{"id":7043,"date":"2021-06-27T12:45:00","date_gmt":"2021-06-27T07:15:00","guid":{"rendered":"http:\/\/www.apnaplan.com\/?p=7043"},"modified":"2021-06-28T02:42:58","modified_gmt":"2021-06-27T21:12:58","slug":"bank-deposit-insurance","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/bank-deposit-insurance\/","title":{"rendered":"How to increase Bank Deposit Insurance legally to 75 Lakhs?"},"content":{"rendered":"\n
Bank Deposit Insurance<\/strong> – A term not many people know about but comes into play when the bank you have trusted your money with goes belly-up. In the last few years you might have heard about banks closing down and depositors struggling to get their money back. You must read this post, if you bank with any of the co-operative banks in India. <\/p>\n\n\n\n In India, Bank Deposit Insurance is covered by Deposit Insurance and Credit Guarantee Corporation<\/strong> (DICGC<\/a>) which is subsidiary of RBI. This insurance pays back depositors in case the bank goes bankrupt and is restricted by RBI for further operations. In the last few years, you might have heard about Yes Bank, Lakshmi Vilas Bank had to cease operations temporarily (thankfully) until the new management or new bank too it over. Thankfully, most of the losses were borne by shareholders but depositors escaped unhurt (except that they could not get their money back on time). <\/p>\n\n\n\n However depositors of co-operative banks have not been so lucky. You might not have noticed but in the last few years, more than 10 co-operative banks have ceased operation – PMC Bank being the biggest one. Depositors are still struggling to get their money back form these banks. This bank insurance is like the last resort for the depositors and so it’s important you should know about this. We tell you 10 interesting things about bank insurance and how you can increase it legally?<\/p>\n\n\n\n Here is the deposit Insurance over the years:<\/p>\n\n\n\n If you see the above years and amount, it was regularly revised and the amount was upgraded reasonably well. However. the last revision that was done in Budget 2020 was after 27 years. Also the amount or Rs 5 Lakh seems on the lower side.<\/p>\n\n\n\n Most banks today pay interest in the range of 2% to 3% on their savings account. However there are banks who can pay up to 7%. We have compared the interest rate offered by all banks in India across different balances here<\/a>.<\/p><\/div><\/div>\n\n\n\n As per DICGC website, it covers 2,064 banks. This data is as of February 2, 2021. Following is the breakup:<\/p>\n\n\n\n As most insurance products come with lots of terms and conditions, bank deposit insurance is no exception. Following are some of the terms you must understand to get the full advantage.<\/p>\n\n\n\n Understanding 5 Lakh limit:<\/strong> The 5 lakh limit covers all your deposit with the bank in form of savings account, fixed deposit, current account, recurring deposit, etc. and any interest accrued.<\/strong> For e.g. If you have Rs 1,00,000 in your savings account and Rs 4,50,000 in fixed deposit and Rs 40,000 as interest due on your fixed deposit \u2013 you would still get Rs 5 Lakh even though your total amount due was Rs 5.9 lakhs (1,00,000 + 4,50,000 + 40,000).<\/p>\n\n\n\n The Rs 5 lakh deposit insurance covers each bank and it does not treat different branch of the same bank separately.<\/strong> So if you have Fixed deposit of Rs 3,00,000 in SBI, Delhi and Rs 7,00,000 in SBI, Gurgaon \u2013 in case of bank default you would be paid Rs 5 Lakh only \u2013 as the deposit insurance is at bank level and not branch level. In a different scenario if you have Rs 3,00,000 FD with SBI, Delhi and Rs 4,00,000 FD with ICICI bank, Delhi \u2013 in case of both bank defaults \u2013 you would be paid separately for both i.e. Rs 3,00,000 for SBI and Rs 4,00,000 for ICICI.<\/p>\n\n\n\n The amount paid to depositor would be net of any dues payable to the bank.<\/strong> For e.g. as in the case above if you had to pay bank Rs 20,000 personal loan. You would be paid back Rs 1,04,000 \u2013 20,000 = Rs 84,000 only.<\/p>\n\n\n\n The DICGC is liable to pay the insurance amount within two months of receiving the depositors list from the bank.<\/p>\n\n\n\n Fixed Deposit with Banks is one of the most popular and convenient investment option. To help you choose the best, we compare the interest rates on fixed deposit across all major 48 banks in India including government, private, foreign and small financial banks<\/a> in India every month. This may prove to be quite handy for you in choose the Best Bank FD scheme<\/a>.<\/p><\/div><\/div>\n\n\n\n As of today all banks including commercial banks, local area banks, rural banks, foreign bank branches and co-operative banks in India, are covered under this scheme of DICGC<\/strong> except the co-operative banks of Meghalaya, Chandigarh, Lakshadweep and Dadra & Nagar Haveli.<\/p>\n\n\n\n There are some banks which are de-registered. You can get the list on DICGC website. Almost all these banks are co-operative banks which is a huge risk.<\/p>\n\n\n\n The insurance is based on “same right and same capacity”<\/strong> as on the date of bank default.<\/p>\n\n\n\nWhat is Bank Deposit Insurance?<\/h2>\n\n\n\n
Bank Deposit Insurance: Interesting Facts<\/h2>\n\n\n\n
Bank Deposit Insurance Limit Over the Years<\/h2>\n\n\n\n
Which bank pays highest interest on Savings Account?<\/strong><\/h4>
Banks Covered by Deposit Insurance<\/h2>\n\n\n\n
S.No<\/th> Categories<\/th> # Banks<\/th><\/tr><\/thead> 1<\/td> Public Sector Banks<\/td> 12<\/td><\/tr> 2<\/td> Private Sector Banks<\/td> 22<\/td><\/tr> 3<\/td> Foreign Banks<\/td> 46<\/td><\/tr> 4<\/td> Small Finance Banks<\/td> 10<\/td><\/tr> 5<\/td> Payment Banks<\/td> 6<\/td><\/tr> 6<\/td> Regional Rural Banks<\/td> 45<\/td><\/tr> 7<\/td> Local Area Banks<\/td> 2<\/td><\/tr> 8<\/td> State Co-operative banks<\/td> 33<\/td><\/tr> 9<\/td> District Central Co-op banks<\/td> 351<\/td><\/tr> 10<\/td> Urban Co-op banks<\/td> 1537<\/td><\/tr><\/tbody><\/table> What does Deposit Insurance Cover?<\/h2>\n\n\n\n
Get Highest Fixed Deposit Interest Rates<\/strong><\/strong><\/h4>