liquidity to the investment.
Which is better
Both LIC FDs and bank FDs have their own advantages and disadvantages. If you want to avoid market risk and receive regular income, an LIC FD plan can be an excellent option, as it often offers a slightly higher interest rate than bank FDs, especially through housing finance companies. However, if you’re simply looking for the highest interest rate, you’ll need to compare FD rates from different banks. LIC FDs are a great solution for stability, security, and monthly income.