Deposit insurance coverage got here again to limelight after the Silicon Valley Financial institution or SVB disaster within the USA. Given the worldwide nature of the financial system, individuals in India too began to ask if the banks can have an issue and are they lined by Deposit Insurance coverage.
In any case, not alongside in the past we had failing banks such because the Lakshmi Vilas Financial institution, Punjab and Maharashtra Financial institution, to not neglect the scare with Sure Financial institution.
Now, at the moment there aren’t any troubled banks, however what occurs in case your financial institution goes below. What occurs to the cash you have got within the financial institution?
A very powerful factor that you could know is that every one financial institution deposits are insured with the DICGC or the Deposit Insurance coverage and Credit score Assure Company of India.
However there are specific issues that you could learn about this protection and eligibility.
Listed below are a number of FAQs that may enable you perceive this layer insurance coverage higher. All FAQs are taken from this hyperlink on the DICGC web site.
What does the DICGC insure?
The DICGC insures all deposits equivalent to financial savings, mounted, present, recurring, and so on. deposits of most industrial banks, international banks, native space banks and regional rural banks. At current all co-operative banks are additionally lined.
Major cooperative societies are usually not insured by the DICGC.
What’s the most deposit quantity insured?
Every depositor in a financial institution is insured upto a most of
5,00,000 (Rupees 5 Lakhs) for each principal and curiosity quantity held by him / her.
Nevertheless, this restrict is relevant on each possession kind. For instance, when you’ve got a single holding financial savings account and one other joint holding financial savings account, then the Rs. 5 lakh restrict shall be relevant to each accounts individually, even in the identical financial institution.
Additional, when you’ve got a present account with the financial institution, it’s also lined individually for the Rs. 5 lakh insurance coverage.
Let’s say you have got Rs. 5.5 lakh in you private financial savings account (single holding), Rs. 3 lakh within the joint holding account and Rs. 10 lakh within the present account, then in case of financial institution default, that is how deposit insurance coverage will work.
| Account Sort | Precise Deposit Quantity |
Recoverable from Deposit Insurance coverage |
| Single Holding Financial savings | ₹ 5,50,000 | ₹ 5,00,000 |
| Joint Holding Financial savings | ₹ 3,00,000 | ₹ 3,00,000 |
| Present Account | ₹ 10,00,000 | ₹ 5,00,000 |
The insurance coverage pays you Rs. 5 lakhs (max) for the only holding account, Rs. 3 lakhs for the joint holding account and Rs. 5 lakhs (max) for the present account.
If I’ve cash in several branches of the financial institution, how a lot insurance coverage is relevant to me?
Throughout branches of the identical financial institution, the quantity is totaled and most Rs. 5 lakh deposit insurance coverage is relevant to your account.
What if I’ve cash in several banks?
For every financial institution, you should have a separate Rs. 5 lakh insurance coverage restrict relevant. This is applicable even when you’ve got a single account holding in every of the banks.
Methods to know if my financial institution is insured by the DICGC or not?
Easy, verify with the financial institution. Whereas most banks are lined, it’s good to seek out out if the protection is lively.
Can I improve my deposit insurance coverage with the financial institution and improve it to say Rs. 10 lakhs per account kind?
That is at the moment not doable. You possibly can open totally different account sorts or accounts with totally different banks to get the next cowl total.
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