Having deposits across different banks helps. Every bank is insured upto 5 lakh rupees under DICDC. So it helps in diversifying the risk of one bank going down. And insuring more amount. Basically 5 lakh per bank account. Also a lot of small finance banks provide higher interest rates on deposits. So I prefer making 4.5L₹ deposits in such banks. 4.5L principal + the interest goes till 5L₹ insured.