Fixed deposit is one of the safest investment avenues present in India. It is accessible by anyone and everyone irrespective of their financial status, caste, and position in the society. The only condition is, you need to have a bank account and the money to deposit. The best part about FD is, the invested principal is highly safe compared to the money invested in market-linked securities. Plus, investing in the right place such as Bajaj Finance FD which offers a whopping ROI of 8.40% per annum can help you earn more than your expectations. However, a series of events like the PNB scam by Nirav Modi and Mehul Choksi have put the customers in serious doubts about the security of their investment. The biggest question in the present scenario that needs to be answered is, what happens to FD investment if a bank fails or goes bankrupt? Generally, when a private bank goes bankrupt, it is taken over by other larger banks in the private sector. But what if that doesn’t happen? What happens to the investor’s money? Before we answer the endless list of questions, let us talk about the common reasons for the failure of banks.
If a bank is declared bankrupt by the concerned authorities and no other organization takes over, the money invested in FD with that particular bank is paid back to the respective customers by the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, the refund is capped at Rs 1 lakh. This means, if you have an FD whose maturity value is 1 lakh 10 thousand, the DICGC will only pay you Rs 1 lakh. Nothing more than that no matter what you invested.
4 Comments
9/19/2023 09:44:35 am
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About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
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