What Is a GIFT City Bank Account? Simple Guide for NRIs

"Is this like a normal bank account?"

That is the first question almost everyone asks us.

A member of our community in Abu Dhabi put it this way: "I kept hearing GIFT City, GIFT City everywhere. I finally looked it up and found pages full of jargon. I still had no idea what it actually was."

We hear this regularly at Belong.

So this article is our attempt to explain GIFT City bank accounts in plain English. No jargon unless we explain it. No assumptions about what you already know.

By the end, you will understand exactly what a GIFT City bank account is, how it is different from your NRE or NRO account, what you can do with it, and whether it makes sense for you.

Start Here: What Is GIFT City?

GIFT City stands for Gujarat International Finance Tec-City.

It is a special financial zone in Gujarat, India, located between Ahmedabad and Gandhinagar.

Think of it like this: imagine India carved out a small piece of land and said, "This patch operates like Singapore or Dubai. Foreign currency only. International financial rules. Different regulator."

That is essentially what GIFT City is.

It is physically in India. But for financial and legal purposes, it is treated as foreign territory under FEMA (the Foreign Exchange Management Act). Source: IFSCA official documentation.

This one distinction explains almost everything that makes GIFT City different.

So What Is a GIFT City Bank Account?

A GIFT City bank account is a foreign currency account held at a bank's special branch inside GIFT City.

These special branches are called IBUs, which stands for IFSC Banking Units.

Your money in a GIFT City account sits in USD (or GBP, EUR, AUD depending on the bank). It does not convert to rupees. It does not touch the Indian domestic banking system.

The banks running IBUs are the same Indian banks you already know: SBI, HDFC, ICICI, Axis, IDFC FIRST. There are also international banks like DBS and HSBC. As of 2025, 35 banks operate IBUs in GIFT City. Source: IFSCA official data.

👉 Tip: Think of a GIFT City bank account as your Indian bank's international branch, located in India but operating by international rules. Same familiar bank, completely different account structure.

How Is It Different From an NRE or NRO Account?

Most NRIs already have one or both of these accounts. Here is the simplest way to understand the difference.

NRE Account (Non-Resident External): You send USD from abroad. The bank converts it to rupees. Your money now sits in rupees in India. Interest is tax-free in India. You can bring the money back anytime. But the moment your money converts to rupees, it is exposed to rupee depreciation.

NRO Account (Non-Resident Ordinary): This is for income you earn inside India, like rent from a property or dividends from Indian shares. The money sits in rupees. Interest is taxed at 30% TDS. Taking money out of India from an NRO account involves significant paperwork.

GIFT City Bank Account: You send USD from abroad. Your money stays in USD. No conversion to rupees. Interest is tax-free in India. You can bring the money back anytime, with no ceiling and no paperwork. Source: FEMA framework; CBDT Circular No. 26/2016.

The single biggest practical difference is this: your money never becomes rupees.

What Types of GIFT City Bank Accounts Exist?

There are three main account types at most IBUs.

Savings Account (Global Savings Account)

This works like a regular savings account, but in USD.

You deposit money. It earns interest on your daily balance. You can add or withdraw funds. Interest rates on USD savings accounts range from around 2 to 5% p.a. depending on the bank. Source: Zerodha Z-Connect.

This is the most flexible option. No lock-in. No fixed tenure. Good for NRIs who want to keep some USD liquid while earning a return.

One practical note: most GIFT City savings accounts currently do not come with a chequebook or standard debit card. Transactions happen through bank transfers. Source: primewealth.co.in GIFT City guide.

Fixed Deposit (Foreign Currency FD)

This is the most popular product in GIFT City right now.

You deposit a fixed amount in USD for a chosen period. The bank pays you a fixed interest rate for that period. At the end, you get your principal and interest back.

Tenures range from 7 days to 5 years. Minimum deposit is typically USD 500 to USD 1,000 depending on the bank. Current USD FD rates range from 4 to 6% p.a. depending on the bank and tenure. Source: Axis Bank GIFT City; Belong NRI FD tool data.

Compare current rates across banks using our NRI FD rates tool.

Call Account (Current Account)

This is a zero-interest account primarily used for transactions rather than savings.

It is the main account type available to resident Indians under LRS. NRIs also use it for operational purposes: parking funds temporarily before investing, or managing trade finance transactions.

👉 Tip: For most NRIs exploring GIFT City for the first time, the fixed deposit is the best starting point. It is straightforward, requires no active management, and gives you a clear sense of how the system works before you explore more complex products.

The Four Things That Make GIFT City Different

1. Your Money Stays in USD

This is the most important feature.

The rupee has depreciated from roughly Rs 43 to over Rs 85 against the dollar over the past two decades. That is approximately 3 to 4% every year. Source: RBI exchange rate data.

If you put USD 10,000 into an NRE FD, it converts to rupees immediately. Even if the FD earns 7% in rupee terms, the real return in USD can be as low as 3 to 3.5% once you account for how much the rupee has weakened by the time you withdraw.

