FDIC vs DICGC: Deposit Insurance in India & the US

When PMC Bank was frozen in September 2019, roughly 9 lakh depositors found they could not touch their own money, and the most anyone was then guaranteed to get back was ₹1 lakh. Within months, India raised the figure to ₹5 lakh. The US did the same thing a decade earlier: as Lehman Brothers collapsed in 2008, Washington lifted federal deposit cover from $100,000 to $250,000 almost overnight. Both jumps followed the same script, a high-profile bank failure exposing how thin the guarantee actually was, then a fast political fix.

The two schemes behind those guarantees are DICGC in India and FDIC in the US. This guide explains what each one actually is, exactly how much of your money is protected and under what rules, the parts almost every other page leaves out (the DICGC premium, the 90-day payout, the FDIC-vs-NCUA-vs-SIPC split), and the one misconception that costs Indian savers the most: that every "fixed deposit" is insured. India comes first here, then the US.

What are FDIC and DICGC?

FDIC and DICGC are national deposit-insurance schemes that repay your bank balance, up to a set limit, if the bank fails. They exist because a bank lends out most of the money you deposit, so a run or a collapse could otherwise wipe out ordinary savers who did nothing wrong.

DICGC is the Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the Reserve Bank of India, set up on 15 July 1978 by merging the Deposit Insurance Corporation of 1962 with the Credit Guarantee Corporation of India of 1971. It insures deposits at banks in India up to ₹5 lakh per depositor per bank. As of September 2024, DICGC covered ₹96.7 trillion of insured deposits, and about 97.7% of all deposit accounts in India were fully insured, per the RBI, because most people hold well under the cap.

FDIC is the Federal Deposit Insurance Corporation, a US government agency created by the Banking Act of 1933 during the Depression, which insures deposits at member banks up to $250,000 per depositor, per bank, per ownership category. Its record is the line every American bank quotes: since 1933, across thousands of bank failures, no depositor has ever lost a single dollar of FDIC-insured money.

FDIC vs DICGC at a glance

The two systems share the same core idea (a per-depositor, per-bank guarantee funded by the banks), but differ sharply on the limit, the ownership-category rule, and how fast you get paid. This is the comparison neither a US page nor an Indian page usually gives you, because each covers only its own scheme.

Feature	DICGC (India)	FDIC (US)
Cover limit	₹5 lakh per depositor per bank	$250,000 per depositor per bank per ownership category
Interest included?	Yes, principal plus interest combined	Yes, principal plus interest up to the limit
Ownership-category multiplier	No, one ₹5 lakh limit per bank	Yes, each category gets its own $250,000
Who pays the premium	The bank (12 paise per ₹100 a year)	The bank (risk-based premium)
Established	15 July 1978 (RBI subsidiary)	16 June 1933 (Banking Act)
Deposits covered	Savings, current, FD, recurring	Checking, savings, money market, CDs
Not covered	NBFC and company FDs, govt and inter-bank deposits	Stocks, bonds, mutual funds, annuities, crypto
Payout speed	Up to ₹5 lakh within 90 days (2021 Act)	Usually within days of the bank failing

The single biggest practical difference is the ownership-category rule. India applies one flat ₹5 lakh to everything you hold at a bank in the same capacity; the US lets the same person multiply $250,000 across single, joint, retirement, and trust accounts at one bank. More on both below.

How much does DICGC insure?

DICGC insures up to ₹5 lakh per depositor per bank, and that figure covers your principal and interest together, not separately. The limit is per depositor per bank, so every account you hold at the same bank, across all its branches, is added into a single ₹5 lakh pool.

The ₹5 lakh has applied since 4 February 2020. Before that the cap was ₹1 lakh, and it had stood there since May 1993, so it went 27 years without a rise while prices roughly quadrupled. That is why the PMC freeze hit so hard: a middle-class depositor with ₹8 lakh in a failed bank was guaranteed only ₹1 lakh back.

