LIC New FD Scheme: For investors looking for a safe and steady monthly income, LIC has introduced a scheme that is gaining significant attention. Under this plan, a one-time deposit of ₹2 lakh can generate a fixed monthly income of up to ₹6,736, making it an attractive option for retirees, senior citizens, and conservative investors. Backed by the trust and stability of Life Insurance Corporation of India, this scheme combines income certainty with long-term financial security.
Unlike market-linked investments, this LIC scheme focuses on guaranteed payouts, which is why many people are referring to it as a “new FD-like income scheme,” even though it technically functions differently from traditional fixed deposits.
Understanding How the LIC Monthly Income Plan Works
This LIC scheme is designed on the annuity model. Investors make a single lump-sum investment, and in return, LIC provides a fixed monthly income for a predefined period or even for life, depending on the chosen option.
When an individual invests ₹2 lakh under the eligible option, LIC calculates the monthly payout based on age, payout frequency, and the annuity variant selected. In certain payout structures, the monthly income can go up to ₹6,736, offering a predictable cash flow that does not fluctuate with market conditions.
The biggest advantage of this plan is income certainty. Once the policy is issued, the payout amount remains fixed throughout the tenure.
Why This Scheme Is Being Compared to an FD
Many investors are comparing this LIC plan to a fixed deposit because of its stable returns and low risk. Like an FD, it requires a one-time investment and provides regular income. However, there are some key differences.
Unlike bank FDs, where interest rates can change on renewal, LIC’s payout is locked in at the time of purchase. There is no reinvestment risk. Additionally, LIC’s backing adds an extra layer of confidence for risk-averse investors.
For people who depend on monthly income to manage household expenses, this scheme works more like a pension substitute rather than a traditional savings product.
Monthly Income Calculation on ₹2 Lakh Investment
The monthly income amount depends on multiple factors, including the annuity option selected and the age of the investor at the time of purchase. For certain age brackets and payout modes, the monthly income can reach ₹6,736 on a ₹2 lakh investment.
You can choose to receive income monthly, quarterly, half-yearly, or annually. Monthly payouts are especially popular among retirees as they help manage regular expenses such as groceries, medicines, and utility bills.
It is important to note that the exact payout is finalized at the time of policy purchase and remains unchanged throughout the policy term.
Eligibility Criteria for LIC Monthly Income Scheme
To invest in this LIC scheme, certain eligibility conditions must be met. The minimum age to purchase the plan generally starts at 30 years, while the maximum entry age can go up to 85 years, depending on the annuity option.
There is no requirement for a regular income source, making it suitable for retired individuals and homemakers. Since this is a single-premium plan, the investor needs to make the entire payment upfront.
Joint life options are also available in some variants, allowing income to continue for the surviving spouse after the policyholder’s death.
Key Rules and Conditions You Should Know
Once the policy starts, the income payout begins as per the selected frequency. The policyholder cannot change the payout option later, so careful planning is necessary before purchase.
Most LIC annuity-based schemes do not offer loan facilities. Surrender options may be limited, especially in the early years. Therefore, this plan is best suited for long-term income needs rather than short-term liquidity.
In some options, the purchase price or a fixed amount is returned to the nominee after the policyholder’s death, providing additional financial security to the family.
Tax Treatment of Monthly Income
The monthly income received from this LIC scheme is taxable as per the individual’s income tax slab. There is no tax exemption on annuity income, so investors should consider post-tax returns while planning.
However, since the income is spread across months, it is easier to manage tax liability compared to lump-sum interest income. Consulting a tax advisor can help optimize overall financial planning.
Who Should Consider Investing in This LIC Scheme
This scheme is particularly suitable for retirees who want a guaranteed monthly income without market risk. Senior citizens who rely on fixed income sources can benefit greatly from the predictable cash flow.
It is also ideal for individuals planning early retirement or those who want to convert a portion of their savings into a pension-like income stream. Conservative investors who prefer stability over high returns may find this plan appealing.
However, young investors seeking wealth creation or higher returns may want to combine this with growth-oriented investments.
Advantages of Choosing LIC for Monthly Income
LIC has decades of trust and a strong track record in managing long-term financial commitments. Its government-backed status reassures investors about payout reliability.
The simplicity of the scheme, fixed income structure, and absence of market risk make it a stress-free option. Once invested, there is no need for constant monitoring or reinvestment decisions.
For families, the joint life and return-of-purchase-price options add an extra layer of financial protection.
Things to Consider Before Investing
While the scheme offers stability, liquidity is limited. Investors should ensure they have sufficient emergency funds before committing a lump sum.
Since returns are fixed, the scheme may not fully beat inflation over the long term. Therefore, it works best as part of a diversified financial plan rather than the sole investment.
Understanding all payout options and selecting the one that matches your financial goals is essential.
Conclusion
A ₹2 lakh deposit generating up to ₹6,736 monthly income makes LIC’s new income scheme an attractive option for those seeking security and predictable returns. With fixed payouts, trusted backing, and flexible annuity options, it serves as a reliable income solution for retirees and conservative investors.
While it may not offer high growth, its strength lies in stability, peace of mind, and guaranteed income. For individuals prioritizing financial certainty over risk, this LIC scheme can be a valuable addition to their long-term financial planning.