Can I start with just USD 500?

Yes. Both GIFT City FDs and some mutual funds (like Tata India Dynamic Equity Fund) accept USD 500 minimum. You don't need lakhs to begin.

Is my money stuck in GIFT City forever?

No. GIFT City investments are fully repatriable. Both principal and returns can be transferred to your country of residence without the complications of NRO account repatriation (which has annual limits and requires CA certificates).

Do I need a PAN card?

For most GIFT City products, yes. However, certain Category I and II AIF investments may exempt you from PAN requirements if the fund has already deducted applicable taxes ( ICICI Bank GIFT City Guidelines ). For a first-time investor starting with FDs, plan to have your PAN card ready.

What if I return to India? Do I lose the benefits?

Your existing investments continue during your RNOR (Resident but Not Ordinarily Resident) period after returning. The tax treatment may change once you become an ordinary resident. Consider investing while you're still an NRI to maximize benefits.

Which bank should I choose for my first GIFT City FD?

Major banks (SBI, HDFC, ICICI, Axis) all have IFSC Banking Units in GIFT City with similar products. For a first-time investor, familiarity matters. If you already bank with ICICI in India or UAE, their GIFT City branch provides continuity. Compare rates across banks using our FD comparison tool .

5 GIFT City Myths That Stop First-Time NRI Investors

"I've been reading about GIFT City for six months. I still don't know if it's actually meant for someone like me."

That message landed in our WhatsApp community last week. The sender was a 34-year-old software engineer in Dubai.

He earns well. He saves regularly. He's been putting money into a UAE savings account at 0.5% interest while waiting to "understand GIFT City properly."

Six months of waiting. Six months of his savings earning almost nothing.

At Belong, we see this pattern constantly. Smart, cautious NRIs who've heard about GIFT City but can't separate fact from rumor.

They read five articles, each saying something slightly different. They ask friends who've "heard" things. They delay.

The myths aren't exotic or complicated. They're surprisingly basic. And they're costing first-time investors real money.

This guide dismantles five specific myths that stop people from taking that first step.

If you've been circling GIFT City for months without acting, at least one of these is probably holding you back.

Myth #1: "GIFT City Is Only for Rich People"

This is the most common barrier. And until September 2025, it had some truth to it.

The confusion stems from mixing up different GIFT City products.

Alternative Investment Funds (AIFs) did require USD 150,000 minimum until February 2025, when IFSCA reduced it to USD 75,000 (IFSCA Circular, February 2025).

That's still roughly ₹62 lakhs. Not exactly pocket change.

But AIFs aren't the only option. They're not even the most common starting point.

What first-time investors actually use:

Product	Minimum Investment	Best For
GIFT City FDs	USD 500 (~₹42,000)	Conservative first-timers
GIFT City Mutual Funds	USD 500 (~₹42,000)	Growth-oriented investors
AIFs	USD 75,000 (~₹62 lakhs)	High-net-worth investors

Tata Asset Management launched the Tata India Dynamic Equity Fund at GIFT City in September 2025 with just USD 500 minimum (Business Standard).

This was the breakthrough that opened GIFT City to middle-income NRIs.

Fixed deposits? Most GIFT City banks accept USD 500 to USD 1,000 minimum. Through the Belong app, you can start with USD 500.

Compare this to UAE bank FDs offering 2-3% or savings accounts at 0.5%.

A first-time investor with USD 5,000 can now access GIFT City's tax benefits instead of watching their money stagnate.

The reality: GIFT City was designed for wealthy investors initially. That changed in 2025. If you have USD 500 to spare, you can start today.

👉 Tip: Don't wait to accumulate ₹1 crore. Start with a small GIFT City FD to understand how the system works. You can always add more later. Compare current rates using our NRI FD comparison tool.

Myth #2: "NRE FDs Give Higher Returns Than GIFT City FDs"

This myth survives because it's technically true but practically misleading.

Look at the headline numbers:

NRE FD: 7.00% to 7.50% annually
GIFT City FD: 4.50% to 6.00% annually

Case closed? NRE FDs win?

Not when you factor in what actually happens to your money.

The math most articles ignore:

Let's say you invest USD 25,000 in January 2025.

Scenario A: NRE FD at 7.25%

You convert USD 25,000 to INR at ₹83 per dollar. That's ₹20,75,000.

After 3 years at 7.25% (compounded quarterly), you have approximately ₹25,70,000.

But here's the catch. If the rupee depreciates to ₹90 per dollar by maturity (a conservative estimate given the 3-4% annual depreciation trend over the past decade), your ₹25,70,000 converts back to approximately USD 28,555.

Your effective USD return? About 4.5% per year. Not 7.25%.

Scenario B: GIFT City FD at 5.5%

You deposit USD 25,000. It stays as USD 25,000.

After 3 years at 5.5%, you have approximately USD 29,375.

