Don’t keep your whole money in a single bank
Each depositor in a bank is insured up to a maximum of Rs 1,00,000 (Rupees One Lakh only) including both principal and interest amount in case of liquidation or merger or cancellation of bank’s licence.
So only Rs one lakh of depositor’s money is safe if a bank goes bankrupt or merged or licence cancelled by RBI.
All your deposits, including savings, fixed, current, recurring, etc, are covered for Rs one lakh insurance.
All funds held in the same type of ownership like name, identity details, etc, at the same bank are added together before deposit insurance is determined.
If the funds are in different types of ownership or are deposited into separate banks, they would be separately insured.
Let us understand ownership
If you have 2 SB account , 2 Fixed deposit account in your name then insurance of all these account is up to 1 lac only .
If you have joint account with your spouse then separate insurance cover is available for that account.
If you are maintaining account in 5 different banks then each bank will provide insurance separately .
Insurance is payable by DICGC ( Deposit insurance and credit guarantee corporation ) of Govt of India.
Operational Aspects :
1. Due to connectivity failure bank branch will not assist you in immediate withdrawal so maintain deposit in different banks .
2. Due to technical failure of ATM or internet banking or any other IT services your banking needs can be satisfied by other bank’s IT channel.
3. You will not suffer in case of strike of particular bank .
4. Imposition of certain restrictions on particular bank is another aspect . You will not be in trouble in such cases.
5. In a situation like demonitization you can withdraw from many banks.
Many other factors other then mentioned above also suggest to keep Money with different banks .
Keep investing in different banks . All the best.