Comparison between LIC’s Jeevan Akshay VI and Bank’s FD

LIC’s Jeevan Akshay VI is an immediate annuity plan, which means monthly, quarterly, half yearly or year pension will start immediately on deposit of one time single amount. The policy holder can opt for one of the ten options for pension. (Know more about the options).

This plan is similar to Fixed Deposit that is, one single amount has be deposited to avail annuity (pension) while FD provides maturity after a specified term. The main difference between these investments is Fixed Guaranteed Return for Life Time in case of Jeevan Akshay VI and Fixed Guaranteed Return for a Specified Limited Term in case of FD. So, interest rate will help us to understand which plan is better than other.

For comparison purpose, let’s Suppose, A deposits Rs. 10,36,250 in a FD scheme with one year term and B takes Jeevan Akshay plan with Rs. 10,36,250. One year term has been taken because Jeevan Akshay provides annuity or pension. Now corresponding returns after a year in both schemes are calculated below. (Depositor’s age is taken as 50 Years).

FD Interest: Rs. 77,195 compounded quarterly @ 7.25% (SBI rate for 1 year Term). [FD Calculator]

Jeevan Akshay Return: Rs. 74,350 with Option 6 (Annuity for Life with return of purchase price on death).

Above comparison simply proves that FD has higher return by Rs. 2845 in one year, but what will happen if interest of FD is changed to some lower value while LIC policy keeps on providing return at same rate. Let’s talk about possibility of decrement of interest rate of FD.

Following table indicates how SBI has changed its interest on 1 year term deposit (FD) from year 2006 to 2015.

Year Maximum of the Year Minimum of the Year
Interest Rate (%) Change Date Interest Rate (%) Change Date

Interest Rates of developed economies are close to zero and even there are countries where depositors pay to bank to keep their money. Interest rate in developing countries across the globe is on the declining track. Central Banks of various countries (like RBI in India) who decide interest rate and banks within that country follow to change their interest rate accordingly.

Following table shows the interest rates of Central Banks of major economies.

S .No. Countries Interest Rate (%) S .No. Countries Interest Rate (%)











New Zealand












South Africa









United States






Great Britain












South Korea






As we can see in the above table, India has higher interest rate and as our economy grows, interest rate is expected to come down and that will force banks in country to lower interest rate on customers’ deposits like FD and RD. if the rate comes below 7% and keeps decreasing in the future, then Jeevan Akshay VI will be definitely a better option which provides guaranteed return at same rate for life time.

Comments & Reviews

Wrote : 03-02-2018 23:29:12

One more best advantage is Lic is not deducted tds in fd deduct tds

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Wrote : 18-11-2017 10:56:25

We cannot withdraw the principal amount in case of emergency is a great drawback compared to FD's. Its equal as if you have lost the principal amount.

Replied : 20-11-2017 01:21:21
Now, Jeevan akshay has provision of surrendering in case of critical illness.

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Wrote : 04-11-2017 19:51:27

Any one retiring with a huge amount of superannuation benefits and having no guaranteed pension may invest some amount in this plan. But interest rates being a double-edged sword (could move both ways), we cannot risk putting big /whole amounts in this annuity scheme. Part of our retirement corpus should also go compulsorily into equity-related instruments like MIPs and Balanced funds of Mutual fund industry, to enhance returns while mitigating markets risk also to certain extent

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Wrote : 20-10-2017 12:45:09

Very good benefit of Lic jeevan akshay vi pension plan .

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Wrote : 27-08-2017 22:53:48

Certain advantages - 1) no fear of falling interest rate 2) economical mental stability to little extent 3) one point which is unnoticed - although not suggesting substitute to term plans where mostly no returns of premium, one should consider last 3 options of Jeevan Akshay as a term plan to secure family. If you are younger and no need of monthly annuity consider these payins for sip in mutual funds.

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Wrote : 20-06-2017 12:16:15

Is the annuity received monthly from LIC Jeevan Akshay VI plan taxable?? Kindly revert guys.

Replied : 20-06-2017 12:24:21
Yes, annuity will be taxable.

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Wrote : 06-03-2017 11:36:28

Real benefit is only when you start at age 67 or 68, and opt for lifetime benefit without return of purchase price. One could opt for 10 years guaranteed payment without much reduction in annuity payments at around 10.5%, the benefit continues if you happen to live beyond 10 years. Sort of a risk cover and insurance policy... I think if you live to be 90+, you have great advantages - though the value would have depreciated. In FD it would have depreciated anyway.

Replied : 06-03-2017 17:25:18
Thanks for your insights.

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Wrote : 06-11-2016 14:22:13

Why not tax free bonds? (though not for lifetime, you get the tax-efficient and guaranteed returns for 10 years and you also get the liquidity for the interest part)

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Wrote : 12-09-2016 01:17:01

The prediction by financial experts is that by 2020, the interest rate will become 4%. The remarks made by the person is absolutely wrong. What is meant by growth? More industries should come. For any industry, loan at the minimum interest rate is required. This is why Government is giving pressure on RBI to reduce the interest. Less interest, entreprenures will avail good volume of loan from banks. Mr Raghuram Rajan had to leave his post for the sole reason that he was against further interest reduction. Since a new person is posted, he has to show some action in favour of Government. If economy grows, then definitely interest will come down. In Japan, people who keep money in banks have to pay fee to the bank for keeping their money. Hence, Jeevan Akshay which offers 7.5% to 8% life long to the annuitant and his spouse with return of money to nominees after the death of the spouse is a big advantage to all customers. Pension is a legally binding contract between LIC and custo

Replied : 12-09-2016 08:41:36
Thanks for your insightful comments.

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Wrote : 14-08-2016 12:43:25

Well, the FD has liquidity, you can cash it when and if you want. Whereas the one time payment to LIC can be claimed only after your death, and again no loans can be availed against it. Yes, Likely changes in FD interest rates over your life period is a factor to think about.The interest rates in other countries are going down, because economy is not growing. India's economy is growing and will demand funds and the government want to push the growth rate GDP 10% and that might involve increasing the fiscal deficit target to fuel growth. When that happens, interest rate will move up. So this scheme now benchmarked at 7.25% FD and with governmnet's persistent need to borrow money, can keep interest rate above the inflation target upper limit of 6% and so not much slip is likely from the current FD interest rate of 7.25%., when the economy picks up momenturm. Ofcourse there is more room for further research

Replied : 14-08-2016 13:20:03
Thanks for your putting up your analysis, this will definitely help customers to consider these points while taking their purchase decisions.

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Wrote : 26-01-2016 17:53:42

what about general citizens when they want to live with fixed deposit interest. India govt collects funds from foreign countries what is the interest payable to them or share given to them. Without collecting amount from foreign countries govt /RBI can permit banks to collect amount from our people and pay reasonable fixed interest say 9.5 %

Replied : 26-01-2016 18:19:14
Citizen can go for interest earned from FD and will be taxable same as jeevan akshay plan but the only difference is guaranteed return for life time in case of jeevan akshay.

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