5 Ways to Compare USD Investment Returns Correctly

"My NRE FD gives 7.2%. Your GIFT City FD gives 5%.

Why would I switch?"

We hear this at least once a day on our WhatsApp community. And every time, the NRI asking is comparing two completely different things.

It's like comparing a Dubai apartment priced in dirhams with a Mumbai flat priced in rupees and concluding the Mumbai one is cheaper because the number is bigger.

At Belong, we've spent 12+ years showing NRIs that headline return numbers mislead.

A 7% return and a 5% return can deliver identical real wealth, or the 5% can outperform, once you apply five adjustments that most comparison tools ignore.

1. Convert Everything to One Currency Before Comparing

This is the single most important rule. And almost nobody follows it.

Your NRE FD earns 7% in rupees. Your GIFT City FD earns 5% in dollars. You cannot compare these numbers directly. They're denominated in different currencies that move against each other.

Here's the correct method. Take the rupee return and subtract the annual USD/INR depreciation rate. The rupee depreciated 5.71% against the dollar in FY2025-26 (Source: Business Standard, Feb 2026). So your 7.2% NRE FD in dollar terms: 7.2% minus 5.71% equals approximately 1.5%.

Your GIFT City FD at 5% in dollars stays at 5%. No conversion math needed. The USD product outperformed by 3.5 percentage points in the currency you actually earn and spend in the UAE.

This isn't a one-year anomaly. The rupee has depreciated at an average of 3-5% annually over three decades (Source: Kotak MF/Bloomberg, Dec 2025).

Any rupee investment needs to beat this depreciation just to match a USD alternative.

For UAE NRIs, compare in AED or USD. For UK NRIs, compare in GBP.

The rule is simple: always convert to the currency you live in before judging performance. Use Belong's exchange rate tracker to get the exact depreciation for your investment period.

👉 Tip: When anyone quotes you a return on an Indian investment, ask: "What's the return in dollars?" If they can't answer, they haven't finished the math. Track USD/INR yourself on Belong before making any comparison.

2. Compare After Tax, Not Before

A 7% return taxed at 30% is worse than a 5% return with zero tax. NRIs consistently compare pre-tax numbers because that's what banks advertise.

Here's how products stack up after tax for a UAE NRI:

Sources: Income Tax Act, IFSCA

The NRO FD advertises 7.5% but delivers 5.2% after TDS. That's barely above the GIFT City FD at 5% with zero tax, and the GIFT City version is in dollars with no currency risk.

Many NRIs don't file Indian ITR to claim DTAA benefits or TDS refunds, making their effective tax rate even higher.

3. Include Conversion Costs in the Equation

This is the hidden cost NRIs almost never calculate. When you send dirhams to an NRE account, the bank converts to rupees.

When you repatriate, rupees convert back. Each conversion has a spread.

Banks typically charge 0.5-1% on each side (Source: Belong Exchange Rates Guide).

On a round trip, that's 1-2% gone before you earn a single rupee of interest. On a ₹50 lakh deposit, that's ₹50,000-1 lakh lost to conversion alone.

GIFT City FDs eliminate this entirely. You send USD from your UAE bank. Interest accrues in USD. At maturity, USD returns to your UAE bank. Zero currency conversion at any point. No hidden banking fees.

Here's the adjusted comparison. Your NRE FD at 7.2%, minus 5.71% depreciation, minus 1% round-trip conversion cost, gives roughly 0.5% real return in dollars. Your GIFT City FD at 5% with no conversion costs gives 5%. The gap widens to 4.5 percentage points.

For FCNR deposits, the conversion math is similar to GIFT City. You deposit in foreign currency and receive in foreign currency. But FCNR rates are typically lower than GIFT City rates. Compare both using our rate tool.

👉 Tip: Ask your bank for the exact buy and sell rates, not the mid-market rate. The difference between Google's rate and your bank's rate is your real conversion cost. On large amounts, even 0.3% matters. Read our guide on money transfer mistakes NRIs make.

4. Match the Time Horizon Before Judging

Comparing a 1-year FD return with a 5-year equity fund return tells you nothing useful.

A GIFT City mutual fund that dropped 8% last quarter isn't "failing." An NRE FD that paid 7% last year isn't "winning." They're playing different games.

The correct approach: compare products over the same holding period, in the same currency, after accounting for volatility.

Fixed deposits (GIFT City, NRE, FCNR) should be compared against each other over matching tenures. Use Belong's NRI FD comparison tool for live rates across 30+ banks. Equity products (GIFT City mutual funds, Indian mutual funds) should be compared over 5+ year rolling periods. A single year return can be dominated by one quarter. Rolling returns show consistency. Read our guide on rolling returns vs point-to-point returns.

Never compare an FD with a mutual fund over a 1-year horizon. Compare FDs with FDs. Compare equity with equity. Then decide your allocation between the two.

5. Factor in Repatriation Cost and Speed

Returns on paper mean nothing if the money can't move when you need it. Two investments with identical after-tax, currency-adjusted returns can differ dramatically on repatriation.

GIFT City FDs are fully repatriable in USD. No currency conversion. No Forms 15CA/15CB. No annual cap. Money moves in 1-3 business days after maturity. NRE accounts are also freely repatriable, but in rupees that need conversion.

NRO investments face the hardest repatriation. Annual cap of USD 1 million. Requires CA certificate and Forms 15CA/15CB for amounts above ₹5 lakh. Process takes 7-15 days with professional fees.

When you add repatriation cost into the equation, an NRO FD at 7.5% with 30% TDS, conversion costs and CA fees may net you less than a GIFT City FD at 5% with zero tax and instant USD transfer.

👉 Tip: Before locking any investment, ask three questions. What currency will I receive at maturity? What documentation do I need to move it abroad? Is there an annual cap? Explore GIFT City AIFs and GIFT City mutual funds for USD alternatives.

Stop Comparing Headline Numbers

The biggest mistake NRIs make isn't choosing the wrong product. It's comparing the right products with the wrong method.

Thousands of NRIs in our WhatsApp community now use this five-step framework for every investment decision. No more guessing. No more misleading headline rates.

The Belong app makes comparison easy. Check FD rates across GIFT City, NRE and FCNR options side by side. Track GIFT Nifty for market signals. Explore GIFT City mutual funds and AIFs. Compare correctly. Then invest with confidence.

Disclaimer: For informational purposes only. Not financial, tax or legal advice. Consult qualified advisors before investing. Tax laws, rates and regulations subject to change. Data from published sources as of February 2026.