You must note that deposits in banks are not insured by Deposit Insurance and Credit Guarantee Corporation (DICGC). Deposit Insurance and Credit Guarantee Corporation (DICGC) is a body that operates the deposit insurance system in India. According to Reserve Bank of India, all commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. In the event of a bank failure, DICGC protects bank deposits that are payable in India. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. Presently, deposits of each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him/her. Note that any amount above Rs. 1,00,000 is a bank is not insured. You may have accounts in different banks and each of them is insured for upto Rs. 1,00,000. The DICGC while registering the banks as insured banks furnishes them with printed leaflets for display giving information relating to the protection afforded by the Corporation to the depositors of the insured banks. In case of doubt, depositor should make specific enquiry from the bank’s officials in this regard or visit DICGC website on the web address www.dicgc.org.in.

Deposits in companies do not have the same guarantees from DICGC. Some companies do have the backing of certain state governments as they say on their websites. It's not clear what specific guarantees the state governments have given regarding how much deposit amount is covered in case the company defaults and how they plan to return the deposit amounts to investors. Company fixed deposits carry 2 additional risks as compared to bank fixed deposits: they do not carry DICGC insurance and they are not regulated as closely as banks by Reserve Bank of India. The additional interest that companies give therefore carry additional risks that you should carefully consider before investing.