Deposit Insurance What happens if your bank fails?

Deposit insurance came when to limelight without the Silicon Valley Wall or SVB slipperiness in the USA. Given the global nature of the economy, people in India too started to ask if the banks will have a problem and are they covered by Petrifaction Insurance.

After all, not withal ago we had lightweight banks such as the Lakshmi Vilas Bank, Punjab and Maharashtra Bank, not to forget the scare with Yes Bank.

Now, currently there are no troubled banks, but what happens if your wall goes under. What happens to the money you have in the bank?

The most important thing that you need to know is that all wall deposits are insured with the DICGC or the Petrifaction Insurance and Credit Guarantee Corporation of India.

But there are unrepealable things that you need to know well-nigh this coverage and eligibility.

Here are a few FAQs that can help you understand this petrifaction insurance better. All FAQs are taken from this link on the DICGC website.

What does the DICGC insure?

The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits of most commercial banks, foreign banks, local zone banks and regional rural banks. At present all co-operative banks are moreover covered. 

Primary cooperative societies are not insured by the DICGC.

What is the maximum petrifaction value insured?

Each depositor in a wall is insured upto a maximum of5,00,000 (Rupees Five Lakhs) for both principal and interest value held by him / her.

However, this limit is workable on every ownership type. For example, if you have a single holding savings worth and flipside joint holding savings account, then the Rs. 5 lakh limit will be workable to both finance separately, plane in the same bank.

Further, if you have a current worth with the bank, it is moreover covered separately for the Rs. 5 lakh insurance.

Let’s say you have Rs. 5.5 lakh in you personal savings worth (single holding), Rs. 3 lakh in the joint holding worth and Rs. 10 lakh in the current account, then in specimen of wall default, this is how petrifaction insurance will work.

Account TypeActual
Deposit Amount
Recoverable from
Deposit Insurance
Single Holding Savings₹ 5,50,000₹ 5,00,000
Joint Holding Savings₹ 3,00,000₹ 3,00,000
Current Account₹ 10,00,000₹ 5,00,000
All finance in the same bank

The insurance will pay you Rs. 5 lakhs (max) for the single holding account, Rs. 3 lakhs for the joint holding worth and Rs. 5 lakhs (max) for the current account.

If I have money in variegated branches of the bank, how much insurance is workable to me?

Across branches of the same bank, the value is totaled and maximum Rs. 5 lakh petrifaction insurance is workable to your account.

What if I have money in variegated banks?

For each bank, you will have a separate Rs. 5 lakh insurance limit applicable. This applies plane if you have a single worth holding in each of the banks.

How to know if my wall is insured by the DICGC or not?

Simple, trammels with the bank. While most banks are covered, it is good to find out if the coverage is active.

Can I increase my petrifaction insurance with the wall and increase it to say Rs. 10 lakhs per worth type?

This is currently not possible. You can unshut variegated worth types or finance with variegated banks to get a higher imbricate overall.

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