LIC FD Scheme 2025: In today’s fluctuating financial landscape, Fixed Deposits continue to be a cornerstone of stability for Indian investors seeking guaranteed returns with minimal risk. The LIC Housing Finance Fixed Deposit Scheme 2025 stands out as a particularly attractive option for those looking to maximize their savings with security. This comprehensive guide explores everything you need to know about LIC’s FD schemes, from competitive interest rates to tax benefits and special features.
What Is LIC Housing Finance Fixed Deposit?
LIC Housing Finance Limited (LIC HFL), one of India’s premier housing finance companies, offers Fixed Deposit schemes under its popular Sanchay Public Deposit program. Established in 1989 by the Life Insurance Corporation of India, LIC Housing Finance has built a sterling reputation in the financial sector, with its deposits carrying the prestigious AAA (Stable) rating from CRISIL.
With its headquarters in Mumbai, LIC HFL manages an extensive network of 9 regional offices, 24 back offices, and 282 marketing units across India, plus an overseas representative office in Dubai. As of March 2022, the company’s total deposits stood at an impressive ₹18,073.50 crores, demonstrating the immense trust investors place in this institution.
LIC Fixed Deposit Interest Rates 2025
The interest rates offered by LIC Housing Finance are among the most competitive in the market, making it a preferred choice for investors seeking substantial returns. The rates vary based on the investment tenure and whether the investor is a regular citizen or a senior citizen.
Current Interest Rates for Regular Citizens and Senior Citizens
| Tenure | Regular Citizen FD Rate | Senior Citizen FD Rate |
|---|---|---|
| 1 year – 1 year | 7% | 7.25% |
| 1 year 1 day – 1 year 6 months 2 days | 7.1% | 7.35% |
| 1 year 6 months 3 days – 2 years | 7.25% | 7.5% |
| 2 years 1 day – 4 years 11 months 30 days | 7.35% | 7.6% |
Note: All interest rates are as of May 14, 2025, and are subject to change based on market conditions.
Senior citizens enjoy an additional 0.25% interest across all tenure options, representing LIC’s commitment to providing enhanced financial security for older individuals.
Types of LIC Housing Finance FD Schemes
LIC Housing Finance offers three primary deposit schemes to cater to diverse investor needs:
1. Sanchay Deposit
The flagship deposit scheme from LIC Housing Finance offers:
- Tenure options from 1 year to 5 years
- Minimum deposit amount of ₹10,000 for yearly interest option
- Minimum deposit of ₹2,00,000 for monthly interest option
- No upper limit on maximum deposit amount
- Flexible interest payment frequencies (monthly, quarterly, or annually)
- Joint account facility with up to three members
- Loan facility against the fixed deposit
- Auto-renewal and nomination facilities
2. Cumulative Deposit Scheme
Ideal for investors looking for wealth accumulation:
- Investment tenures of 1 Year, 18 Months, 2 Years, 3 Years, and 5 Years
- Annual compounding of interest
- Interest paid at maturity along with the principal amount
- TDS deducted as applicable under section 194A
- Minimum investment amount of ₹20,000 with additional investments in multiples of ₹1,000
3. Non-Cumulative Deposit Scheme
Perfect for investors seeking regular income:
- Monthly or annual interest payment options
- Investment periods identical to the cumulative scheme
- Competitive rates for deposits up to ₹20 Crore and special rates for deposits above ₹20 Crore
- Annual interest payable on March 31st each year
- Monthly interest paid on the 1st day of each month (and on March 31st for the month of March)
- Minimum amount for annual option: ₹20,000 (in multiples of ₹1,000 thereafter)
- Minimum amount for monthly option: ₹2,00,000 (in multiples of ₹10,000 thereafter)
Benefits of Investing in LIC Housing Finance FD
LIC Housing Finance FDs offer numerous advantages that make them stand out in India’s competitive fixed deposit market:
Attractive Returns
With interest rates ranging from 7% to 7.35% for regular citizens and 7.25% to 7.6% for senior citizens, LIC Housing Finance FDs provide substantially higher returns compared to many other financial institutions. This makes them an excellent choice for maximizing passive income.
Safety and Stability
The AAA (Stable) Credit Rating from CRISIL demonstrates the high safety level of these deposits. Additionally, all LIC deposits are insured under the Deposit Insurance Scheme of RBI through DICGC for up to ₹5,00,000, providing an added layer of security.
Flexible Tenure Options
With tenure options ranging from 1 year to 5 years, investors can choose timeframes that align with their financial goals and liquidity requirements.
Senior Citizen Benefits
The additional 0.25% interest rate for senior citizens reflects LIC’s commitment to enhancing financial security for older individuals, making these FDs particularly attractive for retirement planning.
Loan Facility
Investors can avail loans up to 75% of their deposit amount, with interest charged at 2% above the FD interest rate. This provides liquidity without premature withdrawal penalties.
Automated Processes
Interest payments are directly credited to the investor’s bank account through Electronic Clearing Service (ECS), ensuring hassle-free transactions.
