Most people consider their bank fixed deposits extremely safe but some recent events in Cyprus (an euro zone country) bust this myth of safety of bank deposits. The Cyprus government has decided to use the depositors’ money in bank account to pay off its debts. Deposits greater than €100,000 were frozen by the government but deposits of up to €100,000 remain protected. This is because deposits in banks up to €100,000 is insured while above €100,000 are uninsured. So the deposit that is insured would be untouched.
If such a thing can happen in Cyprus, the question is can it happen in India and how safe is your deposit with banks?
Given the above situation, you should be careful about choosing your bank.
So to be on the safer side, you should diversify your deposits in different banks and bank mainly with bigger well known banks.
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If I want to invest a money on somebodys elses behalf,for a period of 10 years, which would be safest bank. and what would be interest rate.As It would be my responsibility.What is the best procedure to work this out.
Is it possible to take an insurance for an amount greater than 1 lac.Pl. let me know.
The safest bank would be big Government Banks like SBI, PNB, BoB etc. Also big private banks like ICICI and HDFC bank are too big to fail. You cannot take additional insurance for deposit of more than 1 Lakh. We have comparison of interest rates across major banks here.
Fd in uco, Allah a bad or Andhra bank which one is safer
All 3 are Government Banks and all three are equally safe.
Very nice article Amit. Keep up the Good work. God Bless You
How we can rate the performance of a cooperative scheduled bank. Is it safe to have fixed deposits in NKGSB cooperative multistate scheduled bank. Pl. reply.
@Rajiv that's a thought provoking question as I have never dealt with co-operative banks personally. I would recommend to keep not more than Rs 1 lakh in co-operative banks until there are compulsions. But if you ask me to rate, I am not aware how to do it.
I would be good if I see no news of warning/caution by RBI or fraud happening in the bank.
Though frauds also happen in bigger banks like Bank of Baroda recently, but they don't impact bigger banks much. For smaller bank it can impact the operations to a large extent!
I am aware of the fact that Fixed Deposits in India are RBI insured for 1 lakh Rupees. Does that mean if I deposit 20 Lakhs in a bank and if that bank goes bankrupt, I will get 1 Lakh back??
Assume that I have 20 lakhs in hand where do you think I can go and deposit?
Yes your interpretation is right. But as I said in the post most of bigger private banks and all of Govt owned banks are safe!
Is It Safe option to do fixed Deposit in Canara Bank India? if not than please kindly describe briefly ...
Thanks in Adv
Is It regulated by RBI ?
All the banks in India are regulated by RBI. Canara bank is a Govt of India owned bank and 100% safe. Go ahead with your deposits with them.
Nice information and very timely
Term Deposits and fixed deposit are the same thing with two different name :)