Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Statutory cover protecting bank deposits up to a prescribed limit, written per depositor per bank rather than per account.
Bank FDs have it; corporate FDs, NCDs, credit societies and NBFC deposits have nothing equivalent, and that gap is most of the yield difference. Six accounts at one bank share one limit — the unit that multiplies the cover is the bank.
The Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the Reserve Bank that insures deposits at covered banks.
Cover is automatic, the bank pays the premium and you cannot opt out. It pays up to the prescribed limit per depositor per bank, net of anything you owe that bank.