Editorial Team
5 mins read • 26 Dec 2025
Unlike other investment avenues and asset classes, Deposits are the only class to have an explicit Deposit Insurance cover in order to provide a safety net against bank failures. No wonder then that Deposits can provide unmatched safety with peace of mind. Let's understand what is covered under Deposit Insurance.
Who provides Deposit Insurance cover?
Deposit Insurance cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India.
Deposits with which banks are covered by DICGC?
Deposits with all Commercial Banks including Small Finance Banks, Payment Banks, Regional Rural Banks, branches of Foreign Banks functioning in India and all Cooperative Banks are covered.
Are all types of Deposits insured by DICGC?
DICGC insures all deposits such as Savings Accounts, Current Accounts, Fixed Deposits including Recurring Deposits.
What is the maximum deposit amount insured by DICGC?
Each depositor in a bank is insured upto a maximum of ₹ 5,00,000 (Rupees Five Lakhs) for both principal and interest amount across all covered deposit types held in the same right and same capacity as on the date of liquidation / cancellation of bank's license or the date on which the scheme of amalgamation / merger / reconstruction comes into force / imposition of “All Inclusive Directions” on the bank by the Reserve Bank of India, with restrictions on withdrawal of deposits.
Multiple deposits with the same bank are combined together for the purpose of applying the deposit insurance coverage limit.
If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank.
Does the depositor have to separately apply for DICGC cover? Who pays the premium for DICGC cover?
Deposits are automatically covered by DICGC. Depositors do not have to apply separately. Deposit insurance premium is paid entirely by the insured banks.
Jargon Buster:
What does same right and same capacity mean?
If an individual opens one or more savings, current or fixed deposit accounts in one or more branches of a bank, all such accounts are considered as held in the same capacity and in the same right. Therefore, the balances in all these accounts are aggregated and insurance cover is available up to a maximum of Rupees Five Lakhs.
If the same individual opens other deposit accounts in the capacity of a partner of a firm or guardian of a minor or director of a company or trustee of a trust or a joint account, say with his spouse, in one or more branches of the same bank then such accounts are considered as held in different capacity and different right. Accordingly, such deposits accounts will also enjoy insurance cover up to Rupees Five Lakhs separately.
If three individuals A, B & C hold more than one joint deposit accounts in which their names appear in the same order then all these accounts are considered as held in the same capacity and in the same right. Accordingly, balances held in all these accounts will be aggregated for the purpose of determining the insured amount within the limit of Rupees Five Lakhs
However, if individuals open more than one joint accounts in which their names are not in the same order for example, A, B and C; C, B and A; C, A and B; A, C and B; or group of persons are different say A, B and C and A, B and D etc. then, the deposits held in these joint accounts are considered as held in the different capacity and different right. Accordingly, insurance cover will be available separately up to Rupees Five Lakhs to every unique combination of name and order.
Credit: DICGC. Visit the official DICGC Website ↗
Safety Tip: If you have Rupees 20 Lakhs, it is safer to spread it across 4 different banks (Rupees 5 Lakhs each) rather than keeping it in one bank, to maximize your insurance coverage.