Are you looking for a safe, reliable, and guaranteed income investment in 2025? Look no further than LIC’s Fixed Deposit (FD) Monthly Income Plan. This plan offers a fixed monthly payout of ₹6,500 for an investment of ₹1 lakh, providing investors with the peace of mind they need in uncertain times.
Whether you’re a retiree seeking monthly income, a conservative investor, or someone just getting started with investing, this FD plan could be the perfect choice for your portfolio.
Table of Contents
LIC’s Best FD Plan 2025
| Feature | Details |
|---|---|
| Investment Amount | Starts from ₹1 lakh, but ₹2 lakh is required for monthly payouts. |
| Interest Rate | 6.5% per annum (as of 2025), offering attractive returns for conservative investors. |
| Monthly Payout | Guaranteed ₹6,500 per month for a ₹1 lakh investment. |
| Tenure Options | 1 to 5 years, with flexibility to choose based on your financial goals and liquidity needs. |
| Interest Payment Frequency | Monthly, quarterly, or annually—you can select the payment schedule that best fits your needs. |
| Loan Against FD | Available up to 75% of the deposit amount, a great feature in case of emergencies. |
| Taxation | Interest income is subject to TDS; tax laws may apply based on your total income. |
| Premature Withdrawal | Allowed with penalties; terms and conditions apply. |
| Nomination Facility | Available, allowing you to nominate a family member or trusted individual for your FD. |
LIC’s Fixed Deposit Monthly Income Plan is a solid investment option for those seeking consistent monthly returns in 2025. Offering a guaranteed payout of ₹6,500 per ₹1 lakh investment, along with tax benefits, loan options, and a AAA rating, it is one of the safest and most reliable ways to invest your money.
Whether you’re a retiree, a conservative investor, or someone who values financial security, this FD plan can be an excellent addition to your investment portfolio. Start investing today to lock in these guaranteed returns and ensure your financial future remains secure.
Why LIC’s FD Plan is a Smart Investment Choice
LIC (Life Insurance Corporation) has long been recognized as one of India’s most trusted financial institutions. This trust extends to its Fixed Deposit (FD) schemes, which are low-risk, high-reward options for long-term investors. Here’s why the LIC FD Monthly Income Plan is a great choice in 2025:
1. Guaranteed Monthly Returns
If you are someone who values predictability, the LIC FD Monthly Income Plan provides steady income through guaranteed monthly payouts. With ₹6,500 per month for a ₹1 lakh investment, this plan is a great option for people who rely on their investments for monthly living expenses.
Example:
- For retirees: You can use the monthly payout to cover day-to-day expenses or healthcare costs.
- For young professionals: Use it as a secondary income stream to build savings or invest further.
2. Low-Risk Investment
Unlike market-linked products like stocks or mutual funds, which can be volatile, LIC’s FD plan offers fixed interest rates and guaranteed returns. This makes it a safe investment for those who prefer security over high returns.
3. Flexibility in Payment
One of the standout features of this plan is the flexibility it offers. Investors can choose from monthly, quarterly, or annual payouts based on their income requirements. This gives you the ability to adjust your investment strategy according to your financial needs.
- Monthly Payout: Ideal for those seeking consistent monthly income.
- Quarterly/Annual Payout: A better option if you’re looking to accumulate your interest for a few months and reinvest it.
4. Loan Against FD
Life is unpredictable, and sometimes you need access to funds before your FD matures. With LIC’s FD plan, you can easily borrow up to 75% of your FD value. This option allows you to access liquidity when necessary, without breaking your investment.
5. AAA/Stable Rating
LIC’s FD plans are rated AAA, indicating high safety and low credit risk. This provides investors with peace of mind, knowing that their money is secure with a trusted institution backed by the government.
How Does the LIC FD Monthly Income Plan Work?
Let’s break down how this plan works and how you can benefit from it:
Interest Rate and Payouts
With an interest rate of 6.5% per annum (as of 2025), the LIC FD plan is offering competitive returns. The interest is paid monthly, quarterly, or annually depending on your preference. The total monthly payout for ₹1 lakh investment is ₹6,500. This payout is guaranteed for the entire tenure of the FD.
