• DICGC Insurance for FD

    Deposit insurance is there to cover a customer’s deposits in a bank. This insurance is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC). DIGC includes various small finance banks as well as commercial public banks.

    DICGC

    Deposit Insurance and Credit Guarantee Corporation, also known as DICGC is Reserve Bank of India’s wholly-owned subsidiary. This corporation was established with the goal of providing deposit insurance as well as to strengthen the credit facilities in India.

    DICGC provides insurance for commercial banks like HDFC or SBI as well as for small finance banks like Suryodaya and Fincare. The corporation provides insurance of up to Rs.5 lakh (principal plus interest) for deposits.

    DICGC insurance covers deposits in:

    • Fixed accounts
    • Savings account
    • Recurring account

    However, the corporation doesn’t insure deposits like:

    • Central/state government deposits
    • Foreign government deposits
    • Deposits with the State Cooperative Bank by the State Land Development Banks
    • Inter-bank deposits
    • Any amount outstanding on account of a deposit made outside of India
    • Any amount that has been specifically exempted by the corporation with the Reserve Bank of India’s prior permission

    How DICGC Works?

    When an insured bank goes bankrupt, the DICGC is held liable. The claim list is provided by the bank to the DICGC. The DICGC pays the total insurance payment to the liquidator within two months of receiving the claim list. Following that, it is the bank's job to disperse the money proportionately to each insured depositor.

    FAQs on DICGC Insurance for FD

    1. Does DICGC insures company/corporate fixed deposits?

      No, the DICGC only insures bank’s deposits. It does not apply to non-banking financial companies (NBFCs).

    2. Will DICGC insure my deposits if I have various FDs in different banks?

      All of your bank deposits are insured up to Rs.5 lakh. Similarly, if you invest in another bank at the same time, that sum will be covered separately.

    3. Is it necessary for me to pay for deposit insurance?

      No, you are not required to pay for deposit insurance. The insured bank is fully responsible for deposit insurance cost.

    4. Is it possible for my bank to opt out of the DICGC’s coverage?

      No, it is not possible for your bank to opt out of the DIGC’s coverage. As the coverage is a requirement, no bank can withdraw from it.

    5. Is deposit insurance also applicable to interest earned on a deposit?

      Yes, both the principal and the interest are covered by DICGC. The combined principal and interest cannot, however, exceed Rs.5 lakh. The interest on the principal will not be covered if the principal itself is Rs.5 lakh.

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