INCOME TAX29 Sept 2026
Bank FD rules: What happens to your money if a bank fails? The ₹5 lakh insurance limit, explained | Mint
Your bank deposits are insured only up to ₹5 lakh per depositor, per bank, under Deposit Insurance and Credit Guarantee Corporation (DICGC) rules. This covers both principal and interest. So if you hold ₹10 lakh in one bank as fixed deposits, savings, or across branches, anything beyond ₹5 lakh is unprotected. Splitting money across banks raises your total cover.
Key Statutory Highlights
- The DICGC insures eligible deposits up to ₹5 lakh per depositor per bank, covering both the principal amount and the interest earned.
- All your savings accounts and fixed deposits in the same bank, including those at different branches, are clubbed together for this ₹5 lakh insurance limit.
- The ₹5 lakh cover applies separately to each bank, so spreading your deposits across several banks gets more of your money insured.
Actionable Advice for Taxpayers / Founders:Before placing a large amount in a fixed deposit, check that your bank is on the DICGC-insured list, and consider splitting the money across different banks so you stay within the ₹5 lakh cover per bank. Certain joint accounts and deposits held in different capacities may be insured separately, so understand the ownership and paperwork before using such structures.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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