People usually keep their surplus money in a bank as it is one of the easiest ways to manage your savings. It keeps your money easily accessible when needed. You can use your bank account for daily expenses, bill payments and emergency needs. It also helps you keep track of your spending and savings. Most banks also offer interest on a range of financial products like savings or fixed deposits.
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But how safe it is to put your money in the bank and trust them with keeping it secure. Cybercrimes, internal frauds and many other factors can put your money at risk. In such cases, is there any central provision or law that protects you as a consumer?
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Imagine you decide to keep Rs 10 lakh in a bank account. You can split it across two different accounts or simply keep the entire money in one place. Is the money equally protected in both cases?
Rs 10 Lakh in One Bank
Keeping all your money in a single bank account may not be entirely safe. Under DICGC (Deposit Insurance and Credit Guarantee Corporation) regulations, bank deposits are insured up to Rs 5 lakh per depositor per bank. This limit includes both the principal amount and interest earned.
So, if you have Rs 10 lakh in one bank and the bank fails, only Rs 5 lakh is covered by deposit insurance. This puts your remaining Rs 5 lakh at risk in case of any issues with the bank.
Splitting The Amount
Since the insurance coverage is up to Rs 5 lakh, splitting may make more sense to ensure greater protection. But you must know that this limit applies to all your accounts in the same bank, including savings accounts, FDs and RDs.
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Even having accounts in different branches does not increase the cover. As a result, you can consider spreading your savings across different banks instead of keeping all your money in one bank.
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