When a bank runs into trouble, the first question every depositor asks is simple: how much of my money is safe? In India the answer comes from the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI. The cover is ₹5 lakh per depositor per bank, and how your accounts are counted decides whether you are fully covered. This guide explains the rule with examples, what is not covered, and how quickly you would be paid.
The limit is per bank, not per account and not per branch. DICGC adds up every deposit you hold in the same right and capacity at that bank, across all its branches, and insures the total up to ₹5 lakh. Accrued interest counts too. DICGC’s own example: ₹4,95,000 of principal plus ₹4,000 of interest is ₹4,99,000, so all of it is insured. If your principal alone is ₹5 lakh, the interest on top is not covered.
| Your situation | How it is counted |
|---|---|
| Savings account and FD at the same bank, both in your name | Added together. One ₹5 lakh limit. |
| Accounts in two different banks | Insured separately. Up to ₹5 lakh at each. |
| Same bank, two branches | Added together. One limit. |
| Joint account with the same names in the same order | Added together as one joint holding. |
| Joint account with the names in a different order, or a different group of holders | Treated as a separate holding, each with its own ₹5 lakh. |
| Deposit as a guardian, partner, director or trustee | Treated as a different capacity and insured separately from your personal deposits. |
| Sole proprietorship account | Added to your personal deposits. |
Example: you hold ₹3 lakh in a savings account and ₹4 lakh in an FD at one bank, both in your name. The total is ₹7 lakh, so ₹5 lakh is insured and ₹2 lakh is exposed. If you moved the FD to a second bank, both deposits would be fully covered.
Post office savings schemes are not DICGC products either. They are run by the government, so they sit outside this system. Our post office time deposit guide covers how they work.
Participation is compulsory for commercial banks, including public sector, private sector, foreign banks, small finance banks and regional rural banks, and for cooperative banks, including urban, state and district central cooperative banks. If you are unsure about a smaller or cooperative bank, DICGC publishes a list of insured banks on its website. Check it before you park a large amount there.
You do not deal with DICGC directly. How the payout works depends on what happens to the bank:
Under the restricted-bank route, you may have to submit a signed willingness form and attested ID documents to the bank. Read the notice your bank sends. Missing paperwork can delay your payout.
Reports in June 2026 said the finance ministry had proposed raising the cover from ₹5 lakh to ₹7.5 lakh and sent the proposal to the PMO for approval. We could not find any confirmation that it has been approved or notified, and DICGC’s own guide still states ₹5 lakh. Plan around ₹5 lakh until the RBI or DICGC announces a change. The cover has stayed at ₹5 lakh since February 2020.
If your deposits at one bank are below ₹5 lakh, DICGC fully covers you and a bank’s safety matters far less. If they are well above it, the sensible fix is dull but effective: spread the money across banks, or use different capacities such as a joint holding, so no single bank holds more than the insured amount. Do not chase a higher rate at a weaker bank for an amount you cannot afford to have frozen. Our FD interest rates guide compares banks, and the FD laddering guide shows how to stagger maturities across banks.
Is ₹5 lakh insured per account or per bank?
Per depositor per bank, across all your accounts in the same name and capacity at that bank.
Does the ₹5 lakh include interest?
Yes. Principal and accrued interest are added together and the total is insured up to ₹5 lakh.
Do I have to buy deposit insurance?
No. It is automatic for deposits at insured banks, and the bank pays the premium.
Are big private banks and SBI covered too?
Yes. DICGC cover applies to every insured bank, regardless of its size.
Are my mutual fund investments insured?
No. DICGC covers bank deposits only.
This is general information, not financial advice. Sources: DICGC, A Guide to Deposit Insurance (dicgc.org.in), and news reports on the proposed limit increase. Verified October 2026.
