8.2% LIC Housing Finance FD Scheme 2019 – Should you invest?
LIC Housing Finance FD Scheme 2019 Review
LIC Housing Finance FD Scheme offers high interest rates where one can get interest up to 8.2%. Banks are reducing interest rates in recent months and they are currently offering 5% to 7.5% interest rates. LIC Housing Finance Fixed Deposit rates are far higher compared to bank fixed deposits. What are the features of LIC HFL FD Scheme? What are the interest rates of LIC Housing Finance FD Scheme? Is LIC FD Safe? Should you invest in LIC Housing Finance Fixed Deposit or avoid? This article is based on request on “suggest a topic”.
About LIC Housing Finance Limited
In summary, LIC HFL is the largest housing finance company in India and founded and promoted by Life Insurance Corporation (LIC).
The main objective of the company is to provide long term finance to individuals for purchase or construction of house or flat for residential purpose / repair and renovation of existing flat / houses. The Company also provides finance on existing property for business / personal needs and also gives loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centers / Office Space and also for purchase of equipments. It also provides long term finance to persons engaged in the business of construction of houses or flats for residential purpose and to be sold by them.
Features of LIC Housing Finance Sanchay FD Scheme
1) LIC Housing Finance FD comes with 1 year, 18 months, 2 years, 3 years and 5 year tenure.
2) This FD scheme, offer cumulative and non cumulative options. In cumulative option, the interest would be paid on maturity. In non cumulative option, interest would be paid monthly and yearly based on the option chosen.
3) LIC Housing Finance has named this scheme as “Sanchay” FD scheme.
4) Interest rates are ranging between 7.5% to 7.95% for general category.
5) Senior Citizens would get up to 0.25% higher interest rates. Means they would get up to 8.2%.
6) LIC Housing Finance employees and customers would not get any higher interest the ways Bajaj Finance FD scheme offers.
7) These interest rates are effective from 26th August, 2019.
8) You cannot open Online, but need to fill the application LIC Housing Finance FD form and submit it to the nearest LIC HFL office.
9) You can deposit a minimum of Rs 10,000 in this FD scheme.
What are the LIC Housing Finance FD Rates in 2019?
It offers 1 year to 5 years tenure FDs where one would get interest rates up to 7.95%.
A) LIC HFL FD Interest Rates – Non Cumulative – Monthly Interest Payment Option
B) LIC HFL FD Interest Rates – Non Cumulative – Yearly Interest Payment Option
C) LIC HFL FD Interest Rates – Cumulative Interest Payment Option
Note: LIC Housing Finance FD Rates for Senior Citizens would be 0.25% extra compared to the general category. For cumulative options, the interest would be compounded annually.
What is the minimum FD amount one can invest in LIC FD?
Here is the minimum deposit amount:
1) If you are opting for non cumulative monthly interest payment option, you need to invest the minimum of Rs 2 Lakhs and in multiples of Rs 10,000 there on.
2) If you are opting for non cumulative yearly interest payment option, you need to invest the minimum of Rs 10,000 and in multiples of Rs 1,000 there on.
3) If you are opting for cumulative option, you need to invest the minimum of Rs 10,000 and in multiples of Rs 1,000 there on.
Who is eligible to open a LIC Fixed Deposit?
The following are eligible to open this FD.
1) Resident Indian citizen and Non Resident Indian’s (based on certain terms and conditions)
2) Hindu Undivided Family (HUF)
3) Proprietorship concerns
4) Partnership firms
Complete eligible list of participants are indicated in the application form.
How to Open FD in LIC Housing Finance?
You can visit the LIC HFL website, download latest application form, fill the same and submit at the LIC HFL local office. You can download the latest LIC Housing FD Scheme form at this link.
What documents are required to open LIC Fixed Deposit Scheme?
The following documents are required for KYC along with latest Photograph.
a) Any of the following would be accepted as proof of identify
ii) PAN Card
iii) Driving License
iv) Voter card
v) Aadhaar Card
b) Any of the following would be accepted as proof of address
i) Latest telephone bill
ii) Electricity bill
iii) Gas bill
iv) Latest bank statement
vi) Aadhaar Card
vii) Driving license
viii) Voter Card
How is the financial performance of LIC Housing Finance Limited?