The interest detail trips people up, and the arithmetic is worth spelling out. If you hold ₹4,95,000 of principal and it has earned ₹4,000 of interest, your ₹4,99,000 is fully covered. But if your principal is already ₹5 lakh, the interest sitting on top of it is not covered, because the principal alone has used up the entire cap. The ₹5 lakh is a ceiling on principal plus interest, not principal with interest added free on top.

Which banks does DICGC cover, and are NBFC FDs safe?

DICGC covers all commercial banks, small finance banks, payments banks, regional rural banks, local area banks, and eligible co-operative banks, but it does not cover NBFC or company fixed deposits at all. This is the misconception that quietly costs Indian savers the most.

A fixed deposit with a bank (SBI, HDFC, a small finance bank, a co-operative bank) is DICGC-insured to ₹5 lakh. A "fixed deposit" with a non-banking finance company or a manufacturer, a Bajaj Finance FD, a Shriram FD, a corporate FD, carries zero DICGC cover. That higher interest rate the corporate FD advertises is partly the price of that missing safety net. The DICGC guarantee follows the banking licence, and NBFCs do not hold one. Primary co-operative societies are also excluded, which is different from co-operative banks, which are covered.

Payments banks are covered too, worth knowing if you keep money in IPPB, Airtel Payments Bank, or the old Paytm Payments Bank balance, since those are DICGC-insured up to the same ₹5 lakh.

Who pays for DICGC insurance, and how fast is the payout?

The bank pays the DICGC premium, currently 12 paise per ₹100 of deposits a year, and the depositor pays nothing. Almost no Indian finance page states this number, but it matters: your cover is genuinely free to you, funded by a 0.12% levy the bank pays half-yearly in advance (raised from 10 paise in April 2020). A bank cannot opt out while it holds a licence, and it cannot bill you a separate "deposit insurance" charge.

On speed, the rules changed for the better in 2021. Under the DICGC (Amendment) Act, in force from 1 September 2021, depositors of a bank placed under an RBI moratorium or All-Inclusive Directions get up to ₹5 lakh within 90 days, without waiting for the bank to be wound up. The mechanics run 45 plus 30 plus 15: the bank submits the depositor list in the first 45 days, DICGC verifies it over the next 30, and pays within 15 days of verifying. That provision exists because of PMC (2019), Yes Bank (2020), and Lakshmi Vilas Bank (2020), where depositors were stuck for months. In an old-style full liquidation, DICGC still pays within two months of the liquidator's claim list.

How can a family in India insure more than ₹5 lakh?

A family can insure well above ₹5 lakh by holding deposits in different capacities and across different banks, because each capacity and each bank gets its own separate ₹5 lakh. The cover is per depositor per bank in a given right and capacity, and that phrasing is the key.

Different capacities each count separately at the same bank. An account you hold alone, an account you hold jointly with a spouse, an account where you are the guardian of a minor, and one where you are a trustee are four different capacities, each insured to ₹5 lakh. Joint accounts in a different name order (A and B versus B and A) also count as separate capacities. And deposits at a different bank are always insured afresh, so ₹5 lakh at each of three banks means ₹15 lakh of cover. This is factual structure, not a recommendation on where to keep your money; a qualified adviser can help with a large balance.

How much does the FDIC insure?

The FDIC insures $250,000 per depositor, per insured bank, per ownership category, which is what lets a single household protect far more than $250,000 at one bank. The per-category rule is the heart of it, and it is where the US system is more generous than India's flat limit.

There are seven ownership categories, and each one gets its own $250,000 at the same bank: single accounts, joint accounts, certain retirement accounts (IRAs), trust accounts, employee benefit plans, corporation or partnership accounts, and government accounts. A married couple can therefore insure $1,000,000 at a single bank without splitting anything across institutions:

• Spouse A single account: $250,000
• Spouse B single account: $250,000
• Joint account owned by both: $500,000 ($250,000 per co-owner)

Add an IRA for each spouse and the same bank covers more still. A newer wrinkle, effective 1 April 2024, simplified trust coverage: a trust owner with five or more beneficiaries is now capped at $1,250,000 per owner across all trust accounts at one bank. To check a bank or estimate your own coverage, the FDIC runs two free tools, BankFind for whether a bank is insured, and EDIE, the Electronic Deposit Insurance Estimator, for the math.

