One Bank, Big Risk: Why Parking All Your Money in One Account is a Bad Idea

• Deposits in India are insured only up to Rs 5 lakh per depositor per bank by DICGC, regardless of total amount.
• Splitting funds across multiple banks significantly increases your total insured cover, e.g., two banks provide Rs 10 lakh cover.
• Operational disruptions, technical outages, or regulatory restrictions can temporarily freeze accounts, causing critical access issues.
• Diversifying funds ensures liquidity and access to money even if one bank faces unexpected problems.
• Strategically assign roles: primary bank for transactions, a second for emergency funds and FDs, reducing tail risk.