If you’re holding USD, GBP, EUR or another foreign currency and looking at GIFT City FDs, the rate is probably the first number you’ll check. It shouldn’t be the last.

GIFT City FDs let eligible investors place foreign currency with an IFSC Banking Unit (IBU) in GIFT City without first converting it into rupees. The deposit and interest can remain in the currency in which the FD was opened.

The difference between banks can look small on paper. A few tenths of a percentage point, however, can matter - and so can the minimum deposit, the currency you hold, what happens if you break the FD early, and what you pay to move the money in.

So this guide does two things: tracks the latest GIFT City FD rates across banks, and looks at what those rates actually mean once you account for the terms around them.

PS - Rates are based on the banks' published schedules and are subject to change. (Last checked: September 2026).

What are GIFT City FD rates in 2026?

GIFT City USD FD rates currently range from 3.30% to 5.20%. The highest rates sit in the 9 to 18 month window.

Last checked: 25 September 2026. Each figure is the bank's highest published rate on a USD deposit you can break early (a callable deposit), for individuals depositing under USD 1 million.

Kotak Mahindra Bank publishes rates only for non-callable USD deposits of USD 500,000 or more, topping out at 5.00% for 36 to 60 months. Its rates for smaller or breakable deposits are available from the bank on request.

Which GIFT City bank offers the highest FD rate?

If you’re looking purely at the highest published USD rate, Bank of Baroda currently leads the rates we checked, at 5.20% for deposits of more than 270 days to 367 days. If you are willing to lock your money in with no early exit, HDFC's non-callable FD pays 5.00% for 12 to 18 months, and Kotak pays 5.00% for 36 to 60 months on deposits of USD 500,000 or more.

But there’s an important catch to a table like this:
the highest number isn't automatically the best deal for you.

Rates across GIFT City banks are quoted for different tenures and under different conditions. Some higher rates apply only to non-premature or non-callable deposits. Others vary by deposit size. A 5% rate that you cannot access early is a different proposition from a 4.5% rate that gives you more flexibility.

For example, Kotak's published GIFT City schedule currently shows 5.00% on certain non-premature USD deposits, while its regular USD deposits reach 4.70% for 12–15 months.

So you're not really comparing 5.20% vs 5.00%.

You're comparing:

5.20% + access to your money + deposit size + currency + transfer costs + tenure

against

5.00% + a different set of conditions.

And those conditions can matter more than a 0.20% difference in the headline rate.

The rate also isn't what you take home. Currency, minimum deposit, early withdrawal terms and transfer costs decide that, and they are covered next.

What should you check before choosing a GIFT City FD?

Five things, in this order. The first two tell you which banks you can use at all. The last three decide how much of the rate you keep.

1/ What currency do you already hold?

Deposit in the currency your money is already in. If you hold GBP and the bank only takes USD, you convert once going in and again coming out, and each conversion costs you a spread.

• Widest choice: ICICI (USD, GBP, EUR, AED, CAD, HKD, SGD, AUD) and Federal Bank (USD, GBP, EUR, AUD, AED, SGD, CHF, JPY).

• Broad: HDFC (seven currencies including CAD, JPY and CHF), SBI (USD, GBP, EUR, CAD, JPY and others) and Bank of Baroda (USD, EUR, GBP, AUD, AED).

• Narrow: Axis (USD only), IDFC FIRST (USD, EUR), HSBC and Canara (USD, GBP, EUR).

One catch at HDFC: EUR and GBP deposits closed before maturity earn 0% interest. If you might break a non-USD deposit early, HDFC is the wrong home for it.

2/ What is the minimum deposit?

The minimum decides which banks you can use at all, so check it before you compare rates. Most GIFT City banks let you start small. 1,000 units of your currency gets you in at Bank of Baroda, ICICI, Federal Bank and Kotak, and SBI has no minimum at all.

HDFC is the exception. It needs USD 5,000, so if you're placing less, its 4.95% is out of reach and Bank of Baroda or SBI gives you the best rate instead. At the other end, Kotak's headline 5.00% is priced for large balances: it applies only to deposits of USD 500,000 or more that you agree not to touch until maturity.

Axis, IDFC FIRST and Canara don't publish a minimum, so ask the bank before you send the wire. Finding out after the money has left your account means paying a second transfer fee to move it elsewhere.

3/ What happens if you withdraw early?

When you break a callable FD, the bank recalculates your interest at the rate for the time the money actually stayed, then deducts a penalty. That means the shorter-tenure rate matters as much as the penalty itself.

A non-callable FD pays more because you give up the exit entirely. Kotak's non-callable deposits can only be broken by statutory, regulatory or court order. Choose one only for money you are certain you won't need before maturity.

