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Your Rs. 5 Lakh FD Might Not Be as Safe as You Think: Understand Deposit Insurance Limits
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Moneycontrol•29-09-2026, 11:28
Your Rs. 5 Lakh FD Might Not Be as Safe as You Think: Understand Deposit Insurance Limits
- •Fixed deposits are often considered safe, but many overlook the risk of keeping large amounts in a single bank.
- •The DICGC insures eligible bank deposits up to Rs. 5 lakh per depositor, per bank, including both principal and accrued interest.
- •Multiple accounts or FDs within the same bank are generally clubbed for insurance calculation, with the Rs. 5 lakh cap applying to the aggregated amount.
- •To spread risk and maximize insurance coverage, consider dividing your deposits across different banks, as the DICGC limit applies separately to each bank.
- •Accrued interest also counts towards the Rs. 5 lakh limit; if your principal plus interest exceeds this, the amount above the ceiling is not covered.
Key Questions Answered
The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures eligible bank deposits up to Rs. 5 lakh per depositor, per bank. This ceiling includes both the principal amount and any accrued interest.
No, opening multiple FDs or having multiple accounts in the same bank does not create separate insurance covers. Deposits held across different accounts and branches of the same bank are aggregated, but the total insurance coverage remains capped at Rs. 5 lakh.
To spread the concentration risk, depositors can divide their funds between two or more different banks. DICGC applies the Rs. 5 lakh insurance limit separately to deposits held with different financial institutions.