In a GIFT City account, your USD stays USD throughout. You earn 4 to 6% in USD. No conversion. No currency erosion. What you put in and what you take out are in the same currency.

2. Interest Is Tax-Free in India

Interest earned on GIFT City accounts is completely exempt from Indian tax. No TDS is deducted at source. Your returns land in your account in full.

This is confirmed under CBDT Circular No. 26/2016 dated July 4, 2016, and remains in force through FY 2025-26. Source: CBDT; HDFC Bank GIFT City FAQs.

This means no chasing TDS refunds from the Indian tax department. No compliance paperwork around Indian tax on your deposit income.

Important: this is tax-free in India. If you are in the UK or US, you still owe tax on this income in your home country. UAE-based NRIs currently benefit fully because the UAE has no personal income tax.

3. Full Repatriation, No Paperwork

Getting money out of India from an NRO account requires Form 15CA, Form 15CB, a Chartered Accountant certificate, and a USD 1 million per year cap.

GIFT City has none of this. Your money moves via SWIFT. No ceiling. No CA certificates. No RBI approval. Source: FEMA regulations; IFSCA framework.

This matters most to NRIs who have experienced the frustration of repatriating money from India the traditional way.

4. FDs From Just 7 Days

Traditional FCNR deposits, which are the older foreign currency FD option for NRIs, require a minimum one-year lock-in. No interest is paid if you withdraw before that. Source: RBI FCNR Master Direction.

GIFT City FDs start from 7 days.

If you need to park USD for three months while deciding your next investment move, a GIFT City FD gives you that flexibility. FCNR does not.

Who Can Open a GIFT City Bank Account?

The account is open to the following:

Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs), and foreign nationals.

You qualify as an NRI if you have lived outside India for 182 days or more in the previous financial year. Check your status with our NRI status guide if you are unsure.

What about resident Indians?

Resident Indians can also access GIFT City, but through a different route.

Under LRS (Liberalised Remittance Scheme), you can remit up to USD 2,50,000 per financial year to open a Call Account at a GIFT City IBU. From there, you can invest in USD FDs, mutual funds, and other GIFT City products. Source: RBI LRS Master Direction.

This is important. If your entire portfolio is in Indian mutual funds, stocks, or FDs, GIFT City is now your most practical path to global diversification using a familiar Indian bank.

What Can You Actually Do With a GIFT City Account?

Opening a GIFT City bank account is the starting point. Here is what it gives you access to.

Fixed Deposits

The simplest and most popular product. Park USD for 7 days to 5 years. Earn 4 to 6% p.a. tax-free in India. Full repatriation on maturity. Compare current rates at our NRI FD rates tool.

For more on how these compare to NRE and FCNR options, see our GIFT City FDs vs regular bank FDs guide.

Mutual Funds

USD-denominated mutual funds investing in India and globally. These have become more accessible since 2022, with some funds now starting from just USD 500.

Explore options including the DSP Global Equity Fund, the Tata India Dynamic Equity Fund, the Edelweiss Greater China Equity Fund, and the Sundaram India Mid Cap Fund through our GIFT City Mutual Funds tool.

Alternative Investment Funds (AIFs)

For investors with USD 75,000 and above. Category III AIFs in GIFT City offer capital gains tax exemption on specified securities. Browse available options on our GIFT City AIF explorer.

GIFT City IPOs

NRIs can now participate in GIFT City IPOs denominated in USD. Browse available IPO products on Belong.

Global Equity

Through NSE IFSC and India INX exchanges, you can access US stocks, global bonds, and derivatives in USD with no Securities Transaction Tax.

Track GIFT Nifty movements in real time using our GIFT Nifty live tracker, which shows how global markets are pricing Indian equity sentiment before the domestic market opens.

👉 Tip: You do not need to open a separate IBU bank account to start investing in GIFT City products. Belong lets you access GIFT City FDs and mutual funds through a single app onboarding. One set of KYC, multiple products.

What Are the Limitations?

We believe in giving you the complete picture. GIFT City accounts are excellent for the right situation. But there are genuine limitations worth knowing.

No deposit insurance: Domestic NRE and NRO accounts are insured up to Rs 5 lakh by DICGC. GIFT City IBU accounts are not covered. You are relying on the creditworthiness of the bank itself. Source: IFSCA regulations; DICGC framework.

No chequebook or standard debit card: GIFT City accounts are not for daily transactions. All movement of funds happens via SWIFT bank transfers.

SWIFT fees on small amounts: Moving money in or out costs USD 30 to USD 100 in transfer fees depending on your bank. On small amounts, this eats meaningfully into your returns.

Tax in your home country still applies: India does not tax your GIFT City interest. Your country of residence may. UAE NRIs currently face no home-country tax. UK and US NRIs need to report this income to their local tax authorities.

Onboarding takes time: Account opening through Video KYC (V-CIP) typically takes 3 to 14 business days. Source: IFSCA V-CIP guidelines, July 2025.

For a full breakdown of all limitations, see our article on who should not open a GIFT City bank account.

