Deposit Insurance (DICGC) – How far your fixed deposits are safe?

Deposit Insurance (DICGC) – How far my fixed deposits safe in IndiaDeposit Insurance (DICGC) – How far your fixed deposits are safe?

Almost all the individuals trust banks for their deposits in the form of Savings A/c, Current A/c, RD or FD as banks offer safety and guaranteed returns. But what happens if your bank goes bankrupt. Most of us are unaware of the fact that our deposits with the banks are also insured. Some think their 100% FDs are safe as these are insured by deposit insurance (through DICGC). What is this DICGC exactly and which bank deposits are insured under DICGC? Would your deposits are safe with banks?

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What is DICGC?

DICGC is the acronym for Deposit Insurance and Credit Guarantee Corporation (DICGC). Established on 15 July 1978, DICGC is a wholly-owned subsidiary of Reserve Bank of India to provide insurance of deposits and guarantee of credit facilities. DICGC insures all bank deposits like savings, fixed, current, and recurring deposit for up to the limit of Rs 5 lakh per bank.

Which banks are insured under DICGC?

DICGC covers all commercial and branches of foreign banks functioning in India, local area banks and regional rural banks. It also covers all central, state, and urban co-operative banks functioning in states or Union Territories.

Please note that the primary cooperative societies are not insured by the DICGC.

What is covered under DICGC?

DICGC covers all deposits made under savings A/c, current a/c, FD a/c and RD a/c, except the following:

1) Deposits of a foreign government

2) Deposits of Central or State Government

3) Inter-bank Deposits

4) Any amount due on account of and deposit received outside India.

5) Any amount which has been specifically exempted by the corporation with the prior approval of the Reserve bank of India.

What is the maximum limit covered under DICGC?

Each depositor in a bank is insured up to a maximum of Rs. 500,000 which includes both principal and interest amount.

If I have multiple deposits in various banks, how DICGC would work?  

If you have deposited with more than one bank, the deposit insurance coverage limit is applied separately to the deposits in each bank.

Can I know online, whether my FD is covered in DICGC?

While registering the banks as insured banks, the DICGC provides them with printed leaflets for display, which gives information related to the protection afforded by the Corporation to the depositors of the insured banks. In case of any doubt, one can visit the to check online, whether his bank is covered with DICGC. The depositor can even make a specific inquiry from the bank officials in this regard.

Would DICGC cover interest on deposits?

DICGC would cover the principal along with the interest up to the sum of Rs. 500,000. Any amount over and above this amount will not be insured by the DICGC.

If I have multiple accounts in the same bank with various branches, whether my insurance cover would increase?

If an individual opens multiple deposit accounts in a bank in the same type of ownership (no matter how many branches they are), they are considered as a single account. Therefore, the balances of all the accounts from all the branches in the same ownership are aggregated and insurance cover is available up to Rs 5,00,000.

But, if the same individual has opened one account or multiple accounts as a partner of the firm, or guardian or director of a company, then such accounts are all considered different accounts. Such deposit accounts will enjoy the insurance cover separately.

This has been explained with the help of a table below.

I have 3 banks and FDs in each bank, how does it work?

The funds held in different banks enjoy different insurance coverage limits. If the funds are in different types of ownership or are deposited in separate banks, they would be separately insured. All funds held in the same type of ownership at the same bank are added together before deposit insurance is determined.

Can the bank deduct any dues payable to it by the depositor?

Banks have the right to set off their dues from the amount of deposits. The deposit insurance is available after setting off such dues.

Do I need to pay anything for DICGC insurance?

The account holder or customer of the bank need not pay anything for the DICGC. The premium of the Deposit Insurance is borne entirely by the insured bank.

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If my bank goes bankrupt, what is the process to get a deposit insurance amount?

If any bank fails and goes into liquidation, a liquidator is appointed. The liquidator prepares a deposit-wise claim list and sends it to DICG for scrutiny and payment. The DICGC is responsible to pay to the liquidator the claim amounts up to Rs 5,00,000 for each depositor within two months from the date of receipt of claim list from the liquidator. The liquidator has to disburse the claim amount to each insured depositor, corresponding to the claim amount.

Can the DICGC withdraw deposit insurance cover from any bank?

The Deposit Insurance Scheme is compulsory for all the banks and no bank can withdraw from it. If the bank fails to pay the premium for the three consecutive periods, the Corporation may cancel the registration of an insured bank. In such an event, DICGC withdraws its coverage from the bank for default in the premium of payment, and the public is notified through newspapers.

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Suresh KP

Deposit Insurance (DICGC) – How far your fixed deposits safe

Suresh KP


  1. If there are 3 person and have made FD like this
    Are all 4 are covered seperately for 500000/ each totalling 2000000/
    Here A is common for all and is ist Holder

  2. My wife and I have two FDs, in our joint names,with a private sector bank, of Rs 5 lakh each. I am the primary (first) holder in one FD while my wife is the primary holder in the other. Are the FDs covered by DICGC? If both the FDs are held in one folio by the Bank, would they still be covered? Is it necessary to have separate folios for insurance cover?

    1. All private sector banks are covered under DICGC up to Rs 5 Lacs per account holder. In your case, since you are primary holder for 1 and your spouse is primary holder for 2nd one, both are covered up to Rs 5 lacs each

  3. Dear Sir

    In this article written FD account what about the PPF account also part of bank account and for senior SSC account also part of bank account .. So all put together ( PPF + SSC ) is it 5 L ? can you elaborate more and Explain the docuement

      1. The Question Is that In case One Member Having the(SBI) Savings account =1 lakhs and FD=4 Lakhs and PPF =10L and SSC =7 Lakhs in SBI . Now as per DICGC 5 Lakhs only covered. Now as per this example Savings and FD covered okay. Now Question is PPF and SSC savings comes 17Lakhs here. So As per DICGC rule is it all savings ( Savings+ FD+PPF+SSC) put together =5 L (DICGC) or Since PPF and SSC are gurantee so as per this example =17 lakhs are safe???in case of bankrupt…..

        1. Hello Veera, PPF, SCSS etc., fall under small saving schemes which are sovereign guarantee i.e. these are guaranteed by Govt of India. DICGC is only for bank fixed deposits / savings account. In your case it is Rs 5 Lakhs (Savigns + FB), entire amount is insured.

    1. No Madan, this insurance is provided by Deposit Insurance. The only way secure is opening single account per bank and depositing maximum of Rs 5 Lakhs per account. If there are some funds which your spouse / parents are holding, they can open separate account as an alternative option

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