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Most people have an account in the bank. People keep lakhs of rupees in this account. They also invest in FD and other schemes through bank accounts. Most people keep money in the bank thinking that their money will be 100% safe, but is it so? Is your money deposited in the bank safe? Most people are not aware of this and the bank itself does not tell anything to the customers about this.

Guarantee of only Rs 5 lakh
If the bank defaults in any condition, then only the deposit of investors up to Rs 5 lakh remains safe. If the bank has more money than this, then it will sink. The reason for this is that Deposit Insurance and Credit Guarantee Corporation (DICGC) gives an insurance guarantee of only up to Rs 5,00,000 on bank deposits. DICGC is a company wholly owned by the Reserve Bank.

What is DICGC
DICGC insures the banks of the country. The amount of this insurance is not taken from the customer. The premium for this is deposited by the bank where the customer has deposited the money. However, this premium is very low. Let us tell you that earlier under this act, an amount of up to Rs 1 lakh was given in case of bank sinking or bankruptcy, but then the government increased it to 5 lakhs. Foreign banks which have branches in India also come under its purview.

In which banks this guarantee is available

All commercial banks of India (foreign banks, rural banks, cooperative banks) get a guarantee of insurance of Rs 5 lakh on the amount deposited. However cooperative societies are out of this purview. However, the insurance available under DICGC will give a maximum amount of Rs 5 lakh, which will include the principal and interest.

If you have an account in many branches of a bank and the bank sinks…

If you have opened accounts in many branches of the same bank in your name, then all such accounts will be considered as one. The sum of all these will be added and a maximum of Rs 5 lakh will be given to you. Even if you have a deposit of more than Rs 5 lakh, you will still get only Rs 5 lakh. The amount above Rs 5 lakh will be lost. However, if you have an account in two banks and both the banks collapse, then in such a situation you get Rs 5 lakh each from both the banks.

What about FD and other schemes

The insurance amount of Rs 5 lakh covers any kind of deposit in the bank. That means the amount deposited in the bank's savings account, FD, RD, or any other scheme, all the deposits are added. After this, a maximum amount of Rs 5 lakh is given. If your total deposit is up to Rs 5 lakh, then your money is taken out from the insurance. But if it is more than this, then you have to bear the loss of any amount above Rs 5 lakh.

Understand with an example.
Suppose A has deposited Rs. 4,00,000 in a bank's savings account, Rs. 2,00,000 in FD, and Rs. 22,000 in the current account. If all these amounts are added, then Rs. 6,22,000 is deposited in the bank. In such a situation, if the bank collapses, the customer will get a maximum of Rs. 5 lakhs only. He will have to bear a loss of Rs. 1,22,000. But if there is Rs. 2,00,000 in the savings account, Rs. 2,00,000 in FD, and Rs. 50,000 in the current account, then the total amount is Rs. 4,50,000. In such a situation, in case of a bank collapse, you will get the entire amount back because it will remain within the limit of Rs. 5 lakhs.