By News Desk 
If you have a savings account, then this information is very important for you. Every bank account allows keeping money up to a certain limit. If you keep more than this limit in the account, then you may have to face financial risk in future.
What is the limit of savings account and why is it necessary?
Insurance protection is available on the amount deposited in bank accounts up to a fixed limit. If for some reason the bank sinks or is put into moratorium, then your deposited money is guaranteed only up to ₹ 5 lakh. More than this amount may be at risk.
What was the rule earlier and what is the change now?
In the year 2020, Finance Minister Nirmala Sitharaman announced in the budget that now the insurance cover on the amount deposited in the bank has been increased from ₹ 1 lakh to ₹ 5 lakh. This security cover comes under DICGC (Deposit Insurance and Credit Guarantee Corporation).
Earlier, protection was available only on an amount of up to ₹ 1 lakh, but now if the bank fails, the account holder can get back an amount of up to ₹ 5 lakh within 90 days.
New rules and benefits of DICGC
If a bank goes bankrupt, the account holder can claim an amount of up to ₹ 5 lakh under the rules of DICGC.
This amount will be combined of all types of deposits including FD, savings account and current account.
The government has imposed this rule on banks to pay 12 paise as premium on every ₹ 100 deposit, so that the account holders get protection.
Understand by example: How much money is safe?
If a person has:
- An FD of ₹5 lakh in the same bank
- And a savings account of ₹3 lakh in the same bank
Then in case of a bank failure, he will get cover for the entire amount of ₹5 lakh only. That is, even if the total amount is ₹8 lakh, only ₹5 lakh will be considered safe.
How to ensure the safety of your money?
Open accounts in different banks so that you can get cover of up to ₹5 lakh from each bank.
Avoid keeping a large amount in a single bank.
Check the status and rating of the bank.
Split deposits between FDs and savings to get maximum insurance benefit.
Conclusion: Be cautious, be safe
Although very few banks have failed in India in the last few decades, it is still important to invest wisely to protect your money. The new rules of DICGC have definitely brought relief to the account holders, but if you have deposited an amount of more than ₹ 5 lakh, then dividing it smartly is the better option.