Deposit insurance

Deposit insurance protects depositors if an insured bank fails. In India it is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India. Under current rules, each depositor is covered up to ₹5 lakh per bank, for principal and interest combined.

Why it matters

It sets a clear limit on how much of your bank money is protected independently of the bank’s own strength. Amounts above the limit at a single bank depend on that bank’s financial health or on a resolution process.

How to read it

• Per depositor, per bank. Deposits across all branches of one bank are added together. Deposits at different banks are covered separately.
• Capacity matters. Deposits held in different capacities and rights — for example, in your own name and jointly with someone else — may be covered separately. DICGC’s rules set out how.
• What is covered. Savings, current, fixed and recurring deposits at insured banks, including small finance banks, payments banks, regional rural banks, most co-operative banks and Indian branches of foreign banks.
• What isn’t. Corporate and NBFC deposits, mutual funds, bonds and shares.

Common misconceptions

• “All my FDs are insured.” Only deposits at insured banks, and only up to the limit per bank.
• “The limit is per account.” It is per depositor per bank, across accounts held in the same capacity.

In India: The ₹5 lakh limit has applied since 4 February 2020. Raising it has been under public discussion; check the DICGC website for the current limit before relying on it.