Fixed Deposit Insurance

Fixed Deposits, or FDs, are one of the few traditional investment options helping an individual make a safe investment. IT is a risk-free investment with guaranteed returns. FDs offer interest rates of up to 5-7%, thus beating inflation which is currently at 5.1%. However, as the safety of money cannot be negotiated, a lot of investors wonder if fixed deposits are insured. So, let us deep dive into the topic.

Are Fixed Deposits Insured?

The only risk that follows with fixed deposit investments is the bank going bankrupt or defaulting. For such extreme situations, each depositor is insured up to a maximum of ₹5 lakh (for both principal and interest). In case you have multiple fixed deposits with several banks, the insurance coverage cap is separately applied to the amount in every bank.

What Does the DICGC Insure?

The Deposit Insurance and Credit Guarantee Corporation (DICGC) offers insurance cover on deposits such as savings accounts, fixed deposits, current accounts, recurring deposits (RD), etc. As per the latest developments, the DICGC now insures principal and interest up to a maximum amount of ₹5 lakh. For instance, if an individual had an account with a principal amount of ₹4,95,000 plus accrued interest of ₹4,000, the total amount insured by the DICGC would be ₹4,99,000.


All funds held under a given name/ownership type in the same bank are combined together before the deposit insurance is decided. If the deposits are in different names/ownership or are deposited in different banks, they would be insured separately.


The DICGC insures all banks, including local area banks, regional rural banks and branches of foreign banks that function in India. However, there are certain exceptions.


The following are the types of deposits that are not insured by the DICGC:

  • Deposits of state/central governments

  • Inter-bank deposits

  • State land development banks with the state co-operative bank deposits

  • Any deposits that are received outside of India

  • Deposits of foreign governments

  • Any amount that has been exempt specifically by the corporation with the earlier approval of the RBI 

DICGC Rules for FD Insurance

For FD insurance to work, the DICGC has a certain set of rules:

  • Banks must pay a premium for the insurance cover; meaning that the DICGC does not charge any premium from bank depositors/FD account owners.

  • The ₹5 lakh limit covers both the principal and interest amounts.

  • A depositor can only receive the insurance cover on liquidation of the bank. Fixed Deposit insurance cannot be provided if the bank is functional.

  • If a user has multiple fixed deposits in various branches of a single bank, and the bank's failure is declared, all deposits with the institution will be clubbed. It means that the depositor will be paid a maximum of up to ₹5 lakh and nothing more.

  • If you have multiple fixed deposits in different banks, the deposits maintained with different banks are not clubbed.


The investment journey requires a lot of planning and understanding of the market, especially when you have to tackle inflation and unpredictable market movements. Every investor is looking for the best schemes to invest their money securely. This is why, in February 2020, the sum insured under the DICGC was increased from ₹1 lakh to a maximum of ₹5 lakh. Investing in fixed deposits is much safer now than ever before. While your money is safely invested, you can get better returns with appealing interest rates from Bajaj Finance Fixed Deposit schemes. The minimum deposit amount on Bajaj Finance FD starts from ₹15,000.  Apply on Bajaj Markets today!


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Frequently Asked Questions on FD Insurance

Is there any insurance on FD?

Yes, there is fixed deposit insurance on fixed deposits that are invested in banks.

Is FD insured in India?

Your fixed deposit investment with a bank is insured with the DICGC scheme, which covers your deposits up to Rs.5 lakhs.

What is the difference between FD and life insurance?

Life insurance and FDs are common investment avenues that help you with securing your finances. You can purchase life insurance only from an insurance provider whereas in the case of FDs, you can invest in fixed deposits with NBFCs, banks and other financial entities. The fundamental difference between them is that fixed deposit is an investment whereas life insurance is a risk cover.

Does DICGC insure Corporate FD?

The DICGC only insures deposits made in banks. It does not insure deposits that are made in NBFCs.

Will DICGC insure my Fixed Deposit if I have FDs in different banks?

All of the deposits that you make in the bank are insured up to Rs.5 lakhs. Likewise, if you also invest with another bank, that amount will also be separately covered.

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