Fixed Deposit with Free Insurance Cover
Some banks in India are offering free insurance cover to their customers on opening a fixed deposit (FD) account. In case, you wish to open an FD account you can check whether an insurance cover is being offered by the lender. You can then choose whether you wish to avail a free insurance cover on opening an FD account.
Currently, HFDC Bank and DCB Bank are the two lenders in India who offer insurance cover to their customers looking to open a fixed deposit account.
Details of Fixed Deposits with Insurance Cover Bundled
Terms | HDFC Bank | DCB Bank | |
Name of the FD scheme | SureCover FD | Suraksha FD | |
Minimum and maximum tenure | 1 year - 10 years | 3 years | |
Minimum and maximum deposit amount | Rs.2 lakh - Rs.10 lakh | Rs.10,000 - Rs.50 lakh | |
Rate of interest | Same as interest rates for regular fixed deposits | ||
Eligible groups | Primary fixed deposit account holders | ||
Age of eligibility | 18 years - 50 years | 18 years - 55 years | |
Insurance cover period | 1 year | 3 years | |
Cover amount | Up to Rs.10 lakh | Up to Rs.50 lakh | |
Insurance Company providing insurance | |||
How it works
You can avail of an insurance cover on your fixed deposit scheme wherein case of your untimely death, the cover amount will be paid to the nominee. The cover period for HDFC Bank is for only one year, while for DCB, the cover period is 3 years.
However, in the case of DCB Bank, on making any premature withdrawal, the insurance cover will cease to exist.
Should you opt for Free Insurance Cover?
Depending on your financial requirements and long-term plans you can opt for free insurance cover on opening an FD account. However, it is highly recommended you do not mix your investment and savings goals with your insurance goals and instead keep them separate.
It is always recommended that you opt for an insurance plan which covers you for a longer period of time. Ideally, it should cover you for at least 20-40 years or till the time of your retirement.
Hence, it is recommended that if you wish to protect the future of your loved ones, you opt for a standalone insurance plan while continuing to invest in fixed deposit schemes separately.
FAQs on Fixed Deposit with Free Insurance Cover
- When is DICGS liable to pay?
Within two months of receiving the claim list from the liquidator, the DICGC is liable to pay the amount, even in the case of a merger or amalgamation of banks.
- Can I increase the deposit insurance by depositing funds into different accounts of the same bank?
Yes, the deposit insurance can be increased provided the deposit fund is under different ownerships be it in the same bank or different bank. As the deposit insurance is determined after adding the funds together, so to avail increased deposit insurance the deposit fund must have different owners.
- Can I insure two deposits of present in different banks?
Yes, two deposits present in different banks can be insured. In that case, the deposit insurance limit will be applied separately to each bank.
- Who will pay the cost of deposit insurance?
The insured banks are liable to bear the entire cost of deposit insurance.
- Can the bank deduct the due amount from the deposit insurance in case I have some dues?
Yes, banks will deduct the due amount, in case if any. The dues will be deducted on the cutoff date, after which the deposit insurance will be available.
- To whom is the amount transferred to by DICGC?
The amount is transferred by DICGC to the liquidator who is liable to pay the depositors. In case of merger or amalgamation of banks, then the amount is paid to the transferee bank.
- Is deposit insurance free?
Most of the Indian lenders offer insurance coverage for the fixed deposit. Some banks also offer free insurance coverage for opening fixed deposit accounts to the customers.
- How much fixed deposit is insured?
For both principal and interest amount held by the depositor in the bank, an amount of up to Rs.5 lakh is insured.
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