7.7% LIC HFL Sanchay FD Scheme – Should you invest?

LIC HFL Sanchay Fixed Deposit Scheme ReviewLIC HFL Sanchay FD Scheme – Should you invest?

LIC Housing Finance Limited (LIC HFL) is one of the renowned housing finance companies of India. It provides long term finance to individuals, companies and corporations. The home loans offered by the company are at so attractive rate of interest that the customers find it easier to repay. The company started fixed deposit scheme in the year 2007 in the name of LIC HFL Sanchay Public Deposit Scheme.  Here it offers some attractive interest rates. This post is based on suggest a topic from one of the readers. Should you invest in LIC HFL Sanchay Fixed Deposit Scheme?

Also Read: Best Value Mutual Funds that focuses on value investing

Features of LIC HFL Sanchay FD Scheme

Listed below are some of the key features of LIC HFL Sanchay FD Scheme:

1) The minimum amount of investment is Rs 10,000 and thereafter additional deposit accepted in the multiples of Rs. 1,000.

2) The deposits can be made under cumulative or non-cumulative options.

3) Deposits can be made for the duration of 1 year, 18 months, 2 years, 3 years and 5 years.

4) For the NRIs, the maximum term of deposit is 3 years.

5) Under the cumulative option, the interest is compounded on an annual basis and paid on maturity. Under non-cumulative option, the interest amount is paid on an annual basis. The Interest is directly credited to bank accounts, if ECS option is opted.

6) Deposits can be made by resident individuals, HUF, Private Limited Companies, Co-operative societies and Association of persons. Even NRIs can make deposits under this scheme.

7) Deposits are accepted from individual as well as in joint names (not more than three)       .

8) Loan facility available on these FD Schemes to the tune of 75% of the FD amount. The interest rate would be 2% higher than the FD interest rate.

Application form can be downloaded here.

What is the credit rating of LIC HFL Sanchay FD Scheme?

The “Sanchay” Public Deposit Scheme has been rated as FAAA / Stable by CRISIL.

What are the interest rates of LIC HFL Sanchay Fixed Deposit Scheme?

The interest rates of LIC HFL Sanchay FD Scheme have been revised on 15th February, 2018.

Interest rates applicable to retail deposits up to Rs. 25 Crores

Interest rates applicable to retail deposits more than 25 Crores

LIC HFL Sanchay FD Scheme-Interest rates more than 25 Crores

Can NRI invest in this scheme?

Deposits from Non-Resident Indians and persons of Indian origin resident outside India would be accepted in accordance with the regulations governing the acceptance of deposits from NRIs. Deposits would be accepted for a maximum tenure of 3 years, from NRO account only. Payment of interest and the repayment shall be made only by credit to the NRO Account. TDS will be deducted as applicable to non-residents.

Also read: Best Largecap Mutual Funds to invest in India

How the interest is taxed in this LIC HFL Sanchay FD Scheme?

The interest received on FD has to be added into the total income and taxed accordingly as per existing tax rates of the individual. If any customer is opening a FD account with LIC HFL without Pan Card, TDS is deducted at the rate of 20% instead of 10% under section 206AA. It is always better to provide PAN card when you are opening such FD Scheme to avoid TDS rates.

Is premature withdrawal allowed in this FD Scheme?

Here the guidelines on premature withdrawal.

1) No premature withdrawal will be allowed before the completion of three months. In case of request for premature withdrawal after the expiry of three months, but before 6 months from the date of the opening FD scheme, an interest rate of 4% per annum only would be paid to individual investors. Non individual investors would not receive any interest. In case of request for premature withdrawal after the expiry of 6 months, but before maturity, 1% lower interest rate would be paid compared to normal interest rates.

b) In the event of the deposit holder already having/received interest at a higher rate, the difference in the total interest paid and revised interest payable would be adjusted against the interest/principal amount.

c) The brokerage payable to authorized agents is for the period completed and excess brokerage paid as a result of pre-payment of the deposit will be recovered.

d) Outstanding post-dated interest warrants in the custody of the depositor, if any, should be surrendered to LIC Housing Finance Limited.

Can we give Form 15H /15G to avoid or reduce income tax?

Form 15H or 15G are self-declaration forms required to be furnished by the assessee to LIC HFL for nil or lower deduction of TDS on interest of FD. Yes, form 15H or 15G can be submitted to avoid or reduce income tax.

Reasons to invest in LIC HFL Sanchay FD Scheme

Here are some positives in this FD scheme

1) Fixed deposit of LIC HFL offers a higher rate of interest compared to bank FDs.

2) The scheme has been rated FAAA/Stable by CRISIL.

3) With strong support of its investors, the company is gaining grounds day-by-day.  Not only individuals, HUF, Limited and Private Limited Companies, Co-operative societies can also invest in the scheme.

4) It offers a number FD Tenures to choose from for the investment.

5) It offers an additional rate of interest to the senior citizens.

Drawbacks of investing in LIC HFL Sanchay FD Scheme

1) It is totally non-flexible. Funds once parked cannot be withdrawn before the end of tenure.

2) Premature closure of the FD account attracts heavy penalty.

3) One cannot deposit any additional amount in the existing FD amount. If you want to invest any additional amount, a new FD account has to be opened. Once opened, even the tenure of FD account cannot be altered. 

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Should you invest in LIC HFL Sanchay FD Scheme?

FDs have always been an attractive financial instrument for investors who are looking for fixed income. LIC HFL is a distinguished company in the field of finance. It offers best FD scheme with handsome rates of interest. The LIC HFL FD rates are the highest for the deposits of the tenure of 3 years to 5 years.  It can prove to be a good option to park your funds with stability and reliability. If you are a low risk taker and looking for a fixed income option or opt to grow your money (cumulative option), you can invest in such fixed deposit scheme.

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LIC HFL Sanchay FD Scheme – Should you invest

Suresh KP


  1. I am getting confused with your LIC RATE OF INTEREST JUST NOW I READ INTEREST @ 11.80 % which one is correct

  2. Sir,

    I am investing in following mf scheme since last 4 years and can continue for next 8 to 10 years. I am retiring after 8 years. Kindly advise whether my portfolio is good or not. kindly also advise any changes .

    1 ABSL Frontline Rs 3000/-pm
    2 ABSL MNC Rs 2000/-pm
    3 ABSL pure value Rs 2000/pm
    4 HDFC Mid cap opp Rs 2500/pm
    5 Reliance Equity opp Rs 1000/pm
    6 IDFC Premier Eqty Rs 2000/pm
    7 Franklin smaller cos Rs 2000/-pm

  3. Hi sir m currently investing in :-
    1. Mirae asset emerging bluechip fund – 2k/m
    2. Icici value discovery fund – 2k/m
    3. Franklin focused india fund – 2k/m
    4. Franklin smaller companies fund – 2k/m
    5. Dsp blackroack smallcap fund -2k/m
    6.Uti trans and logistic fund – 2k/m
    7. Sbi healthcare opportunities fund -1.5/m

    hwz my portfolio nd funds need to invest more 5k/m in which should i diversify dis amount or add a new….my horizon is of long term i.e 20 years….want to take high risk plz give ur suggestion.

      1. any suggestion which fund should i replace wid icici and for fresh 5k/m investment which funds should i select

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