Life Insurance Corporation of India (LIC) has launched a new fixed deposit-like scheme for senior citizens, offering guaranteed monthly income and higher returns than regular bank FDs. This scheme is designed for people aged 60 years and above, aiming to provide financial security post-retirement.
The scheme allows investment from ₹1 lakh to ₹15 lakh, with monthly payouts ranging from ₹625 to ₹9,375, depending on the invested amount and tenure.
Key Features of LIC Senior Citizen FD Scheme
Guaranteed Monthly Income
The primary attraction of this LIC scheme is the fixed monthly income, which is safe from market fluctuations. The payout depends on the investment amount and tenure chosen by the investor.
Example:
- ₹1 lakh investment – ₹625 per month
- ₹5 lakh investment – ₹3,125 per month
- ₹15 lakh investment – ₹9,375 per month
Higher Interest Rates than Bank FDs
The scheme offers an interest rate of around 7.5% per annum, which is higher than most bank FDs that provide 6-7%. This makes it a better option for senior citizens seeking a reliable income source.
Emergency Loan Facility
Investors can avail a loan against their investment, up to 75% of the invested amount, providing liquidity during emergencies after the lock-in period.
Premature Withdrawal
The scheme allows partial or full withdrawal after 3 months, with some penalty charges. This feature ensures flexibility if funds are needed urgently.
Eligibility and Required Documents
Who Can Apply?
- Indian citizens aged 60 years or above
- Valid KYC documents
Required Documents
- Aadhaar Card
- PAN Card
- Bank account details
- Passport-size photograph
How to Invest in LIC Senior Citizen FD
Step-by-Step Process
- Visit the nearest LIC branch or LIC’s official website.
- Fill the application form for the Senior Citizen FD Scheme.
- Submit the KYC documents.
- Deposit the investment amount.
- Choose the tenure and interest payout option.
- Start receiving monthly income after one month.
LIC FD vs Bank FD
| Feature | LIC FD | Bank FD |
|---|---|---|
| Interest Rate | ~7.5% | 6-7% |
| Monthly Income | Guaranteed | Guaranteed |
| Loan Facility | Available | Available |
| Premature Withdrawal | After 3 months | After 1-6 months |
| Tax Benefits | 5-year Tax Saving FD | 5-year Tax Saving FD |
Why This Scheme is a Game-Changer
This scheme is ideal for middle-class senior citizens who want safe and regular income after retirement. With higher interest rates, guaranteed monthly payouts, and additional facilities like emergency loans, it provides more flexibility and financial security compared to traditional bank FDs.
FAQs
Q1. Is the monthly income tax-free?
A1. No, the monthly income is taxable. However, investment under 5-year Tax Saving FD may qualify for deductions under Section 80C.
Q2. What is the minimum and maximum investment?
A2. Minimum investment is ₹1 lakh, and the maximum can go up to ₹15 lakh.
Q3. How long will I receive monthly income?
A3. Monthly payouts will continue for the duration of the investment tenure (5-10 years).
Q4. Can existing LIC customers invest in this scheme?
A4. Yes, it is available for all senior citizens, regardless of previous LIC policies.
Q5. Can I withdraw money before the tenure ends?
A5. Yes, after 3 months, with some penalty charges.
Conclusion
LIC’s new Senior Citizen FD Scheme is a secure and reliable investment option for retirees looking for steady monthly income and better returns than conventional bank FDs. It combines safety, flexibility, and financial independence, making it an ideal choice for senior citizens to manage post-retirement expenses confidently.