Understanding DICGC Insurance: Safeguarding Your FD Investments
Disclaimer: This blog is generic in nature. Ujjivan Small Finance Bank does not take any responsibility for the accuracy of the information provided herein.
September 09, 2025

Fixed Deposits (FDs) have long been a popular investment choice for Indian investors. They offer guaranteed returns and are considered relatively safe. There's a reason why FDs are regarded as comparatively safer than other investment instruments like mutual funds and stocks. Of course, one of the reasons being FDs are not market-linked products. You continue to earn fixed interest even if the market is volatile. However, there's another reason - protection of deposit amount via DICGC insurance.
This article delves into the safety mechanisms protecting your FDs, with a focus on Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance.
The Safety of Fixed Deposits: An Overview
1. Factors Contributing to FD Safety
- Regulatory oversight by the Reserve Bank of India (RBI)
- The bank's financial health and management
- DICGC insurance coverage
While FDs are generally considered safe, it's crucial to understand the protections in place and their limitations.
What is DICGC?
The Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of the Reserve Bank of India. It provides insurance coverage for bank deposits up to ₹5 lakhs per depositor, per bank.
DICGC Insurance Coverage
Key Points
- Coverage limit: ₹5 lakhs per depositor, per bank.
- Covers all commercial banks, including foreign banks operating in India, local area banks, and regional rural banks.
- Includes savings, fixed, current, and recurring deposits.
This insurance is automatic and doesn't require any separate registration.
Scope of DICGC Insurance
What's Covered
- Insures all deposits such as savings, fixed, current, recurring, etc.
What's Not Covered?
- Deposits of foreign Governments
- Deposits of Central/State Governments
- Inter-bank deposits
- Any amount due on account of and deposit received outside India
- Any amount, which has been specifically exempted by the corporation with the previous approval of RBI
- Deposits mobilized by NBFCs
- Deposits of the Land Development Banks with the State co-operative banks.
- Mutual Funds
- Stocks & bonds
- Cryptocurrencies
- Exchange Traded Funds (ETFs)
FD Safety: Beyond DICGC Insurance
While DICGC insurance provides a safety net, the overall safety of fixed deposits depends on several factors:
1. Bank's Financial Health
- Check the bank's Non-Performing Assets (NPA) ratio.
- Assess the bank's capital adequacy ratio.
2. DICGC Claim Process
In the unlikely event of a bank's meltdown, here's how the DICGC claim process works:
- The RBI or the Registrar of Cooperative Societies places the bank under moratorium.
- DICGC is notified.
- The bank submits a claim list to DICGC.
- DICGC pays the claim amount to the bank.
- The bank disburses the amount to depositors.
The DICGC aims to settle claims within 90 days of the bank being placed under moratorium.
Recent Changes Enhancing FD Safety
1. Interim Access to Deposits
As of 2025, the DICGC (Amendment) Act, 2021 allows depositors to access up to ₹5 lakhs of their deposits within 90 days of a bank being placed under moratorium.
2. Increased Coverage
The insurance cover was increased from ₹1 lakh to ₹5 lakhs in 2020, significantly enhancing the safety net for depositors.
Tips for Enhancing Your FD Safety
- Stay within the ₹5 lakh DICGC coverage limit per bank.
- Regularly monitor your bank's financial health.
- Consider government-backed deposit schemes for additional safety.
- Stay informed about regulatory changes affecting deposit insurance.
The Future of Security of FD in India
The Indian banking sector is continuously evolving, with regulators implementing stricter norms to ensure the safety of depositors' funds. Some potential future developments include:
- Further increase in DICGC coverage limits.
- Faster claim settlement processes.
- Enhanced transparency in bank operations.
- Stricter regulations for bank management and operations.
Final Thoughts
Fixed Deposits remain a safe investment option for risk-averse investors, thanks to regulatory oversight and DICGC insurance. However, it's crucial to stay informed and take proactive steps to maximize the safety of your investments.
Looking to grow your savings faster? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.
Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.
Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.
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FAQs
1. Is DICGC insurance applicable to all types of banks?
DICGC covers all commercial banks, including foreign banks operating in India, local area banks, and regional rural banks.
2. What is the due date for a bank to make the premium payment?
Insured banks are given a two-month time period to make premium payment to DICGC on its total deposits.
3. Are NRI deposits covered under DICGC insurance?
Yes, NRI deposits are covered under DICGC insurance, subject to the ₹5 lakh limit.
4. Does DICGC coverage apply separately to each branch of a bank?
The ₹5 lakh coverage is aggregated for all deposits held by a depositor across all branches of a bank.
5. Are corporate fixed deposits covered under DICGC insurance?
Fixed deposits placed with non- banking financial companies (NBFCs) and corporations are not insured under DICGC.
6. How can I check if my bank is covered by DICGC insurance?
All banks licensed by RBI are mandatorily covered under the DICGC insurance scheme.
7. Is the interest accrued on my FD also covered under DICGC insurance?
Yes, both the principal and interest amount (up to the date of bank closure) are covered, subject to the ₹5 lakh limit.
8. What is the email ID of DICGC for premium related queries?
The email ID is ioddicgc@rbi.org.in
9. Can I increase my DICGC coverage by opening multiple accounts in the same bank?
No, the ₹5 lakh limit applies to all deposits held by a depositor in a bank, regardless of the number of accounts.
Yes, deposits in cooperative banks registered with the RBI are covered under DICGC insurance.
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