Most people never need to think about what happens if their bank gets into serious trouble. Deposit insurance exists for the day that does happen. It’s a useful protection for small savers, as long as you’re clear about where its limits lie.
The ₹5 lakh rule, tested on real situations
The limit has stood at ₹5 lakh since February 2020. Reports in 2026 suggested that the government was considering raising it, but we’ve found no confirmed change. Check dicgc.org.in for the latest position.
The way it works depends on how your money is spread out. All these examples are illustrations.
Two accounts at the same bank. You have ₹3 lakh in savings and ₹4 lakh in a fixed deposit. That’s ₹7 lakh in total, but only ₹5 lakh is insured, leaving ₹2 lakh uninsured.
Two different branches of the same bank. Having ₹3 lakh at each branch doesn’t help. They’re added together to make ₹6 lakh, and ₹5 lakh is insured.
Two different banks. With ₹3 lakh at Bank A and ₹4 lakh at Bank B, the whole ₹7 lakh is insured, because each bank has a separate limit.
Interest counts towards the limit. With ₹4,90,000 in a deposit and ₹15,000 of interest due, you hold ₹5,05,000. The insured amount is ₹5,00,000.
A loan at the same bank. Banks can set off what you owe against your deposits as of the cut-off date. If you’ve ₹3 lakh deposited and owe the bank ₹1 lakh, the insurance applies to the remaining ₹2 lakh.
Joint accounts and different capacities
“Same right and capacity” is the phrase to understand here. Money you hold in your own name is pooled together. Money you hold in a different capacity gets separate cover.
| How the deposit is held | Treatment |
|---|---|
| Savings and FD in your sole name, same bank | Added together, one ₹5 lakh limit |
| Joint account with A and B in that order, and another with the same names in the same order | Added together, one limit |
| Joint accounts with names in a different order (A and B, then B and A) | Treated as separate, per DICGC’s guidelines |
| Joint account with a different person | Treated as separate |
| Deposit held as a partner or trustee | Treated as a different capacity, with separate cover |
These details can be confusing, and rearranging names doesn’t make a poor plan safe. Ask the bank or read DICGC’s own FAQ if a lot of money depends on the answer.
What is and isn’t protected
Covered: savings, fixed, current and recurring deposits at insured banks. That includes commercial banks, branches of foreign banks operating in India, local area banks, regional rural banks and co-operative banks.
Not covered:
- deposits of foreign, central and state governments
- inter-bank deposits
- deposits received outside India
- deposits at primary co-operative societies
- anything above the limit
- non-deposit products, including mutual funds, shares and insurance policies, even if sold at a bank branch
Company and NBFC deposits are outside the scheme as well, since it applies to insured banks.
DICGC also doesn’t step in when a scammer empties your account. For that, read how to stay safe from UPI fraud and report it straight away to your bank and on 1930.
How and when you would get paid
You usually don’t file a claim with DICGC yourself. The route depends on what’s happened to the bank. These are the timelines as of November 2026:
| Event | What’s supposed to happen |
|---|---|
| RBI’s All-Inclusive Directions on the bank | The bank gives its depositor list within 45 days, DICGC verifies within 30 days and pays within 15 days after that. The total should not exceed 90 days |
| Bank goes into liquidation | The liquidator sends a claim list. DICGC pays the liquidator within two months of receiving it, and the liquidator pays depositors |
| Reconstruction or merger | DICGC pays the bank within two months of receiving the claim list |
During this time, keep your passbook, FD receipts and statements safely, and make sure your KYC and contact details with the bank are up to date. Reply promptly to any official communication, and check that it’s genuine. DICGC or a bank’s official won’t need your OTP or PIN, so anyone asking for these is a fraudster.
How to check your bank
Three quick ways:
- Look for the DICGC leaflet that insured banks are required to display.
- Ask a branch official.
- Check the List of Insured Banks on dicgc.org.in.
What to do with this knowledge
If your total deposits at any one bank are well under ₹5 lakh, this probably needs little more of your attention. If you hold more than that, consider these questions, rather than simply reacting to any one headline:
- How much of your money sits above the limit at each bank, once interest is included?
- Could you split it across more than one insured bank without losing track of it, and without paying penalties?
- Does your family know where each account is, and have you added nominees?
Each extra account can bring its own minimum balance charges, so include that in your thinking. Our guide on fixed deposits vs savings accounts explains how both fit together, and insurance treats them the same way.
Bottom line
Think of ₹5 lakh as a limit per person, per bank, with interest included. It’s a real protection, but only for bank deposits and only up to that limit. Check that your bank is on the list, keep your records current, and look again at DICGC’s site for any change to the limit.
Frequently asked questions
Does the ₹5 lakh limit apply per account or per bank?
Per depositor, per bank, for deposits held in the same right and capacity. All your accounts at one bank, in all its branches, are added together. Deposits at different banks are insured separately.
Do I have to pay for DICGC insurance?
No. The insured bank pays the premium, and you cannot be charged for it. You don't need to apply either, since cover is automatic for eligible deposits at insured banks.
Does DICGC cover money lost to UPI or online fraud?
No. DICGC insurance is about a bank's failure or restrictions on it. It does not pay for scams or fraud on your account. For those, report to your bank and on the 1930 helpline, and see RBI's rules on customer liability.
Are co-operative bank deposits covered?
Co-operative banks are insured by DICGC. Primary co-operative societies are not, even if people locally call them banks. Check the list of insured banks on the DICGC website if you're unsure about an institution.