Your effective USD return? 5.5% per year. Exactly as promised.

Which one actually gave you more money? GIFT City. By nearly USD 800 over three years.

The headline rate deceived you. The currency movement ate your gains.

This doesn't mean NRE FDs are bad. If you're planning to return to India and use the money in rupees, currency depreciation doesn't matter. But if you're staying abroad and measuring wealth in dollars or dirhams, the headline rate is a trap.

👉 Tip: Before choosing based on interest rates, ask yourself: "Will I spend this money in rupees or dollars?"

Your answer determines which FD type actually serves you better. Track currency movements on our Rupee vs Dollar tracker.

Myth #3: "I Need to Visit India to Open a GIFT City Account"

This was true until July 2025. It's not true anymore.

The old process required either a physical visit to India or arranging notarized documents through Indian embassies. Some NRIs spent weeks coordinating paperwork across time zones. Others gave up entirely.

IFSCA implemented Video-based Customer Identification Process (V-CIP) in July 2025, allowing complete remote onboarding.

How video KYC actually works:

You schedule a video call with the bank's representative. During the 15-30 minute session, you display your original documents on camera.

The representative performs liveness checks and AI-based face matching. Your account can be activated within days.

What you need:

Valid passport (minimum 6 months validity remaining)
Overseas address proof (utility bill or bank statement, less than 3 months old)
Residence visa or work permit
PAN card (most banks require this)
Stable internet and a camera-enabled device

Who qualifies:

Video KYC is available for NRIs in "low-risk" jurisdictions: UAE, UK, US, Canada, Singapore, Germany, France, Japan, South Korea, and several others.

If you're in Dubai, Abu Dhabi, Sharjah, or anywhere in the UAE, you can complete the entire process from your living room.

Timeline: 3-5 business days from video KYC to account activation for most applicants.

The visit-India barrier no longer exists. If you've been waiting for your next trip home to "sort out" GIFT City, you're waiting for no reason.

👉 Tip: Schedule your video KYC during Indian business hours (9 AM to 5 PM IST) for faster processing. Keep all original documents physically nearby. Mobile phone bills are often rejected as address proof. Use a utility bill or bank statement instead. Our guide on how to open a GIFT City account walks you through each step.

Myth #4: "GIFT City Isn't Safe Because It's Not RBI-Regulated"

This myth comes from a misunderstanding of how GIFT City's regulatory structure works.

It's true that GIFT City isn't regulated by RBI. It's regulated by IFSCA (International Financial Services Centres Authority), a unified regulator established by the Government of India in 2020 specifically for GIFT City.

First-time investors hear "not RBI" and assume "not regulated." That's incorrect.

What IFSCA actually is:

IFSCA combines the regulatory powers of RBI, SEBI, IRDAI, and PFRDA into a single authority for GIFT City operations.

It's not a weaker regulator. It's a consolidated one designed for international financial services.

The banks operating in GIFT City are the same institutions you'd trust anywhere else: SBI, HDFC Bank, ICICI Bank, Axis Bank, IndusInd Bank.

They've simply opened IFSC Banking Units (IBUs) within GIFT City that operate under IFSCA rules instead of domestic RBI rules.

What the regulatory framework includes:

Capital adequacy requirements for banks
KYC and Anti-Money Laundering compliance
Investor protection guidelines
Fund management regulations for AIFs and mutual funds
Dispute resolution mechanisms

JP Morgan and Deutsche Bank have established operations in GIFT City. These global institutions wouldn't enter a poorly regulated environment.

The one genuine difference:

GIFT City deposits don't have DICGC insurance. Traditional NRE, NRO, and FCNR deposits in India are insured up to ₹5 lakh per depositor per bank. GIFT City deposits are not covered under this scheme.

This is a real consideration, not a myth. But it's a different statement from "GIFT City isn't safe." You're relying on the creditworthiness of HDFC Bank or ICICI Bank, institutions with investment-grade credit ratings, rather than government insurance.

For most NRIs, the credit risk of major Indian banks is acceptable. But you should know this before investing, not discover it later.

👉 Tip: If deposit insurance matters to you, consider splitting your investments. Keep some funds in DICGC-insured NRE FDs and some in GIFT City FDs. You get safety AND tax efficiency. Many NRIs in our community use a 60-40 split between GIFT City and traditional NRE deposits.

Myth #5: "GIFT City Returns Are Completely Tax-Free"

This is the most dangerous myth because it's half-true.

When you read "GIFT City investments are tax-free," the statement usually means tax-free in India. That's accurate for most products.

Interest from GIFT City FDs is exempt from Indian income tax. No TDS is deducted. You don't need to file an Indian tax return for this income alone.

But here's what the marketing doesn't emphasize: you may owe tax in your country of residence.

If you're in the UAE:

The UAE has no personal income tax. GIFT City returns that are tax-free in India remain tax-free for you. You keep 100% of what you earn.