Payout Options
- Monthly: If you want consistent monthly income, this is the option for you. For instance, with ₹1 lakh invested, you will receive ₹6,500 per month.
- Quarterly/Annually: These options provide a lump sum payout after every quarter or year. This can be useful if you want to accumulate interest over time and reinvest it.
Loan Against FD
After 3 months from the deposit date, you can avail of a loan up to 75% of your FD amount. This feature makes it flexible if you need funds in case of emergencies but don’t want to break your FD early.
Who Should Consider LIC’s FD Plan?
This FD plan is perfect for individuals who seek steady returns and security. Let’s look at the specific types of investors who would benefit most from this plan:
1. Retirees
Retirees who rely on regular income should definitely consider this plan. The guaranteed monthly payout of ₹6,500 for a ₹1 lakh investment ensures a reliable income stream, helping cover living expenses without taking on any investment risk.
2. Conservative Investors
If you’re someone who prefers safe investments over high-risk options, this FD plan offers low-risk returns. Unlike market-based investments, this FD guarantees a fixed interest rate, making it a secure option for conservative investors.
3. Tax-Savvy Investors
For investors looking to reduce their taxable income, LIC’s 5-year FD qualifies for tax deductions under Section 80C. This can help you save up to ₹1.5 lakh annually on your taxes while also earning regular income from the FD.
4. People Looking for Financial Security
Anyone who wants to protect their capital while earning a steady income will find this FD plan a great option. With LIC’s AAA rating, your investment is safe and growing at a fixed rate.
Invest in LIC’s FD Monthly Income Plan
Getting started with LIC’s FD Monthly Income Plan is simple. Here’s a step-by-step guide:
- Visit LIC’s Branch or Website: To start your investment, visit the nearest LIC branch or go to the LIC website to fill out the online application form.
- Select Your Investment Amount: The minimum investment is ₹1 lakh, but if you wish to receive monthly payouts, ₹2 lakh is usually required. The more you invest, the higher the monthly returns.
- Choose Your Tenure and Payment Frequency: Select a tenure (1 to 5 years) and decide whether you want monthly, quarterly, or annual payouts.
- Submit Your Documents: You’ll need to submit your Aadhaar card, PAN card, address proof, and other identification documents for KYC purposes.
- Make the Payment: Once all details are filled, you can pay the investment amount through cheque, demand draft, or online transfer.
- Receive Your Receipt: After the payment is processed, you’ll receive an official receipt confirming your FD.
Tax Implications and TDS on LIC FD
When you earn interest on your LIC FD, it’s considered taxable income. The interest income is subject to TDS (Tax Deducted at Source) if it exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). However, if your total taxable income is below the TDS threshold, you can submit Form 15G/15H to avoid TDS deductions.
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Pros and Cons of LIC Fixed Deposit Monthly Income Plan
Pros:
- Safe and Reliable: Backed by LIC, a government-owned entity.
- Steady Income: Guaranteed monthly payouts.
- Tax Benefits: Section 80C deduction for 5-year FD investments.
- Loan Against FD: Access to emergency funds without breaking your FD.
Cons:
- Penalties on Early Withdrawal: You may incur a penalty for withdrawing before maturity.
- TDS on Interest: Interest income above ₹40,000 (₹50,000 for seniors) is subject to TDS.
- Lower Returns Compared to Market: While it’s a safe investment, the returns are generally lower than stocks or mutual funds.
FAQs About LIC’s Best FD Plan 2025
Q1: What is the interest rate offered by LIC FD in 2025?
LIC offers an interest rate of 6.5% per annum for its FD plans in 2025.
Q2: Can I invest less than ₹1 lakh in LIC’s FD plan?
Yes, you can invest as low as ₹1 lakh, but monthly payouts usually require a minimum investment of ₹2 lakh.
Q3: What happens if I withdraw my FD before maturity?
There is a penalty for premature withdrawal. You will earn a reduced rate of interest compared to the original terms of your FD.
Q4: Are there any tax exemptions on LIC FD?
Yes, investments in a 5-year FD qualify for tax deductions under Section 80C of the Income Tax Act.
