If you think that every rupee deposited in a bank is completely safe, then think again. Even if your savings account is protected, there is a limit behind it—and this limit can be very important to you.

In 2020, the government made a major change for bank account holders, which is important for every depositor to know today. Only the amount deposited in the bank up to ₹5 lakh is considered fully safe. This means that if a bank ever collapses or becomes insolvent, there is no guarantee that the account holder will get back more than ₹5 lakh.

What is the limit of deposit insurance?

Finance Minister Nirmala Sitharaman had announced in Budget 2020 that the deposit insurance limit has been increased from ₹1 lakh to ₹5 lakh. This facility comes under DICGC (Deposit Insurance and Credit Guarantee Corporation), which guarantees the security of deposits in banks up to a certain limit. This insurance cover is applicable to all bank savings accounts, current accounts, FDs and RDs. But remember, this limit of ₹5 lakh is applicable on a per person per bank basis. Even if you have deposited a total of ₹ 10 lakh in separate accounts in the same bank, only ₹ 5 lakh will be protected in case of drowning.

When and how will you get the money?

If a bank goes bankrupt or is suspended, the sum assured is given to the account holder within 90 days as per DICGC rules. This process has become much faster and transparent than before.

How to save your entire accumulated capital?

The banking system in India is strong, but not completely immune to risk. If you have more than ₹5 lakh, then splitting it into different banks can be a wise move. This gives you protection of ₹5 lakh separately for each bank.

PC:Punjab Kesari