Negative impactEconomy
Have more than ₹5 lakh in one bank FD? Sanjay Kathuria warns of a hidden risk and reveals how to shield your money
Mint 1 hr ago·7 Sept 2026, 1:10 pm
A major risk for investors with large Fixed Deposit (FD) portfolios is the concentration of funds in a single bank. While FDs are considered safe, the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides coverage for only up to ₹5 lakh per depositor per bank. This limit applies to the total amount held, including the principal and accrued interest. If an investor has more than ₹5 lakh in one bank, the amount exceeding this cap is not insured and could be at risk if the bank faces financial trouble.
This scenario matters because it can significantly impact the safety of your savings. To protect your capital, it is advisable to diversify your FD investments across multiple banks. By keeping the amount in each bank within the ₹5 lakh limit, you ensure that your total savings are fully covered by insurance. This strategy minimizes the impact of any potential banking issues and safeguards your hard-earned money.
Investors should regularly review their FD holdings to ensure they are not overexposed to a single institution. If you have a large sum in one bank, consider shifting the excess to another bank that is also insured. This simple step can provide peace of mind and ensure that your investments remain secure under the DICGC scheme.
Key takeaways
- Category: Economy.
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