Maximising Your Insurance Cover On Bank Deposits

Banks have traditionally enjoyed people's trust, especially when it comes to safekeeping their money.

- Naveen Kumar

However, the crisis in the Punjab and Maharashtra Cooperative (PMC) Bank not so long ago, where many depositors with higher fixed deposit (FD) amounts were unable to withdraw their deposits, has come as a shock to many investors. It also exposed the gross inadequacy of the deposit insurance cover of Rs 1 lakh given to each depositor in case of bank failure.

This limit was introduced in 1993 and continued for almost 27 years. Budget 2020 has done damage control by raising the insurance cover to Rs 5 lakh, which came into effect on February 4. It could provide safety to a decent number of people, but may not be sufficient for those with a much higher amount of deposit in bank. We tell you how you can enjoy higher insurance cover on bank deposits.

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