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What does 'Insurance up to ₹5 lakh under DICGC' mean?


DICGC insurance means that if a bank fails, your cumulative deposits, including principal and accrued interest, are legally protected up to ₹5 lakh by the Reserve Bank of India.

Example

As a wholly-owned subsidiary of the RBI, the Deposit Insurance and Credit Guarantee Corporation (DICGC) applies this limit per depositor, per bank, rather than per individual fixed deposit account. For instance, if you hold three separate FDs totalling ₹6 lakh in one bank, only ₹5 lakh of your aggregated balance is covered. To maximise safety, a practical strategy for managing large corporate or individual cash surpluses is to distribute investments across different scheduled banks, ensuring your total holdings with any single issuer remain comfortably under the ₹5 lakh threshold.
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