LIC FD Interest Rates – Latest Rates & Guide

7.60

*T&C Apply

LIC FD Interest Rates are currently higher than those offered by most traditional banks, especially in the 2–5 year range.

For conservative investors seeking higher returns than public sector banks, LIC FDs may be a smart option.

Eligibility Criteria & Required Documents for LIC Bank FD Interest Rates

It’s important to check whether you qualify to invest in an LIC FD and what documents are needed.

Eligibility Criteria:

Here are the eligibility criteria:

• Indian residents (aged 18+)
   
• Hindu Undivided Families (HUFs)
   
• Senior citizens (aged 60 or more)
   
• Companies and trusts (as per scheme terms)
   
• NRIs (only under NRO deposits in select cases)

Make sure you are eligible for LIC FD before investing your time and money.

Required Documents:

Get all your documents handy for fast process: 
 

Submitting the correct documents ensures smooth processing of the FD account without delays.

Tax Implications on LIC Bank FD

Understanding the tax on interest earned from LIC FDs helps you calculate your post-tax returns better.

• LIC deducts 10% TDS if total interest earned exceeds ₹40,000 in a year (₹50,000 for senior citizens).
   
• If PAN is not provided, TDS will be charged at 20%.
   
• Interest earned must be declared in your income tax return and taxed as per your income slab.
   
• If your total income is below the taxable limit, you can submit Form 15G or 15H to avoid TDS.
   
• LIC FD Interest Rates are not tax-free; they are fully taxable as “Income from Other Sources”.

For example, if Rahul earns ₹60,000 interest in a year and doesn't submit Form 15G, ₹6,000 will be deducted as TDS.

Learn More - How to Calculate Fixed Deposit Interest 

LIC Bank FD Premature Withdrawal & Closure Rules

While LIC FDs are meant for long-term savings, there may be cases where you need to withdraw early.

• Premature withdrawal is allowed after 3 months from the date of deposit.
   
• If withdrawn before 6 months, no interest is paid.
   
• If withdrawn after 6 months but before maturity, 1% is deducted from the applicable interest rate.
   
• No penalty is charged on maturity or closure after full term.
   
• Partial withdrawal is not allowed; only full closure is permitted.

For example, Meena deposited ₹3,00,000 for 3 years at 7.75%. She withdrew it after 1 year. She received interest at 6.75% instead of 7.75%, due to a 1% penalty. Understanding these rules helps you plan your liquidity without losing much of your earnings.

How to Invest in LIC Bank FD?

Investing in LIC FD is simple and can be done both online and offline. You just need to follow a few basic steps.

• Visit the nearest LIC Housing Finance branch or an authorised collection centre.
   
• Collect and fill the fixed deposit application form.
   
• Choose between cumulative or non-cumulative FD based on your interest payout preference.
   
• Submit KYC documents including PAN, Aadhaar, and address proof.
   
• Pay the deposit amount via cheque, NEFT/RTGS, or demand draft.
   
• Collect your fixed deposit receipt or certificate for your records.

Investing in LIC FD is a safe option for those who want stable returns with minimal paperwork.

Conclusion

LIC FD Interest Rates offer a combination of security, steady income, and relatively high returns. Whether you’re a young professional saving for a future goal or a senior citizen planning monthly expenses, LIC’s fixed deposits provide a reliable way to earn. 

With flexible terms, easy process, and competitive interest, LIC FD is a preferred option for Indian investors who want to grow their money safely.

To make the most of these schemes, compare rates, plan tenure wisely, and always check for updated offers or limited-time promotions by LIC Housing Finance.

FAQs

Can I invest in LIC FD online through net banking?
Currently, LIC FDs must be opened via physical forms through LIC Housing Finance branches or authorised centres.

What happens if I forget to renew my LIC FD on time?
LIC generally auto-renews the FD for the same tenure at prevailing interest rates unless you instruct otherwise.

Does the LIC FD interest rate differ for online and offline bookings?
No, LIC FD interest rates remain the same whether you invest online or offline.

Can I take a loan against my LIC FD without breaking it?
Yes, LIC FD allows loans up to 90% of the deposit amount without needing to break the FD.

Is the LIC FD available for NRIs under the same terms?
No, LIC FDs are not available for NRIs; they are only offered to resident Indian individuals and HUFs.

How is TDS applied on interest earned from LIC FD?
TDS is deducted if the annual interest on LIC FD exceeds ₹40,000 (₹50,000 for senior citizens), as per Income Tax rules.

Does LIC FD offer auto-renewal or partial withdrawal options?
LIC FD allows auto-renewal on maturity but does not permit partial withdrawal before the lock-in period ends.