How the cover works
The Deposit Insurance and Credit Guarantee Corporation insures each depositor in a bank up to ₹5,00,000 for both principal and interest, in the same right and the same capacity.
Deposits in different branches of the same bank are aggregated. So spreading ₹15 lakh across three branches of one bank leaves ₹10 lakh uninsured; spreading it across three different banks does not.
The cover applies to savings accounts, current accounts, fixed deposits and recurring deposits, and it applies to co-operative banks as well as commercial ones.
What "same capacity" means
This is the part that is genuinely useful. An account you hold individually and an account you hold as a partner in a firm, or as a guardian for a minor, are held in different capacities and are insured separately.
Joint accounts are treated by the combination of holders and the order of names, so an account in the order A-then-B is a different combination from B-then-A.
What it does not cover
Deposits of foreign governments, central and state governments, inter-bank deposits, and deposits held outside India are excluded.
And it is worth being clear that this is insurance against the BANK failing, not against your own decisions. It does not protect you from a poor return, from inflation, or from anything you were persuaded to move into a non-deposit product.