What do FDIC and DICGC not cover?

Neither scheme covers investment products, only deposits, so the money you invest through a bank is not insured even though your savings account is. This is the distinction that catches people who assume "my bank is insured" means everything at the bank is safe.

The FDIC does not cover stocks, bonds, mutual funds, annuities, life insurance, crypto assets, safe-deposit-box contents, or US Treasury securities (Treasuries are backed directly by the US government, which is arguably safer still). DICGC does not cover deposits of foreign or Indian governments, inter-bank deposits, deposits held at overseas branches, or any amount the RBI exempts, and, as above, no NBFC or company FDs. In both countries the rule is the same: a bank deposit is insured; a security bought through that bank is not.

One honest caveat on the US side. In March 2023, when Silicon Valley Bank and Signature Bank failed with roughly 88% to 90% of their deposits above the $250,000 limit, regulators invoked a systemic-risk exception and made all depositors whole, insured or not. That was an emergency call, not the normal rule, and it is not something a depositor can count on. The reliable guarantee is still $250,000 per category.

FDIC vs NCUA vs SIPC

FDIC insures bank deposits, NCUA insures credit-union deposits, and SIPC protects brokerage accounts, and confusing them is common because all three sound like they do the same thing. They do not. This table is the one almost no US page puts in a single place.

	FDIC	NCUA	SIPC
Protects	Bank deposits	Credit-union deposits	Brokerage securities and cash
Limit	$250,000 per depositor, bank, category	$250,000 per member, credit union, category	$500,000 per customer (incl. $250,000 cash)
Covers loss from	Bank failure	Credit-union failure	Brokerage failure, not market losses
Government-backed	Yes	Yes	No, industry-funded

The one to be careful with is SIPC. It does not protect you from your investments losing value, only from your brokerage going bust and your securities going missing. India has no exact SIPC equivalent; investor protection there runs through SEBI and the stock-exchange investor protection funds instead.

What this guide does not cover

This guide explains how DICGC and FDIC deposit insurance work; it is not advice on where to keep your money or how to structure a large balance. It does not rank banks, recommend spreading deposits in any particular way, or cover the credit-guarantee side of DICGC's older mandate. Deposit-structuring decisions for balances above the limits, and any tax on the interest, are worth checking with a qualified professional. For the accounts these guarantees sit on, see our guides to the savings account, the checking account, and FD versus CD.

Frequently asked questions

What is the full form of DICGC? DICGC is the Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the Reserve Bank of India set up on 15 July 1978. It was formed by merging the Deposit Insurance Corporation (1962) with the Credit Guarantee Corporation of India (1971). Its job is to insure deposits held at banks in India, so that if a bank fails, depositors are repaid up to ₹5 lakh per bank. The cover is automatic; you do not apply for it or pay for it.

How much money is insured under DICGC? DICGC insures up to ₹5 lakh per depositor per bank, and that ₹5 lakh covers principal and interest together. The limit was raised from ₹1 lakh to ₹5 lakh on 4 February 2020, the first increase since ₹1 lakh took effect in May 1993. It is per bank, not per branch, so all your accounts across every branch of the same bank are added together and insured up to one ₹5 lakh. If your principal is ₹4,95,000 and interest is ₹4,000, the full ₹4,99,000 is covered; if your principal is already ₹5 lakh, any interest above it is not.

Which banks are covered by DICGC, and are NBFC fixed deposits covered? DICGC covers all commercial banks (including branches of foreign banks in India), small finance banks, payments banks, regional rural banks, local area banks, and eligible co-operative banks. It does not cover primary co-operative societies. Crucially, NBFC and company fixed deposits are not covered by DICGC at all: a corporate FD with Bajaj Finance, Shriram, or a manufacturing company carries no deposit-insurance cover, which is the single biggest reason those FDs pay higher rates. If deposit safety is the priority, the DICGC label only applies to banks.

