2 hrs ago
Sanjay Kathuria Warns of FD Risk Above ₹5 Lakh
Bank fixed deposits are usually considered safe, but they have a protection limit.
If a bank fails, deposit insurance covers up to ₹5 lakh for one person at that bank.
This limit includes the money deposited and the interest earned.
Money in savings, current, fixed and recurring accounts at the same bank is added together.
If the total is more than ₹5 lakh, the extra amount may not be covered by this insurance.
The ₹5 lakh limit applies separately at each bank.
For example, deposits at HDFC Bank and ICICI Bank can each have separate coverage.
Sanjay Kathuria said people should spread large FD amounts across banks and avoid choosing a bank only because it offers a much higher rate.
Deposit insurance protects up to ₹5 lakh per depositor per bank, including principal and interest.
Savings, current, fixed and recurring deposits held at the same bank are combined when applying the ₹5 lakh limit.
Deposits spread across different banks receive separate ₹5 lakh insurance coverage at each bank.
An investor with ₹50 lakh in one bank could have only ₹5 lakh covered if that bank fails.
Sanjay Kathuria advised diversifying large FD holdings instead of chasing unusually high interest rates.
- Who
- Sanjay Kathuria discussed the deposit-insurance risk for FD investors.
- What
- The discussion explained that deposit insurance is capped at ₹5 lakh per depositor per bank and recommended diversification.
- Where
- The issue concerns bank deposits in India.
- When
- The warning was shared in a post on X featuring Kathuria’s appearance on The Ranveer Show podcast.
- Why
- Large deposits in one bank can leave amounts above ₹5 lakh uninsured if the bank fails.
Key facts
- Insurance limit
- Up to ₹5 lakh per depositor per bank.
- Covered amount
- The limit includes both principal and interest.
- Covered deposits
- Savings, fixed, current and recurring deposits.
- Multiple banks
- The ₹5 lakh limit applies separately to each bank.
- Single-bank example
- A ₹50 lakh FD in one bank would not be fully protected under the stated insurance limit.
- Insurance provider
- Deposit insurance is provided by the Deposit Insurance and Credit Guarantee Corporation.
- Suggested strategy
- Kathuria suggested spreading deposits across banks rather than chasing unusually high rates.
Quotes
Sanjay Kathuria
Investor and speaker discussing bank deposit insurance on The Ranveer Show podcast
“35-40 scheduled banks have shut down in India in recent years; Nirmala Sitharaman herself said this. And people still fall for a manager offering 9% when the market rate is 6%, and dump their entire ₹50 lakh into one small bank for that extra 3%.”
livemint.com
“RBI guarantees your FD up to ₹5 lakh, per bank. Put ₹5 lakh in HDFC, ₹5 lakh in ICICI, even if both banks collapse tomorrow, you get both ₹5 lakh back. Not a combined 5, each bank separately.”
livemint.com
Sources
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