LIC Housing floats FD scheme

Mumbai: LIC Housing Finance has for the first time launched a fixed deposit product to raise Rs1,000 crore this fiscal. The scheme will offer an interest of 9 per cent per annum on a three-year deposit and 9.25 per cent per annum on a five-year deposit. The minimum deposit is Rs10,000 with multiples of Rs1,000 thereafter.

For the cost of funds has been rising and was 10.5 per cent in 2006-07.

Officials said as 85 per cent of customers are on floating interest rate loans, the organisation can pass on the interest rate hikes but is looking at a better way of containing fund costs. It is seeking to diversify its sources of funds and de-risk borrowings by tapping the retail depositors.

The FD scheme has been rated FAAA- stable by CRISIL.