Most people keep their hard-earned money in the bank. They deposit lakhs of rupees in fixed deposits (FD) and savings accounts, thinking their money is completely safe. But have you ever thought—what will happen if your bank fails or goes bankrupt? Will you get all your money back? This is a truth that many people do not know. Even banks do not give clear information about it. You should know this important fact.

How Much Money Do You Get Back If a Bank Fails?

Most people think their money in the bank is always safe. But if a bank fails or goes bankrupt, you may not get your full money back. As per RBI rules, you get a maximum guarantee of ₹5 lakh only. This includes both your principal amount and interest.

What is DICGC and How Does It Work?

DICGC stands for Deposit Insurance and Credit Guarantee Corporation. It is a company of the Reserve Bank of India (RBI). It gives insurance cover to bank deposits. If the bank fails, DICGC pays the customer. The bank pays the insurance premium, not the customer.

Earlier, the guarantee was only ₹1 lakh. In 2020, the government increased it to ₹5 lakh. This rule applies to all commercial banks, foreign banks (Indian branches), rural banks, and cooperative banks.

What If You Have Accounts in Different Branches of the Same Bank?

This is very important. If you have savings, current, and FD accounts in different branches of the same bank, all your money will be counted together as one deposit. So, even if you have ₹10 lakh in total, you will still get back only ₹5 lakh if the bank fails.

What If You Have Accounts in Different Banks?

The DICGC insurance limit is per person, per bank. This means if you have money in two different banks, you will get ₹5 lakh from each bank.
For example, if you have ₹5 lakh in Bank A and ₹5 lakh in Bank B, and both banks fail, you will get ₹5 lakh each—a total of ₹10 lakh.

Does This Apply to FD, RD, and Savings?

Yes. The ₹5 lakh limit includes all types of deposits in one bank—Savings Account, Current Account, Fixed Deposit (FD), and Recurring Deposit (RD). Even if your total deposit is more than ₹5 lakh, you will only get back ₹5 lakh.

How Long Does It Take to Get the Money Back?

If a bank fails, the process to return money starts quickly. According to rules, the full amount (up to ₹5 lakh) should be returned to the customer within 90 days.

  • In the first 45 days, the bank gives account details to DICGC.
  • In the next 45 days, DICGC returns the money to the customers.