How Safe Are Your Fixed Deposits?

By | January 9, 2018

An overview of measures such as deposit insurance, which have been taken by the Reserve Bank of India (RBI) to protect Fixed Deposits.

Indians, in general, are known as people who like to put a portion of their earnings into savings and many of us opt to take the Fixed Deposit route to secure and earn on our savings. Fixed Deposits are generally considered to be fairly low-risk investments and people rarely have major concerns about getting their money back from the bank. All the same, what if something were to happen to the bank? It could close or have its license cancelled, or be liquidated. What would happen to your Fixed Deposit then?

Here are a few Fixed Deposit facts to help allay your fears.

Don’t Worry, Your Deposits Are Safe

That’s right! Effective regulation by the Reserve Bank of India (RBI) has ensured that your deposits are safe. The RBI has made Deposit Insurance compulsory for all banks and no bank can withdraw from it.

What Does This Mean?

This means that no matter what happens to your bank, whether it closes down, is liquidated, undergoes a reconstruction or amalgamation or is merged with another back, your money is still protected. Each depositor is insured for up to Rs. 1 Lakh for Savings, Fixed, Current and Recurring Deposits and this includes both the principle and the interest amount accrued.

Are Public Sector Banks Safer Than Private Sector Ones?

All banks in India, whether Public, Private, Co-operative or Foreign Banks (with branches in India), are covered by the Deposit Insurance. Given this, no one bank is safer than another.

What Happens If You Have More Than Rs. 1 Lakh Worth of Deposits?

The limit for the sum of the deposit insured is Rs. 1 lakh per person for any given bank. Even if you have your deposits in different branches of the same bank, they will be aggregated for the purpose of the insurance cover, which will only extend up to this amount (Rs. 1 lakh).

However, to protect yourself better, you can increase your Deposit Insurance cover by depositing your money in different banks. As long as the deposits are in separate banks, the Deposit Insurance will apply separately.

So, if you were ever worried that your money was at risk, you can rest easy because the RBI has you covered.

AND if you’re now looking for more banks to diversify your deposits, all you have to do is hit the button below and we’ll help you out!

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8 thoughts on “How Safe Are Your Fixed Deposits?

      1. Ayshwarya

        Ayshwarya Syndicate Souharda Credit Co-Operative Ltd

        Thenis it possible to give 18% on FD?? because the company is providing the same rate

        1. Team BankBazaar

          Hi Ayshwarya, Bank FDs rates currently hover around the 6% mark while company deposits are offering 10%. You will have to check if the organisation is a genuine one and whether it is safe to invest in deposits offered by this company. We suggest that you speak to other depositors as well before you invest. Cheers, Team BankBazaar

  1. Thomas

    Thats not safe at all, thats just rubbish. 1 lac cover is as good as nothing. Banks in UK cover their consumers upto GBP 85000.

    1. Team BankBazaar

      Hi Thomas,

      Thanks for writing in. We hear you, but unfortunately that’s the way things are.

      Team BankBazaar

  2. AHAD

    It’s a useless insurance coverage what will we do of that Rs. 1lac if i had invested Rs,50 lacs in FD

    1. Team BankBazaar

      Hi AHAD,

      So sorry you feel this way. However, this is how most banks function.

      Team BankBazaar


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