Protect Your Deposits: Nowadays, most people have an account in some bank or the other. All types of transactions are done through that account. Many people also get FD etc. done in the bank. Most people believe that the money deposited in the bank is completely safe. But is it so? If the bank in which you have deposited money sinks or goes bankrupt, what will happen to your money? Will the bank return your entire deposit amount? People are not aware of this and neither do the banks themselves tell anything. Know what are the rules regarding bank deposits and what should be done to keep your deposit capital 100% safe.
Guarantee of only this amount
If the bank defaults in any situation, only the deposit amount of investors up to Rs 5 lakh remains safe. If the bank has more money than this, it will sink. The reason for this is that the 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 of India. This rule has been made to keep your deposited capital safe.
DICGC insures the banks of the country. Its premium is deposited by the bank where the customer has deposited the money. However, this premium is quite 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 Rs 5 lakh. Foreign banks having branches in India also come under its purview.
How to get a 100 percent guarantee of security
If you want to keep a large capital in the bank, then instead of keeping your entire savings in one bank, deposit it little by little in many banks. By this, you can reduce the risk of your investment to a great extent.
Before keeping money in different banks, you have to ensure that you keep only Rs 5 lakh or less in any bank, because if there is any crisis in your investment, then up to Rs 5 lakh will be covered through insurance. This is an effective way to keep your hard-earned money safe.
In which banks will this scheme be applicable
All commercial banks in India (foreign banks, rural banks, cooperative banks) get a guarantee of Rs 5 lakh insurance on deposits. But cooperatives are out of this scope. Keep in mind that DICGC insurance covers both the principal amount and interest of savings accounts as well as fixed deposits, recurring deposits, and current accounts.
It will include both principal and interest. This means that the amount deposited in the bank’s savings account, FD, RD, or any other scheme, all deposits and their interest are added. After this, a maximum amount of Rs 5 lakh is given under the insurance.