This is why UAE-based NRIs benefit the most from GIFT City.

If you're in the UK:

Your situation changed dramatically in April 2025. The previous non-domicile ("non-dom") rules allowed some UK residents to avoid tax on foreign income not brought into the UK.

Those rules ended. As a UK tax resident, you must now report all worldwide income on your Self Assessment tax return (GOV.UK).

GIFT City returns are tax-free in India, but you'll pay UK tax at your marginal rate (20%, 40%, or 45% depending on your income bracket).

The India-UK DTAA prevents double taxation, but since India charges zero tax, there's nothing to credit against your UK liability.

If you're in the US:

US citizens and Green Card holders are taxed on global income regardless of where they live. GIFT City gains are reportable to the IRS.

Additionally, investing in foreign pooled funds (like AIFs) can trigger PFIC (Passive Foreign Investment Company) rules, leading to punitive tax rates and complex Form 8621 reporting.

US-based NRIs should consult a cross-border tax advisor before investing in GIFT City mutual funds or AIFs. GIFT City FDs are simpler from a US tax perspective but still fully taxable.

The accurate statement:

GIFT City investments are tax-free in India. Your total tax depends on where you live.

Residence Country	Tax in India	Tax in Residence Country	Net Tax
UAE	0%	0%	0%
UK	0%	Up to 45%	Up to 45%
US	0%	Up to 37% + PFIC complications	Varies
Singapore	0%	0%	0%

Understanding this distinction matters enormously. A UK NRI who invests ₹50 lakhs thinking returns are "tax-free" could face a £15,000+ UK tax bill they didn't plan for.

👉 Tip: Before investing, identify your tax residency and check your country's treatment of foreign investment income. UAE and Singapore residents get the full benefit. UK, US, Germany, and Australia residents should factor in home-country taxes when calculating real returns. Our detailed guide on GIFT City tax treatment breaks this down by country.

The Real Question First-Time Investors Should Ask

After reading about these myths, the question isn't "Is GIFT City good or bad?"

The question is: "Is GIFT City right for my specific situation?"

Here's a simple framework:

GIFT City is likely a good fit if:

You're in a zero-tax jurisdiction (UAE, Singapore, Hong Kong)
You want to invest in India without currency risk
You have at least USD 500 to start
You plan to stay abroad for the foreseeable future
You value tax efficiency and easy repatriation

GIFT City may not be the best choice if:

You're returning to India within 1-2 years (consider NRE FDs for rupee-denominated savings)
You're in the US and want to avoid PFIC complexity (stick to FDs, avoid pooled funds)
Deposit insurance is non-negotiable for you
You prefer dealing with RBI-regulated entities exclusively

The hybrid approach most NRIs use:

Don't choose exclusively. Many NRIs in our community allocate:

50-60% to GIFT City USD FDs (currency protection, tax efficiency)
30-40% to NRE FDs (higher nominal rates, deposit insurance)
10-20% to GIFT City mutual funds or Indian mutual funds (growth exposure)

This balances safety, returns, and currency protection.

What's Actually Holding You Back?

If you've read this far and still haven't started, the reason probably isn't information.

It might be:

Analysis paralysis: You want to understand everything before doing anything. But you don't need to master GIFT City before opening a USD 500 FD. Start small. Learn by doing.

Fear of making mistakes: Every first-time investor worries about this. The good news: starting with USD 500 in a fixed deposit is about as low-risk as it gets. You can't lose money (except to opportunity cost of waiting).

Lack of trusted guidance: This is legitimate. GIFT City is new. Most advisors don't specialize in it. Most bank relationship managers push their own products.

This is exactly why we built Belong. Our platform and community exist specifically for NRIs navigating these decisions.

We're not trying to sell you complicated products. We want you to understand your options clearly and choose what fits your situation.

The Simplest Way to Start

If you've been waiting on the sidelines, here's the lowest-friction path into GIFT City:

Step 1: Download the Belong app. Our platform handles the complexity behind the scenes.

Step 2: Complete digital KYC. Have your passport, visa, and overseas address proof ready. Takes 10-15 minutes.

Step 3: Open a USD FD with whatever amount you're comfortable with. USD 500 is fine. USD 5,000 is fine. Pick a tenure that matches when you might need the money.

Step 4: Watch how it works. See the interest credited. Experience the repatriation process.

Step 5: Add more once you're comfortable.

That software engineer from Dubai who messaged our community? He started with USD 2,000 in a GIFT City FD last month. His feedback: "I wish I hadn't waited six months. The process was simpler than opening my UAE bank account."

The myths sound plausible. They're not true. And every month you wait is a month your money earns 0.5% instead of 5%.

Join our WhatsApp community where thousands of NRIs share experiences, ask questions, and help each other navigate these decisions. Or download the Belong app and start today.

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