What are GIFT City Fixed Deposits?
These are fixed deposits offered by banks (both Indian and foreign) located in the Gujarat International Finance Tec-City (GIFT City), India's upcoming global financial services hub.
Conceptually, they are closest to FCNR deposits offered by Indian banks that you may have heard of, with some key differences.
Similarities with FCNR Fixed Deposits
GIFT City FDs, like FCNR FDs are denominated in non-INR currencies like USD, GBP, AED etc.
Like FCNR deposits, they are not taxable in India and fully repatriable to your resident country.
Differences with FCNR Deposits
They differ from FCNR deposits in terms of tenures and premature withdrawal penalties.
Unlike FCNR which have a minimum tenure of 1 year, GIFT City FDs have lower tenures like 7 days, 3 months etc.
If you withdraw FCNR deposits prematurely (i.e., before 1 year), you forfeit all the interest earned. In contrast, with GIFT City FDs, there's usually a fixed penalty for early withdrawal, which may still allow you to retain part of the accrued interest depending on when you exit.
Also, many times bank Relationship Managers make you open an NRE in order to make FCNR deposits. This adds to more paperwork and if you route the money through NRE, it results in significant conversion costs, leading to a huge loss in overall returns made. You can transfer your money directly from your UAE account to open the GIFT City FD. There is no need for an NRE/NRO account.
To watch a quick video about GIFT City FDs differ from other NRI FDs click here.
To read more about GIFT City FDs click here.
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What is the Belong USD FD?
The USD Fixed Deposit on Belong is a USD-denominated FD offered in partnership with RBL bank’s GIFT City unit. The key highlights of this FD for NRIs are: Higher interest rates: Indian banks typically provide higher interest rates than NRIs’ local ...
Is it possible to book an FD in AED through Belong?
Although GIFT City supports multiple foreign currencies, we offer only USD Fixed Deposits at the moment as the interest rates on USD FDs are higher than AED FDs in GIFT City.
Are my Belong fixed deposits insured like INR FDs?
GIFT City deposits are not currently insured under the DICGC but we believe it is likely to be insured in the future. In India too, the insurance is only for an amount up to 5 lakhs INR only (<$6000).
How is the interest income from GIFT City FDs taxed in India?
Interest earned and principal on GIFT City FDs is fully tax-exempt in India for NRIs. Any tax liability will be as per your resident country only. You should check the tax laws in your resident country and any applicable Double Taxation Avoidance ...
How is the USD FD on Belong better than FCNR deposits?
Conceptually, they are similar to FCNR deposits, but there are some key differences which make them better than FCNR deposits. Unlike FCNR deposits, which have a minimum tenure of 1 year, Belong USD FDs are available for lower tenures as well - 3 ...