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Why Having Rs 10 Lakh in FDs with Just One Bank Might Be Risky
M
Moneycontrol•12-10-2026, 12:40
Why Having Rs 10 Lakh in FDs with Just One Bank Might Be Risky
- •The Deposit Insurance and Credit Guarantee Corporation provides coverage of up to Rs 5 lakh per depositor per insured bank, including both principal and interest.
- •Deposits held in the same bank are aggregated together, meaning multiple fixed deposits or savings accounts in the same bank do not increase your insurance cover.
- •Splitting your money across different insured banks allows each bank to have its own separate Rs 5 lakh DICGC protection limit.
- •DICGC insurance payouts are triggered during specific situations like the liquidation of an insured bank or when restrictions are placed under the regulatory framework.
Key Questions Answered
The Deposit Insurance and Credit Guarantee Corporation (DICGC) currently covers eligible bank deposits up to Rs 5 lakh per depositor per insured bank, which includes both the principal amount and accrued interest. This limit has been in place since February 2020.
Multiple deposits held in the same bank and in the same right and capacity are aggregated together before calculating the insurance cover. Opening several fixed deposits or having a savings account at the same bank does not increase the Rs 5 lakh ceiling.
No, simply using different branches of the same bank does not create separate insurance coverage. To increase your protected deposit limit, you must spread your savings across different insured banks.
