In 2025, investors who prioritize safety, low risk, and consistent returns are increasingly gravitating toward government-supported and well-established financial institutions. One such widely discussed option is the LIC FD Scheme 2025, which has drawn attention for its security, steady income potential, and long-term dependability. Supported by the Life Insurance Corporation of India (LIC), this scheme attracts conservative investors, retirees, and individuals who value capital preservation over fluctuations in the market.
This article outlines all essential details about the LIC FD Scheme 2025, covering its features, interest advantages, eligibility criteria, taxation rules, and its suitability for your financial objectives.
What is the LIC FD Scheme 2025?
The LIC FD Scheme 2025 is a fixed-return investment avenue offered through LIC-supported financial products, mainly via LIC Housing Finance Fixed Deposits. These deposits operate much like bank fixed deposits but are recognized for providing attractive interest rates along with LIC’s strong reputation and credibility.
The scheme enables investors to lock in their funds for a specific period and receive guaranteed returns, making it a suitable option for those seeking financial certainty without exposure to market risk.
Key Features of LIC FD Scheme 2025
The scheme offers several appealing features that cater to a wide range of investors:
Assured returns with predetermined interest rates
Multiple tenure choices for short-term and long-term planning
Additional interest benefits for senior citizens
Options for quarterly, yearly, or cumulative interest payouts
High level of trust due to LIC backing
Nomination facility available
These benefits make the LIC FD Scheme a reliable option for investors focused on steady income.
LIC FD Scheme 2025 Interest Rates
Interest rates under the LIC FD Scheme differ based on the deposit tenure and investor category. Senior citizens typically enjoy an extra interest advantage.
| Investor Category | Interest Rate (Approx.) |
|---|---|
| General Investors | 7.00% – 7.50% |
| Senior Citizens | 7.50% – 8.00% |
Interest is compounded at regular intervals, and the final return depends on the chosen payout method.
Tenure Options Available
Investors can select from a variety of tenure options according to their financial planning requirements:
Short-term deposits (1 to 2 years)
Medium-term deposits (3 to 5 years)
Long-term deposits (more than 5 years)
This flexibility allows investors to match FD maturity with planned expenses such as education costs, retirement needs, or emergency reserves.
Who Can Invest in LIC FD Scheme 2025?
The scheme is accessible to a broad group of investors, including:
Resident Indian individuals
Senior citizens
Joint account holders
Hindu Undivided Families (HUFs)
Trusts and institutions (as per LIC guidelines)
Both existing LIC policyholders and new investors are eligible to invest.
Minimum and Maximum Investment Amount
Minimum deposit: ₹20,000
Maximum deposit: No upper limit (subject to PAN and KYC requirements)
This flexibility makes the scheme suitable for both modest savers and large-scale investors.
Taxation on LIC FD Scheme
Interest income earned from the LIC FD Scheme is fully taxable under prevailing income tax laws.
Interest is added to total income and taxed according to the applicable slab
TDS applies if annual interest exceeds ₹40,000 (₹50,000 for senior citizens)
Eligible investors can submit Form 15G or 15H to avoid TDS
The scheme does not provide tax benefits under Section 80C
Premature Withdrawal and Loan Facility
Premature withdrawal is permitted, though it may result in a penalty or lower interest, depending on the duration for which the deposit has been maintained. Investors are encouraged to hold the deposit until maturity to maximize returns.
Certain LIC FD variants also offer a loan facility against the deposit, providing liquidity without the need to close the FD.
LIC FD Scheme vs Bank Fixed Deposit
| Feature | LIC FD Scheme | Bank FD |
|---|---|---|
| Safety | Very High | High |
| Interest Rates | Competitive | Moderate |
| Senior Citizen Benefit | Yes | Yes |
| Market Risk | None | None |
| Trust Factor | Extremely Strong | Strong |
LIC fixed deposits are often favored by investors who prioritize long-standing trust and financial stability.
Who Should Consider LIC FD Scheme 2025?
This scheme is well-suited for:
Senior citizens looking for consistent income
Investors with low risk tolerance
Individuals planning for predictable financial milestones
Investors seeking diversification beyond traditional bank FDs
However, those aiming for higher growth or tax-saving investments may consider alternatives such as mutual funds or ELSS options.
Conclusion
The LIC FD Scheme 2025 emerges as a safe and dependable investment choice for individuals who emphasize security and guaranteed returns. With competitive interest rates, adaptable tenures, and LIC’s unparalleled trustworthiness, it serves as a solid option for conservative and income-oriented investors. Although it does not offer tax-saving advantages, the assurance of steady income and peace of mind makes it a worthwhile component of a well-balanced investment portfolio.
FAQs
Q1. Is the LIC FD Scheme 2025 a safe investment option?
Yes, it is regarded as highly secure due to LIC’s government-supported credibility.
Q2. Do senior citizens receive additional benefits under the LIC FD Scheme?
Yes, senior citizens are eligible for higher interest rates than regular investors.
Q3. Is the interest earned from LIC FD taxable?
Yes, the interest income is fully taxable as per current income tax regulations.