Bank Account Insurance: What if you woke up tomorrow morning to the news that the bank where you've deposited your life savings has gone bankrupt? Is your money completely safe? The RBI has given a reassuring but surprising answer to this question. According to the RBI's subsidiary organization, the Deposit Insurance and Credit Guarantee Corporation (DICGC), approximately 97.6% of bank accounts in the country are insured as of March 2025. This means that if a bank fails, most account holders will get their money back.

What's the full calculation behind the ₹5 lakh limit?
According to RBI rules, each account holder is insured for a maximum of ₹5 lakh per bank. This includes your savings account, fixed deposits (FDs), recurring deposits (RDs), and current accounts. It's important to note that the ₹5 lakh limit is per bank. For example, if you have ₹10 lakh deposited in an account and the bank fails, you will only receive ₹5 lakh. The remaining ₹5 lakh will be outside the scope of the insurance.

A warning sign for the wealthy?
An interesting statistic has emerged from the report. Although 97.6% of accounts are insured, when it comes to the total deposit amount, only 41.5% of the money is actually safe. In simpler terms, this means that the money of small depositors is safe, but a large portion of the money in accounts with large deposits remains at risk.

RBI is working for your safety
The good news is that the DICGC's insurance fund has increased by 15.2% to ₹2.29 lakh crore, which is more than sufficient to handle any crisis. In addition, the RBI has also approved a new risk-based deposit insurance framework from December 2025, which will further strengthen banks.

You can trust your country's Reserve Bank; it is constantly working to ensure the safety of your money. However, instead of keeping all your large deposits in a single bank, it might be a wise decision to spread them across different banks.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.