Is your Fixed deposit safe?

how much are your fixed deposits safe?

We are in a country where people believe in safety of their investment first, then returns they get. As a result of this people prefer their money to invest in instruments like savings account, fixed deposits and ppf. . Fixed Deposits are generally considered to be fairly low-risk investments and people rarely have major concerns about getting their money back from the bank. But have you ever thought …..

  • If something were to happen to bank?
  • Some very big fraud or malpractice happened with bank, just like it happened with Punjab national bank(2018) ?
  • What if its license cancelled or liquidate  by  Rbi ?
  • What if any private or co-operative banks declare them shelves insolvent?
  •  What would happen to your Fixed Deposit then?

Here are a few Fixed Deposit facts to help reduce your fears.

Don’t Worry, Your Deposits Are Safe.

That’s right! Effective regulation by the Reserve Bank of India (RBI) has ensured that your deposits are safe. The RBI has made Deposit Insurance compulsory for all banks and no bank can withdraw from it.

What Does This Mean?

Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of Reserve Bank of India. It was established on 15 July 1978 under Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities. DICGC insures all bank deposits, such as saving, fixed, current, recurring deposit for up to the limit of Rs. 100,000 of each deposit in a bank.                                          

Below are some very important points to keep in mind regarding bank fixed deposit insurance.

  • Bank deposits insurance in india are managed by deposit insurance and credit guarantee corporation (DICGC)
  • Which banks are insured by the DICGC?                                                       All commercial banks, branches of foreign banks functioning in india, local area banks, regional rural banks, all co- operative banks
  • Which banks not covered by the DICGC?                                                              CO OPERATIVE BANKS from the States of Meghalaya, and the Union Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli are NOT covered under the deposit insurance system of DICGC. Primary cooperative societies are not insured by the DICGC.

The DICGC insures all deposits such as savings, fixed,current, recurring, etc

  • What DICGC not cover?
  • (i) Deposits of foreign Governments
  • (ii) Deposits of Central/State Governments
  • (iii)Inter-bank deposits
  • (iv) Deposits of the State Land Development Banks with the State co-operative bank
  • (v) Any amount due on account of any deposit received outside India
  • (vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
  • Total amount of 100000 is insured by DICGC including principal and interest, held in the same capacity.
  • You can ask your bank, whether they are registered under DICGC, and ask for a printed leaflet given by DICGC.
  • Deposits kept in different branch of same bank are clubbed and liable to claim only one lack rupees in case of any unwanted event. But Deposits in other bank are insured differently.

Below are very important points to understand.

            Same capacity and same right;

  • As stated above all deposits i.e. savings, current, FD, RD, etc. across various branches of the bank, held by you in your individual name, would be treated as in “same right and same capacity” and considered as one total amount for insurance purposes

   Different capacity and different right

Would be treated as held in “different right and different capacity” in following cases:

  • Account held in the capacity of a partner of the firm
  • As a guardian of a minor
  • As a director of a company
  • As a Trustee
  • As a Joint Account

Let’s understand above two points with the help of examples.




  • If you have any pending dues and liability towards bank…. It will be setteled against insurance amount
  • Deposit insurance premium is borne entirely by the insured bank.
  • If any bank goes into liquidation , the amount of his deposit upto Rupees one lakh within two months from the date of receipt of claim list from the liquidator.
  • Does the DICGC directly deal with the depositors of failed banks?


No. In the event of a bank’s liquidation, the liquidator prepares depositor wise claim list and sends it to the DICGC. After scrutiny the DICGC pays the money to the liquidator who is liable to pay to the depositors. In the case of amalgamation / merger of banks, the amount due to each depositor is paid to the transferee bank.


  • It is compulsory for all banks to registered under dcigc ?

The Corporation may cancel the registration of an insured bank if it fails to pay the premium for three consecutive half year periods. In the event of the DICGC withdrawing its coverage from any bank for default in the payment of premium the public will be notified through newspapers.

  • The insurance premium is paid by banks and depositors are not charged for the same.
  • The Deposit insurance was introduced in 1962 and the maximum cover was Rs 1,500…
  • The Rs 1 Lakh limit was set in year 1993 and has not been revised for 23 years. Assuming modest 6% inflation the insurance amount should have been raised to Rs 4 Lacks. I hope RBI is listening!
  • Earlier the insurance amount was revised regularly. Here is the deposit Insurance over the years:
  • 1962: Rs. 1,500
  • 1968: Rs.5,000
  • 1970: Rs.10,000
  • 1976: Rs.20,000
  • 1980: Rs.30,000
  • 1993: Rs.1,00,000
  • There are some banks which are de-registered. You can get the list on DICGC website. Almost all these banks are co-operative banks which is a huge risk.

Refer below files to get more clarity on this topic

  DICGC some important details

 dicgc_act DICGC_Booklet


So, if you were ever worried that your money was at risk, you can rest easy because the RBI has you covered.

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Chalo Niveshak

We are financial Advisor based at Ahmedabad. having a vaste experience of more than 10 years in financial sector. More than 500 families are happily enjoying services provided by us in their financial planning journey. We are also associated with more than 10000 financial advisors accross India and discussing about various needs and problems of investors. so we know how to deal with various objectives of various goals of our investors better than others.

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