LIC Fixed Deposit Plan – In a major relief for retirees and elderly citizens, the Life Insurance Corporation of India (LIC) has launched a new fixed deposit (FD)-like investment option tailored for senior citizens. This scheme is designed to provide guaranteed monthly income with high interest rates, ensuring financial stability during post-retirement years. With the rising cost of living, many seniors are now exploring LIC’s safe, government-backed investment options to secure their future without the risk of market volatility.
What is the LIC Fixed Deposit Plan for Senior Citizens?
LIC offers a secure and stable scheme that works similar to a fixed deposit, providing regular monthly interest payouts to investors. This plan is ideal for retirees looking for a consistent income stream without risking their savings. The interest rates are attractive, and the plan is designed to deliver long-term benefits with a one-time investment.
Key Features:
- Guaranteed monthly income from interest
- Government-backed and regulated by LIC
- Higher interest rates than most bank FDs for seniors
- Tenure flexibility ranging from 5 to 20 years
- One-time investment with predictable returns
Who Can Invest in LIC’s Monthly Interest Plan?
The plan is targeted primarily at senior citizens, although others can also invest based on the eligibility criteria.
Eligibility Criteria:
- Age: 60 years and above (some variants may allow 55+ with special terms)
- Indian residents only
- One-time lump sum investment required
- PAN and Aadhaar mandatory for registration
- Nomination facility available
Investment Amount and Monthly Returns
Depending on how much a senior citizen invests, the monthly payout varies. Here’s a look at the potential returns based on investment slabs:
Investment Amount vs Monthly Income
| Investment Amount (₹) | Estimated Monthly Interest (₹) | Annual Interest (₹) | Effective Interest Rate |
|---|---|---|---|
| ₹1,00,000 | ₹700 | ₹8,400 | 8.40% |
| ₹5,00,000 | ₹3,500 | ₹42,000 | 8.40% |
| ₹10,00,000 | ₹7,000 | ₹84,000 | 8.40% |
| ₹15,00,000 | ₹10,500 | ₹1,26,000 | 8.40% |
| ₹20,00,000 | ₹14,000 | ₹1,68,000 | 8.40% |
| ₹25,00,000 | ₹17,500 | ₹2,10,000 | 8.40% |
| ₹30,00,000 | ₹21,000 | ₹2,52,000 | 8.40% |
*Note: These figures are indicative and may vary slightly based on plan type and tenure selected.
Benefits of LIC’s Fixed Deposit Plan for Seniors
This investment option offers more than just income—it brings peace of mind and security in uncertain times.
Major Benefits:
- Assured Monthly Income: No dependence on family or external help
- Safe Investment: LIC is a government-backed entity with high trust value
- Tax Benefits: Under certain plans, you can get tax exemption under Section 80C
- Loan Facility: Investors can get loans against the deposit amount in emergencies
- Maturity Payout: Lump sum at the end of policy term in addition to monthly income
Comparison: LIC FD Plan vs Regular Bank FD
Many senior citizens often compare LIC’s scheme with traditional bank fixed deposits. Here’s how they differ:
LIC Monthly Income Plan vs Bank FD
| Feature | LIC Plan for Seniors | Bank Fixed Deposit |
|---|---|---|
| Monthly Payout Option | Yes | Limited banks offer |
| Interest Rate | ~8.40% | ~7.00% (varies by bank) |
| Risk | Very Low (Govt-backed) | Low |
| Insurance Cover | Included under LIC schemes | Not included |
| Loan Against Deposit | Available | Available |
| Tenure | Up to 20 years | Up to 10 years |
| Tax Benefits | Yes (under select plans) | Limited |
How to Apply for LIC’s Monthly Interest Plan?
Investing in this plan is a simple process and can be done both online and offline through LIC agents or official offices.
Steps to Apply:
- Visit your nearest LIC branch or authorized agent
- Submit KYC documents (PAN, Aadhaar, passport-sized photo)
- Choose your investment amount and plan duration
- Fill the application form and make the payment
- Receive confirmation and start earning monthly income
Important Things to Remember
Before investing, seniors should understand the lock-in period, pre-mature withdrawal rules, and taxability of returns.
Key Considerations:
- Interest earned is taxable as per income tax slab
- Pre-mature exit may attract minor penalties
- Nomination is important for estate transfer
- Ensure your PAN and Aadhaar are updated with LIC
The LIC fixed deposit-like plan for senior citizens is an excellent retirement solution for those seeking guaranteed, risk-free monthly income. With interest rates higher than most bank FDs and the backing of a trusted public sector institution, it combines safety, income stability, and long-term financial confidence. For seniors looking to preserve their capital while earning steady returns, this plan could be a top choice in 2025.
