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As per current DICGC rules, each depositor in a bank is insured up to Rs 1 lakh for both the principal and interest amount on deposits held by him in that particular bank. This includes all deposits held by a person in the current account, savings account, fixed deposits and so on. If the total of all the deposits held by an individual in a single bank exceeds Rs 1 lakh, then he/she will be able to get only Rs 1 lakh inclusive of principal and interest amount if the bank goes bankrupt.
Union Finance Minister Nirmala Sitharaman in her budget speech 2020 has proposed to hike the bank deposit insurance in scheduled commercial banks to Rs 5 lakh per depositor from the current Rs 1 lakh.
What kind of deposits are covered
- DICGC covers all deposits such as savings, fixed, current, recurring and so on except for the following deposits:
- Deposits of foreign governments;
- Deposits of Central/State Governments;
- Inter-bank deposits;
- Deposits of the State Land Development Banks with the State co-operative bank;
- Any amount due on account of and deposit received outside India
- Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India
What if you have accounts at different branches of the same bank?
Currently, the insurance cover offered by the DICGC covers all different accounts of one depositor held with different branches of the same bank for a maximum of Rs 1 lakh. Therefore, if you have more than one account with the same bank (even if in different branches), then, too, you will be insured for Rs 1 lakh only.
However, the deposit insurance coverage limit is applied separately to the deposits in different banks. For instance, let us say you have an account with Bank A and Bank B. Then, both the accounts will be separately insured up to Rs 1 lakh.
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