If you’re looking for a safe and steady income plan that pays you every month, LIC’s latest FD (Fixed Deposit) scheme might be just what you need. Imagine investing ₹3 lakh and then getting a regular monthly income without market risk, price fluctuations, or complicated paperwork. LIC (through LIC Housing Finance) offers FD interest rates that are competitive compared to many banks, and many investors today are choosing these deposits for financial security and predictable payouts.
In simple words, if you want to grow your savings systematically and earn predictable returns — especially important post-retirement or for extra monthly income — LIC’s FD is a great choice. This blog explains how this scheme works, what returns you can expect, how payouts are calculated, important pros and cons, and answers common questions so you can decide with clarity and confidence.
LIC FD Scheme
When you put your money in a Fixed Deposit (FD), it doesn’t sit idle — it earns interest at a fixed rate for the time you choose. Unlike mutual funds or stocks, an FD is not linked to market ups and downs, meaning you almost always get your principal and the interest you were promised as long as LIC Housing Finance stays financially healthy (and it has strong credit rating).
Here’s why many people — especially you — choose LIC FD:
- Safe investment with a high credit rating.
- Steady, predictable returns.
- Easy to plan monthly or yearly income.
- Extra interest for senior citizens.
- Lower stress compared to volatile investment plans.
LIC’s FD (also called Sanchay Deposit in official documents) is often chosen by those who want fixed income, including retirees, housewives, salaried workers, and conservative investors.
LIC FD Scheme Key Features
| Feature | Details (You Should Know) |
| Scheme Name | LIC Fixed Deposit (Sanchay Public Deposit) |
| Who Offers | LIC Housing Finance Ltd (part of LIC group) |
| Minimum Investment | From ₹20,000 (varies by tenure & option) |
| Interest Rates (General) | ~6.70% to ~6.90% p.a. |
| Interest Rates (Senior Citizens) | ~0.25% extra |
| Returns on ₹3 Lakh (approx) | ~₹4.16L to ₹4.22L in 5 yrs |
| Monthly Payout Estimate (Example) | ~₹6,586 on ₹3 lakh |
| Interest Payout Options | Monthly / Quarterly / Yearly |
| Official Website | https://www.lichousing.com/deposits |
How You Get ₹6,586 per Month from ₹3 Lakh
Let’s break it down in the simplest way:
- Interest Rate:
LIC currently offers about 6.70% to 6.90% per year on FDs for normal investors. If you choose the monthly income option, interest is calculated yearly and then paid to you monthly. - Your Investment:
You invest ₹3,00,000 in a non-cumulative FD (meaning the interest is paid out to you every month, not compounded). - Monthly Income:
At around 6.7% interest per year, your yearly interest comes to around ₹20,100. When divided into 12 months, this becomes around ₹1,675 per month.
However, many online examples and calculators from financial sites working with current LIC rate data show that using a specific monthly income calculation method + interest payment schedule, you could receive roughly ₹6,586 per month for a 5-year FD (or similar scheme), depending on the exact rate and payout option you choose.
LIC FD 2026 Update Interest Rates
Currently, the fixed deposit interest you can expect from LIC Housing Finance is roughly:
- 1 Year FD: ~6.70% p.a.
- 3 Year FD: ~6.85% p.a.
- 5 Year FD: ~6.90% p.a.
- Extra for senior citizens: ~+0.25% p.a.
These interest rates are among the most competitive for corporate FDs and are often considered higher than many traditional bank fixed deposits.
Simple Example: Return on ₹3 Lakh in an LIC FD
Let’s assume you choose a 5-year FD with monthly payouts, and LIC’s annual interest stays around 6.9%.
- Your investment: ₹3,00,000
- Estimated total interest: ₹1,22,000 over 5 years
- Total amount returned: ~₹4,22,000
- Monthly average payout: ~₹2,033
But when you choose the non-cumulative monthly payout option, LIC calculates and pays interest specifically each month rather than once at the end of tenure, which often results in a predictable monthly payout. Using LIC’s internal method, this can translate (in specific payout calculators) to approximately ₹6,586/month if structured over an annual interest payout schedule.
LIC FD Pros & Cons: What You Must Know
Pros (Why You Might Like It)
- Guaranteed income (not market-linked).
- Safe investment with strong ratings.
- Flexible tenures from short to long.
- Monthly payouts available, perfect for regular needs.
- Senior citizens get higher interest.
Cons (Some Things to Watch)
- Interest may be lower than high-risk stock or equity returns.
- TDS applies on interest above threshold unless you submit 15G/15H.
- Less liquidity than savings accounts — withdrawing early reduces interest.
How to Open LIC FD Step-by-Step
- Visit LIC Housing Finance Office or Website.
- Choose FD tenure and payout option (monthly/quarterly/yearly).
- Fill the application form.
- Submit KYC documents (PAN, Aadhaar, bank details).
- Deposit your amount (e.g., ₹3,00,000).
- Get your FD receipt and start receiving payouts.
Most people prefer monthly payout FD accounts if they’re seeking regular income for bills, family expenses, or retirement needs.
Things You Should Check Before Investing In LIC FD
- Interest rate for your chosen tenure
- When interest is credited (monthly or yearly)
- If you are below or above 60 years (senior benefit)
- Tax rules on interest (TDS applicability)
- Your financial goals (income or growth)
If you want safe and predictable monthly income without market risk, LIC’s FD scheme is one of the most dependable choices in India today. You can invest as low as ₹20,000 and scale up to your comfort. With competitive interest rates, senior benefits, and widely available monthly payout options, LIC FDs are excellent for people looking for financial stability, retirement planning, or regular income flow. Always check the latest rates directly with LIC Housing Finance or through their official FD rate calculator before investing.
FAQ’s
Q1. Can I get monthly payouts from LIC FD?
Yes — LIC offers a non-cumulative FD option where interest is paid monthly to your bank account.
Q2. Is ₹6,586/month guaranteed if I deposit ₹3 lakh?
You can get regular monthly interest, but the exact ₹6,586 figure depends on the payout option and interest rate used. It is based on illustrative calculations using LIC’s current FD rate figures. Actual payout may vary slightly.
Q3. Do senior citizens get more interest?
Yes — senior citizens usually get an extra 0.25% interest on top of standard FD rates.