How Is GIFT City Different From Investing Through Your UAE or UK Bank?

This is a question we get often from NRIs who already bank locally where they live.

Your UAE or UK bank account is fine for daily transactions, salary, rent, and savings in that country's financial system.

But it does not give you a regulated, tax-efficient way to stay connected to Indian financial markets. It does not give you USD-denominated Indian equity exposure. It does not give you a structured path to repatriation when you eventually return to India or transfer capital.

GIFT City sits in between. It is Indian-regulated, uses familiar Indian banks, gives you USD denomination, and connects you to India's financial ecosystem without forcing you into rupees.

It is not a replacement for your UAE or UK account. It is a complement.

A Simple Way to Think About It

Here is the clearest analogy we use with our community.

Your NRE account is like a rupee wallet inside India. Your money goes in as dollars and immediately becomes rupees.

Your GIFT City account is like a dollar wallet that happens to be located in India. Your money goes in as dollars and stays as dollars. Everything, the interest, the returns, the repatriation, happens in dollars.

Same familiar banks. Same Indian regulatory oversight. Completely different currency experience.

For Resident Indians: Why This Matters to You Too

If you are based in India, GIFT City is not something you hear about every day.

But it should be on your radar.

If your entire portfolio sits in Indian equity, Indian mutual funds, and Indian FDs, you have zero protection against long-term INR depreciation. The rupee has weakened by over 3% annually against the dollar for two decades. That is a quiet, consistent drag on your real wealth in global purchasing power terms.

Through LRS, you can open a GIFT City Call Account, deposit up to USD 2,50,000 per financial year, and invest in USD FDs or global mutual funds. All from a bank you already use. All fully legal and regulated.

One planning point: remittances above Rs 10 lakh per financial year attract 20% TCS, which is credited against your income tax liability but needs to be factored into your cash flow. Source: RBI LRS Master Direction, updated April 2025.

If you want to explore global and Indian fund options together, start with Belong's mutual funds platform.

👉 Tip: As a resident Indian, you do not need to open an account in Singapore or the US to get dollar exposure. Your existing HDFC, ICICI, or SBI relationship now includes a GIFT City IBU. Ask your RM specifically about LRS-based GIFT City access. Many customers do not know this option exists within their existing bank.

Quick Reference: GIFT City Bank Account at a Glance

Source: IFSCA; ICICI Bank GIFT City FAQs; IDFC FIRST Bank GIFT City guide; Zerodha Z-Connect.

FAQs

Is a GIFT City bank account the same as an NRE account?

No. An NRE account converts your foreign currency into rupees. A GIFT City account keeps your money in USD (or your chosen foreign currency) throughout. The tax treatment is similar in India, both are tax-free, but the currency structure, repatriation rules, and regulatory framework are different. NRE accounts are regulated by RBI. GIFT City accounts are regulated by IFSCA.

Can I open a GIFT City account without visiting India?

Yes, for NRIs in supported countries. IFSCA introduced Video KYC (V-CIP) in July 2025, allowing NRIs in UAE, US, UK, Canada, Singapore, Germany, France, Japan, and South Korea to complete onboarding remotely. Source: IFSCA guidelines. The full process is covered in our GIFT City account opening guide.

What is the minimum amount to open a GIFT City account?

Most savings accounts have no formal minimum balance requirement. FDs typically start from USD 500 at Axis Bank and IDFC FIRST, and USD 1,000 at ICICI and HDFC. Source: Individual bank GIFT City FAQs.

Is my money safe in a GIFT City account?

The banks running IBUs, SBI, HDFC, ICICI, are the same well-capitalised institutions you trust domestically. The key difference is that GIFT City deposits are not covered by DICGC deposit insurance (which protects domestic accounts up to Rs 5 lakh). You are relying on the bank's own financial strength, not a government guarantee. For most NRIs, this is an acceptable trade-off. For those who prioritise capital protection above all, domestic NRE or FCNR deposits with DICGC coverage are a better fit. Source: IFSCA regulations; DICGC framework.

Do I still pay tax on GIFT City interest if I live in the UAE?

In India, no. The interest is completely tax-free. Since the UAE currently has no personal income tax, UAE-based NRIs enjoy this benefit end-to-end. Source: CBDT Circular No. 26/2016; UAE Ministry of Finance.

Can I keep both an NRE account and a GIFT City account?

Absolutely. Most NRIs who use GIFT City keep their NRE accounts running alongside it. NRE accounts are the right place for rupee savings and Indian transactions. GIFT City adds a USD savings and investment layer on top. They serve different purposes and work well together.

Disclaimer: This article is for informational purposes only. It does not constitute personalised investment or tax advice. Please consult a SEBI-registered advisor and, where relevant, a tax advisor in your country of residence before making investment decisions. Sources: IFSCA, CBDT Circular No. 26/2016, RBI LRS Master Direction (April 2025), Zerodha Z-Connect, IDFC FIRST Bank GIFT City guide, ICICI Bank GIFT City FAQs, DICGC framework, Belong NRI FD tool data.