4/ What will it cost to move the money?

You fund a GIFT City FD by international wire (SWIFT), so there are up to three fees: your home bank's sending fee, any intermediary bank's deduction, and the receiving bank's charge.

The receiving side is often free. ICICI and HDFC charge nothing on inward transfers, and Federal Bank charges 10 USD, GBP, EUR or AUD. Your home bank's sending fee is usually the bigger cost, so check its fee schedule.

These fees are flat, so they hurt small deposits most. On USD 2,000, a USD 30 wire fee takes about 29% of a year's interest at 5.20% (USD 104). On USD 50,000, the same fee barely registers.

5/ Does the bank renew your FD automatically?

ICICI, IDFC FIRST and Kotak renew by default at whatever rate applies on maturity day. HDFC renews only if you opt in. Kotak needs your instruction at least 2 working days before maturity if you don't want to renew.

If rates have fallen by the time your FD matures, an automatic renewal locks you into the lower rate. Set a reminder two weeks before maturity.

Which GIFT City bank fits your situation?

Find the row closest to you. If two rows apply, the one higher up usually matters more.

How much will you actually earn from a GIFT City FD?

For an NRI, the headline interest rate is only the starting point. Consider four factors:

• Indian tax: For eligible non-residents, interest on foreign-currency deposits with GIFT City IFSC banking units is exempt from Indian income tax, with no TDS.

• Overseas tax: “Tax-free in India” does not mean tax-free worldwide. Your country of tax residence may tax the interest and require reporting. US tax residents, for example, generally report worldwide interest income.

• FX and transfer costs: Currency-conversion costs, wire fees and intermediary-bank charges can reduce your overall return.

• Early withdrawal: Breaking the FD before maturity may lower the applicable interest rate or trigger a penalty, depending on the bank.

Example: A USD 10,000 deposit at 4.5% simple interest for one year earns USD 450. Assuming overseas tax of 24% on that interest, you retain USD 342 - a 3.42% return before FX and transfer costs. With no overseas tax, you keep USD 450 before costs.

GIFT City FD vs FCNR FD vs NRE FD

If you're an NRI deciding where to park foreign currency or rupee savings, these three deposits work quite differently.

The DICGC limit covers all your deposits at one bank combined, so it matters less the more you deposit. Above ₹5 lakh, both a GIFT City FD and an FCNR FD rest mainly on the strength of the bank itself.

So which one fits what?

GIFT City FD: relevant if you want a foreign-currency deposit through an IFSC bank and are comfortable with the fact that these deposits do not have DICGC protection.

FCNR FD: relevant if you want to keep your principal and interest in a foreign currency while using a conventional Indian bank. Eligible FCNR deposits have DICGC cover, subject to the ₹5 lakh limit.

NRE FD: relevant if you are comfortable holding your savings in INR and want an NRE deposit with the associated tax and repatriation treatment.

For an NRI, the choice therefore starts with a simple question: Do you want to keep the money in foreign currency, or convert it to INR? Once you answer that, the differences between GIFT City, FCNR and NRE become much easier to compare.

Who can open a GIFT City FD?

In simple terms, GIFT City fixed deposits are designed for:

• NRIs – Indian citizens who are resident outside India for FEMA purposes

• OCIs and PIOs living overseas

• Foreign nationals, subject to each bank’s KYC and country‑risk policy

Resident Indians, by and large, cannot open the standard retail GIFT City FD. That window is reserved for non‑resident individuals and certain eligible entities under IFSC/FEMA rules.

You don't have to be living in India to open a GIFT City fixed deposit.

The important part is that eligibility isn't identical across banks. Before comparing rates, check whether the particular FD is available to your residential status and whether the bank requires you to hold a GIFT City savings/current account first.

How do you open a GIFT City FD from USA/UK/UAE?

For an NRI, opening a GIFT City FD is fairly straightforward, and the process can generally be completed from abroad. The exact steps vary by bank, but the journey typically looks like this.

Step 1: Choose your bank, currency and tenure

Start by comparing FD rates across banks for the currency you want to deposit, such as USD, GBP, EUR or AED. USD is widely available, while GBP, EUR, AED, SGD and others are offered by some banks.Check the minimum deposit and available tenures too. Based on all this, choose a bank with a GIFT City IFSC Banking Unit.

Step 2: Open a GIFT City account if required

Banks have different onboarding routes for their GIFT City products. Some banks require you to open a savings or current account with their GIFT City IFSC Banking Unit before booking an FD. For instance, ICICI Bank requires an ICICI GIFT City Savings Account for its NRI FD. Others may have a different setup, so check this before starting your application.