Who pays for DICGC insurance? The bank pays for DICGC insurance, not the depositor. The premium is currently 12 paise per ₹100 of assessable deposits per year (0.12%), raised from 10 paise effective April 2020, and the bank pays it half-yearly in advance. As a depositor you pay nothing and the cover is automatic on every eligible deposit. A bank cannot opt out of DICGC cover while it holds a banking licence, and it is not allowed to pass the premium on to you as a separate charge.

How long does a DICGC payout take? Since the DICGC (Amendment) Act came into force on 1 September 2021, depositors of a bank placed under RBI moratorium or All-Inclusive Directions get up to ₹5 lakh within 90 days, without waiting for the bank to be liquidated. The bank submits the depositor list in the first 45 days, DICGC verifies it over the next 30 days, and pays within 15 days of verification. This provision was created after the PMC Bank (2019), Yes Bank (2020), and Lakshmi Vilas Bank (2020) episodes. In a full liquidation, DICGC pays within two months of receiving the claim list from the liquidator.

How much does the FDIC insure, and is the limit per account or per person? The FDIC insures $250,000 per depositor, per insured bank, per ownership category, not per account. Multiple accounts in the same ownership category at the same bank are added together under one $250,000 limit. But different ownership categories each get their own $250,000, so a married couple can insure $1,000,000 at a single bank: $250,000 in each spouse's single account plus $500,000 in a joint account ($250,000 per co-owner). Coverage is automatic and free at any FDIC-insured bank, and no depositor has lost a penny of FDIC-insured money since the FDIC was created in 1933.

What is the difference between FDIC, NCUA, and SIPC? All three are US protection schemes for different institutions. The FDIC insures deposits at banks up to $250,000 per depositor, per bank, per ownership category. The NCUA insures share deposits at credit unions up to the same $250,000 per member, per credit union, per category. SIPC is different: it protects securities and cash at a failed brokerage up to $500,000 (including a $250,000 cash sublimit), and it does not cover market losses, only the broker going under. FDIC and NCUA are backed by the US government; SIPC is funded by member brokerages.

What types of deposits do FDIC and DICGC not cover? Neither scheme covers investment products, only deposits. FDIC does not cover stocks, bonds, mutual funds, annuities, life insurance, crypto assets, safe-deposit-box contents, or US Treasury securities (those are backed directly by the Treasury). DICGC does not cover deposits of foreign or Indian governments, inter-bank deposits, deposits held abroad, or any amount the RBI specifically exempts, and it does not cover NBFC or company fixed deposits. A mutual fund or stock bought through an FDIC-insured or DICGC-covered bank is not itself insured; only the bank deposit is.

In summary

Deposit insurance is the quiet backstop under every bank balance, and the two systems get you to the same place by slightly different routes. DICGC gives an Indian depositor ₹5 lakh per bank, principal and interest together, funded by a 12-paise-per-₹100 levy the bank pays, with up to ₹5 lakh reaching you within 90 days if the bank is frozen. FDIC gives a US depositor $250,000 per ownership category, which stretches to $1,000,000 for a couple at one bank. Both stop firmly at the door of investment products, and neither touches a mutual fund, a share, or a crypto balance.

The one line to carry away is the one the SERP buries: a corporate or NBFC "fixed deposit" in India is not a bank deposit, so DICGC does not cover it, and the extra interest it pays is partly the price of that gap. Know which of your money sits inside the guarantee and which sits outside it, and you have done the piece of banking hygiene most people never think about until a bank makes the news.

Sources

• Deposit Insurance and Credit Guarantee Corporation, A Guide to Deposit Insurance and FAQs (₹5 lakh limit, premium, coverage), dicgc.org.in
• Reserve Bank of India, DICGC FAQs (per-depositor-per-bank rule, capacity aggregation), rbi.org.in
• DICGC, Section 18A press release, DICGC (Amendment) Act 2021 (90-day interim payout), dicgc.org.in
• US Federal Deposit Insurance Corporation, Deposit Insurance FAQs and Deposits at a Glance ($250,000 limit, ownership categories), fdic.gov
• National Credit Union Administration, Share Insurance Coverage (NCUA $250,000), ncua.gov