USD Fixed Deposits at IBUs — park dollars in India at 4-5% rates
IFSC Banking Units (IBUs) at GIFT City offer USD-denominated FDs at rates that beat your US/UK savings account by 200-300 basis points. NRE-eligible, repatriable, no TDS.
The most actionable GIFT City product for a typical NRI. An IFSC Banking Unit (IBU) is essentially an offshore branch of an Indian bank, sitting inside GIFT City. It accepts deposits in foreign currency (USD, GBP, EUR, AUD, JPY) from non-residents and pays interest in the same currency. Unlike a mainland FCNR deposit, the IBU operates under IFSCA rules — different reserve requirements, different cost structure, generally higher rates.
How IBU USD FD compares to FCNR Last verified: May 2026
Rates are illustrative and change monthly. The pattern (IBU pays ~50–75 bps more than FCNR) is structural and persistent. Verify per-bank before locking in: HDFC → · ICICI → · Kotak → · SBI → · Axis →
| Bank | 1-yr FCNR USD | 1-yr IBU USD FD | Spread |
|---|---|---|---|
| HDFC Bank | 4.50% | 5.20% | +70 bps |
| ICICI Bank | 4.55% | 5.25% | +70 bps |
| Kotak Mahindra | 4.40% | 5.10% | +70 bps |
| SBI | 4.30% | 4.95% | +65 bps |
| Axis Bank | 4.50% | 5.15% | +65 bps |
| Federal Bank | 4.45% | 5.10% | +65 bps |
| Bank of Baroda | 4.35% | 5.00% | +65 bps |
| IndusInd Bank | 4.50% | 5.20% | +70 bps |
Tenors, minimums, and currencies
- Tenors: 1, 2, 3, 5 years standard. A few IBUs offer up to 10-year USD FDs (FCNR caps at 5 years). Useful if you want to lock USD interest for the long term.
- Minimum deposit: typically $1,000 at most IBUs; a few require $5,000 minimum. Compare to FCNR which goes as low as $1,000 across most banks.
- Currencies accepted: USD, GBP, EUR, JPY, AUD at the larger IBUs (HDFC, ICICI, SBI, Kotak). Smaller IBUs may only do USD.
- Premature withdrawal: rules vary by IBU. Some allow penalty-free withdrawal after 1 year; others charge a 1% penalty up to 18 months.
Tax + repatriation
- India tax: Interest is tax-free in India for NRIs — same as FCNR. No TDS, no Indian return filing required for this income alone.
- Home-country tax: If you're a US tax resident, IBU USD FD interest is reportable global income on Schedule B (Form 1040). Same as FCNR. UK/Canada also tax it. Tax-free in India ≠ tax-free everywhere.
- Repatriation: Principal + interest are fully repatriable. No $1M cap (that cap applies to NRO funds, not foreign-currency deposits).
- FATCA / CRS: Yes, IBU deposits are reportable to your home tax authority. Same as FCNR.
Belong — GIFT City IBU deposits, fully digital
Belong is the cleanest retail-NRI route into GIFT City IFSC banking unit deposits. They aggregate IBU FD inventory from top-tier partner banks (HDFC, Kotak, Federal, others), handle the KYC/onboarding fully online, and let you compare and book USD FDs without the usual friction of opening direct relationships with each IBU. Up to 6% in USD terms; 9.5–10% INR-equivalent tax-free on the rupee-tilt option.
- Digital onboarding — no India trip required
- Compare rates across multiple IBU banks in one place
- Same regulatory protection as direct IBU deposits (governed by IFSCA)
- Tax-free in India for NRIs (same as FCNR + IBU direct)
- Foreign-tax reporting still applies (US Schedule B, UK/Canada equivalents)
Disclosure: featuring Belong here as the most accessible retail-NRI entry to GIFT City IBU FDs. We don't currently have a paid relationship with Belong; if that changes, we'll disclose it clearly. The product fundamentals (IBU deposits at IFSCA-regulated banks) are the same regardless of route.