Every investor needs to check company profits before investing in the FD scheme. Here are the profits for the last 3 years
Year ending Mar-2017 – Rs 1,931 Crores
Year ending Mar-2018 – Rs 2,002 Crores
Year ending Mar-2019 – Rs 2,430 Crores
Since company profits are growing year on year, in future there are higher chances that the company would honor the payment of interest on time and repay your capital on time.
Why to invest in this FD scheme?
Here are some positive factors.
1) LIC Housing Finance is part of Life Insurance Corporation (LIC) and is trusted brand.
2) You can invest in this FD scheme with a minimum of Rs 10,000 and get higher interest rates up to 7.95% for regular investors and up to 8.2% for Senior Citizens.
3) This FD has a good credit rating of FAAA/Stable from Crisil, which indicates the highest safety of the investment.
Why NOT to invest in this FD scheme?
Here are some negative points.
1) NBFC sector is undergoing a crisis now and your investment could high risk.
2) Corporate FDs does not offer any security. In case of company gets windup for some reason, FD investors would get normal preference like any other creditors and repayment would happen in normal process. There would not be any preference given to FD investors.
3) Premature withdrawal rules make it unattractive.
4) You can open the FD only offline by submission of the paper application and is not online.
Some of the FAQs about this FD Scheme
1) How can I calculate the interest amount?
You can visit LIC Housing Finance FD calculator link which can help you to know the interest amount. Based on the option and tenure chosen, the interest amount would differ.
2) What is the LIC Housing Finance FD Rating?
If you are thinking “is LIC Housing Finance Fixed Deposit Safe”, you need to check the FD credit rating that can talk about its fundamentals. Crisil have rated these fixed deposits as “FAAA/Stable Rating” which indicates the highest degree of safety for the payment of interest and repayment of capital.
3) Is LIC Housing Finance a Government Company?
LIC housing finance is one of the largest housing finance company in India and promoted by Life Insurance Corporation (LIC). While LIC is part of the Government, LIC HFL is a private company, but majorly controlled by LIC, hence all policies of LIC would apply for LIC HFL to.
4) How the Interest received on these FDs is taxed?
LIC Housing Finance would deduct TDS on interest exceeding Rs 5,000 per annum. However, one need to calculate total interest received and pay income tax based on the income tax slab applicable to them in that year.
5) Can I take a premature withdrawal of my LIC FD?
One can take a premature withdrawal only after 3 months from the date of deposit or from the renewal of deposit. If you wish to break the FD between 3 to 6 months after opening FD, one would get 4% interest rate per annum. If you wish to break FD after 6 months of opening FD but before the maturity date of the FD, you would get 1% lower interest rate.
6) When the interest payment would be done for non cumulative deposits?
In case of non cumulative deposits, interest would be paid on the first day of the subsequent month. However, during the financial year end, it would be paid on the last day of the month i.e. 31st March.
7) Can we submit Form-15G or Form-15H?
Yes. Individuals can submit a form 15G or 15H to the company so that it would not deduct TDS on FD interest.
8) In an emergency, can I get a loan against my FD?
Yes, but after 3 months from the date of opening FD. One can request for the loan on this FD which would be up to 75% of the FD amount. The interest rate would be 2% higher than the FD interest rate on such loan.
9) Can NRI’s invest in this FD Scheme?
Yes. NRI’s can invest in this Fixed Deposit Scheme. However NRIs can open FD scheme for maximum of 3 years and all payments need to be done from NRO account only. The FD Maturity amount would go to NRO account only.
10) What is the FD interest rate on LIC Housing Finance for existing customers or employee?
The interest rate indicated in the above tables is applicable to everyone. Existing customers or employees would not get any extra FD interest.
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11) What is the LIC Housing Finance FD toll free number or contact number?
You can reach at any of the following details for queries or complaints.
i) You can reach them at Tel.: +91 22 2217 8600
ii) You can filter respective area offices at below link where you can get email and contact details.
Should you invest in LIC Housing Finance FD Scheme in 2019?
LIC Housing Finance is part of LIC that is a trusted brand. Its FDs have good credit rating from Crisil. It offers highest interest rates up to 8.2%. One should consider the NBFC crisis going on now. FD’s does not offer any security the way secured NCDs offer to some extent. If you are a high risk investor and willing to consider these risks, you can invest in this FD Scheme and enjoy high interest rates. If you are a low risk investor, stay away from such FD schemes.
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LIC Housing Finance FD Scheme 2019 Review