Coverage Definition and Applicability

• DICGC insurance covers recurring deposit (RD) accounts maintained with insured banks.
• The insurance protects the depositor’s money in case the bank fails.
• It applies automatically to all eligible RD accounts without separate registration.
• Both public and private sector bank RDs are generally covered.
• Coverage does not extend to non-bank financial institutions or cooperatives not insured.

Insurance Limit and Scope

• The maximum insurance amount is ₹5 lakh per depositor per bank.
• This limit includes both principal and interest on the RD.
• The limit is cumulative across all deposit accounts in one bank.
• If the RD is held in joint names, each holder receives separate coverage.
• Amounts beyond ₹5 lakh are not protected under this scheme.

Eligible Deposit Types

• Recurring deposits are explicitly listed as eligible for coverage.
• Savings, current, fixed, and other term deposits are also covered.
• Foreign currency deposits and deposits of foreign governments are not covered.
• Deposits of central or state governments are excluded.
• Deposits kept with branches abroad are not covered under the scheme.

Claim Process and Payout

• In case of bank liquidation, DICGC settles claims through the bank’s liquidator.
• Depositors are not required to file separate claims.
• Claims are generally processed within 90 days of the bank’s failure.
• Payout is made directly to the depositor’s account or as instructed.
• Only deposits up to the insured amount are reimbursed.

Best Practices for Protection

• Keep RD investments within the ₹5 lakh insured limit per bank.
• Spread deposits across multiple banks for higher safety.
• Confirm the bank’s DICGC registration status before opening an RD.
• Maintain updated nominee and contact information with the bank.
• Track interest accruals to avoid breaching the insurance limit.