Estimated Returns on LIC Housing Finance FDs
To help potential investors understand the growth potential, here’s a breakdown of expected returns for different investment amounts:
Returns for 3-Year Investment at 7.35%
| Investment Amount | Maturity Amount | Wealth Gained |
|---|---|---|
| ₹50,000 | ₹62,293 | ₹12,293 |
| ₹1 lakh | ₹1,24,586 | ₹24,586 |
| ₹2 lakh | ₹2,49,172 | ₹49,172 |
| ₹5 lakh | ₹6,22,931 | ₹1,22,931 |
| ₹10 lakh | ₹12,45,862 | ₹2,45,862 |
Returns for 5-Year Investment at 7.35%
| Investment Amount | Maturity Amount | Wealth Gained |
|---|---|---|
| ₹50,000 | ₹72,125 | ₹22,125 |
| ₹1 lakh | ₹1,44,250 | ₹44,250 |
| ₹2 lakh | ₹2,88,500 | ₹88,500 |
| ₹5 lakh | ₹7,21,251 | ₹2,21,251 |
| ₹10 lakh | ₹14,42,502 | ₹4,42,502 |
Tax Implications on LIC Housing Finance FDs
Understanding the tax implications is crucial for calculating effective returns:
Tax Deduction at Source (TDS)
- TDS at 10% is applicable if the interest income exceeds ₹40,000 per annum (₹50,000 for senior citizens)
- If PAN details are not provided, TDS is deducted at a higher rate of 20%
- TDS certificates are issued for claiming credit while filing income tax returns
Income Tax Liability
- Interest earned on LIC Housing Finance FDs is taxable as per the investor’s income tax slab rates
- For investments in the 5-year FD scheme, tax benefits can be claimed under Section 80C of the Income Tax Act, 1961, up to a maximum of ₹1,50,000 per annum
Eligibility and Documentation Requirements
Who Can Invest?
LIC Housing Finance FDs are available to:
- Individual residents of India
- Minors (through joint accounts with guardians)
- Hindu Undivided Families (HUFs)
- Partnership firms
- Sole proprietorships
- Joint-stock companies
- Clubs, associations, and trusts
- Non-Resident Indians (NRIs), with a maximum tenure of 3 years
Documents Required
To open an LIC Housing Finance FD account, you need to submit:
- Completed FD application form
- Two recent passport-sized photographs
- PAN Card (mandatory)
- Identity proof (Aadhaar Card, Driving License, or Passport)
- Address proof (Utility bills, Aadhaar Card)
- Age proof (for senior citizens claiming higher interest rates)
Premature Withdrawal and Loan Provisions
Premature Withdrawal Conditions
- Fixed deposits are locked in for the first 3 months from the date of receipt as per National Housing Bank guidelines
- For withdrawals between 3 to 6 months, interest is paid at 3% per annum
- For withdrawals after 6 months but before maturity, interest is calculated at 1% less than the applicable rate
- If no specific interest rate is applicable for the given period, interest will be 2% less than the lowest rate at which public deposits are accepted
Loan Against FD
- Available after the FD has completed at least 3 months
- Loan amount of up to 75% of the deposit value
- Interest rate charged at 2% above the FD interest rate
- Loan can be repaid in full or adjusted against the maturity amount
Factors Influencing LIC Housing Finance FD Rates
The interest rates offered by LIC Housing Finance are influenced by various factors:
Economic Conditions
In growing economies, higher demand for credit often leads to more attractive deposit rates to attract investors.
Inflation Trends
Rising inflation typically results in higher interest rates to ensure real returns remain positive for depositors.
RBI Policies
The Reserve Bank of India’s monetary policies and guidelines play a crucial role in determining interest rates across the financial sector.
Market Competition
LIC Housing Finance maintains competitive rates to attract and retain depositors in India’s crowded fixed deposit market.
Comparison with Other Top Banks’ FD Rates
When compared with other major financial institutions, LIC Housing Finance offers notably higher interest rates:
| Bank/Institution | Maximum Regular FD Rate | Maximum Senior Citizen Rate |
|---|---|---|
| LIC Housing Finance | 7.35% | 7.6% |
| HDFC Bank | 6.9% | 7.4% |
| SBI | 6.8% | 7.3% |
| ICICI Bank | 6.9% | 7.4% |
| Shriram Finance | 8.1% | 8.6% |
Note: Rates are as of September 2025 and may vary based on deposit amount and tenure.
How to Invest in LIC Housing Finance FDs
To invest in an LIC Housing Finance FD, follow these steps:
- Visit the nearest LIC Housing Finance branch
- Collect and fill out the LIC Housing FD application form
- Submit the form along with the required documents and deposit amount
- Upon successful processing, you will receive an FD receipt
- Register for online access to track your investments
Alternatively, existing customers can use LIC Housing Finance’s online portal to make investments and manage their accounts.
Conclusion: Is LIC Housing Finance FD Right for You?
LIC Housing Finance Fixed Deposits offer an attractive combination of safety, competitive returns, and flexibility, making them suitable for a wide range of investors. With interest rates significantly higher than many traditional banks and the backing of one of India’s most trusted financial institutions, these FDs represent an excellent option for both capital preservation and growth.
Whether you’re a risk-averse investor looking for stability, a senior citizen seeking enhanced returns, or someone planning for medium-term financial goals, LIC Housing Finance FD schemes in 2025 deserve serious consideration in your investment portfolio.
For personalized advice on how LIC Housing Finance FDs can fit into your overall financial strategy, consider consulting with a certified financial advisor who can help tailor recommendations to your specific needs and objectives.