Eligible bank deposits in India are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ?5 lakh per depositor per bank, including both principal and accrued interest.
Importantly, opening multiple savings accounts or FDs at different branches of the same bank does not automatically increase the insurance cover. Deposits held in the same right and capacity are aggregated.
For example, if you hold ?2 lakh in savings and ?6 lakh in an FD at the same bank, the total is ?8 lakh, but the applicable DICGC insurance ceiling is ?5 lakh.
Deposits held with different banks are insured separately, subject to the applicable conditions.
Action: If you maintain large bank deposits, review how your money is distributed across banks.
