DICGC: Everything you need to know about savings account deposit insurance

DICGC Everything you need to know about savings account deposit insurance

As a person who saves money, you may be concerned about your money’s safety in your savings account. There is always a chance of a bank failure or bankruptcy, and if that happens you might lose your hard-earned money. So, how to secure it?

This is where the Deposit Insurance and Credit Guarantee Corporation (DICGC) comes in. In India, the DICGC provides insurance for bank deposits, including savings accounts. Here’s everything you need to know about savings account deposit insurance and how DICGC works.

What is DICGC?

The Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of the Reserve Bank of India (RBI). It was established in 1978 and provides deposit insurance to Indian bank account holders.

Deposit insurance is a form of protection for depositors in case a bank goes bankrupt. This insurance coverage is applicable to all deposit accounts, including savings accounts, current accounts, and fixed deposits. DICGC provides insurance to accounts held with all commercial banks, regional rural banks, and cooperative banks registered with the RBI.

What is the coverage limit?

DICGC provides deposit insurance of up to Rs 5 lakh per depositor per bank. The insurance coverage limit applies to the sum of all deposits held by a depositor in the same bank. Say you have multiple deposit accounts in the same bank. In that case, the insurance coverage limit will apply to the total of all the deposits. However, the coverage limit does not apply to deposits held in different banks.

It is important to note that the insurance coverage limit applies to the principal amount and the interest earned on the deposit. For instance, if you have a savings account with a balance of Rs 3.5 lakh, and the bank pays interest of Rs 20,000, the total insurance coverage limit of Rs 5 lakh will include both the principal and interest, which in this case is Rs 3.7 lakh. 

How does DICGC work?

DICGC provides deposit insurance to banks by charging a premium. The premium rate is currently set at 0.05% of the deposits held by the bank. Banks are required to pay this premium to DICGC every year.

If a bank fails, DICGC will step in and pay the insured amount to the depositors. The payment is made to the depositors’ accounts in the same or another bank, as per the depositor’s choice. The insured amount is typically paid within two months of the bank’s failure, though it can take longer.

It is important to note that DICGC will only pay the insured amount. If a depositor has more than Rs 5 lakh in deposits in the failed bank, the insurance will not cover the excess amount.

How to check if DICGC insures your bank?

All banks that DICGC insurers are required to display the DICGC logo at their branches. The logo indicates that DICGC insures the bank and that the depositors are eligible for deposit insurance.

You can search for your bank and confirm whether it is insured by DICGC. You can also check if DICGC insures your bank by visiting the RBI’s website.


Overall, DICGC provides an essential service to depositors in India and helps to instil confidence in the banking system. However, it is always good practice to keep track of your deposits and ensure that you do not exceed the Rs 5 lakhs limit in any single bank.