Step 3: Complete your KYC

As an NRI, you will typically need your passport, overseas address proof, PAN and proof of NRI status. Banks may also ask for FATCA/CRS declarations and tax residency details.

Depending on the bank and your location, this may be completed through digital or video-based verification. Many banks now allow video KYC or fully digital onboarding for eligible NRIs, while others may require attested documents or a branch/RM‑assisted route.

Step 4:Transfer the funds and book your FD

Use the bank’s SWIFT instructions to remit from your overseas account. Some banks also accept NRE transfers or FCNR closure proceeds, depending on their product rules. Confirm conversion and transfer charges before sending money.

Step 5: Book the FD

Once the funds are credited and verified, you can select your currency, tenure and deposit amount and book the FD through the bank's online platform, app or prescribed FD form.

How do you fund a GIFT City FD from USA/UK/UAE?

The available funding routes depend on both the receiving bank and the specific FD product:

• From your overseas bank account: Send a foreign-currency SWIFT transfer using the IBU’s receiving instructions, including any correspondent-bank details. Example -ICICI Bank.  

• From an NRE account: Where supported, rupee balances can be converted into the deposit currency and transferred to GIFT City. IDFC FIRST Bank, for example, permits transfers between NRE accounts and its Global Savings Account.

• From an FCNR(B) deposit: Some banks accept the proceeds through a foreign-currency remittance. IDFC FIRST explicitly supports SWIFT transfers of FCNR closure proceeds from another bank.

• From an NRO account: Eligible funds may be transferred through the applicable repatriation route, subject to limits, source-of-funds checks and tax documentation. ICICI Bank supports NRO-to-GIFT transfers, but these are not unrestricted domestic transfers.

Confirm the funding route before moving your money. Axis’s digital FD, for example, requires funding from your own overseas account and disallows funding from your Axis NRE account. Also check when the interest rate becomes effective: Axis applies the rate prevailing when funds are realised, not necessarily the rate displayed when you apply.

Do you need a GIFT City savings account first?

Sometimes.

There isn't one universal account-opening journey for every GIFT City bank.

With ICICI Bank, for example, an NRI needs a GIFT City Savings Account to book its FD. Once the account is funded, the FD can be booked through net banking or by submitting the FD booking form.

Other banks may structure their IFSC deposits differently. Bank of Baroda, for instance, offers savings and term deposits directly through its IFSC Banking Unit, with term deposits available to resident and non-resident individuals.

Are GIFT City FDs tax-free for NRIs?

Yes, in India. Interest on deposits with an IFSC Banking Unit is exempt for non-residents and for people who are Resident but Not Ordinarily Resident (RNOR). The exemption sits in Schedule IV, Sl. 8 of the Income-tax Act 2025, which replaced section 10(15)(viii) of the 1961 Act from 1 April 2026. The tax law still calls these units "Offshore Banking Units".

If you move back to India

The exemption doesn't end the day you land. It continues for as long as you qualify as RNOR, which depends on how long you lived abroad in the years before your return. Once you become ordinarily resident, the interest is taxable in India at your slab rate. If a move back is on the horizon, time your FD maturities around that change.

Your home country may still tax it

India's exemption doesn't carry over to where you live. US and UK residents pay tax on this interest in their country of residence (see the comparison above).

US taxpayers also have reporting duties on the account itself:

• Schedule B, Part III: Declare any foreign financial account (IRS).

• FBAR (FinCEN 114): File if your foreign accounts together exceed USD 10,000 at any point in the year (FinCEN).

• Form 8938: File if foreign assets exceed USD 50,000 at year end or USD 75,000 at any time (single, living in the US). Joint filers and people living abroad have higher thresholds (IRS).

Are GIFT City FD deposits insured?

Short answer: No. Fixed deposits booked with an IFSC Banking Unit (IBU) in GIFT City are not covered by India’s DICGC deposit insurance scheme.

In mainland India, regular bank FDs (including many NRE/FCNR deposits at domestic branches) enjoy DICGC cover of up to ₹5 lakh per depositor per bank for principal and interest combined. GIFT City IBU deposits operate under a separate IFSC regulatory framework, and multiple banks explicitly state in their FAQs and terms that deposit insurance is not offered for these accounts.

For an NRI, this makes the bank you choose an important part of the decision, especially if you're placing a sizeable foreign-currency deposit. Check the bank's financial strength, the FD terms, premature-withdrawal conditions and what happens to the deposit at maturity before you book it.

Also, don't confuse “fixed return” with “insured deposit.” The FD may have a fixed interest rate and defined maturity terms, but that does not create DICGC protection.