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What fees can a GIFT City account charge?
GIFT City IFSC accounts are bank-specific foreign-currency products, not one standardized account with a common tariff. Central Bank of India identifies its IBU as a foreign-currency banking arm and lists savings, current and term-deposit accounts. Its displayed rates are indicative and subject to change; the bank asks customers to contact it for current rates. Federal Bank’s account-opening form directs customers to its current schedule of charges and says service charges and rules may change.
The available information does not establish a complete, current all-in fee for any one account. Ask the bank for the dated schedule that applies to your account type and holder status, and for transaction-level charges in writing.
What to include in a like-for-like quote
- Account maintenance charges, minimum-balance requirements and any fall-below fee.
- Incoming and outgoing wire fees, plus possible deductions by correspondent or intermediary banks.
- Premature-closure charges for a term deposit, if applicable.
- The bank’s conversion margin and the executable customer exchange rate for your transfer.
- The net amount expected to arrive after all fees and deductions.
Compare the same amount, currencies, transfer route and quote date. A headline account fee alone will not show what a transfer costs end to end.
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Is interest on a GIFT City account tax-free?
“Tax-free” is too broad. The Income Tax Department’s guidance lists exemptions for specified kinds of interest, including certain interest on foreign-currency deposits and deposits with offshore banking units. It also describes taxable-interest categories and notes that a Double Taxation Avoidance Agreement (DTAA) may provide for no tax or a lower rate where the treaty applies. The result depends on the exact product, the classification of the income, your tax residence for the relevant period and applicable treaty or reporting rules. The guidance does not establish that every product marketed as a GIFT City account is exempt for every holder, or settle tax obligations in another country.
The department’s page, accessed in 2026, also gives 4% and 5% rates for specified interest cases involving non-residents or foreign companies and qualifying borrowings or bonds. Those are not general tax rates for interest on GIFT City account deposits.
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As one separate example of the distinction between interest and charges, Central Bank of India’s page displayed a 2.50% rate for its USD Cent Global Savings Account when accessed in 2026. That is a bank-specific advertised interest rate, not a fee or market benchmark; the bank says rates can change, so confirm the current rate and product terms directly.
What if you transfer the money back to India?
Moving money to India does not, by itself, answer whether tax is due. The relevant questions include what the payment represents—such as principal or interest—how the income is classified, your tax residence for the period and whether a treaty or reporting requirement applies. The official material described here does not determine the tax outcome for an individual’s particular remittance, so do not treat the account’s location or its foreign-currency denomination as proof that the income is exempt.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsThe Income Tax Department’s accounting standards for income computation address foreign-currency transactions: they provide for initial recording at the rate prevailing on the transaction date, with an approximation option in qualifying cases, and conversion of foreign-currency monetary items at the closing rate subject to exceptions and applicable provisions. These business-income computation rules do not establish an automatic taxable gain on every personal currency movement or settle the tax treatment of an individual account. For a specific return or remittance, confirm the product and income classification with a qualified tax adviser familiar with your residence and circumstances.
How do exchange rates and transfer charges affect the total?
A balance held in USD remains in USD while it is not converted. That avoids an INR conversion at that stage; it does not guarantee that a later conversion or transfer will use a market reference rate or incur no charges. The customer rate, explicit remittance fee and any correspondent-bank deductions can all affect the amount credited. The reviewed bank and tax materials do not disclose a current customer FX spread or complete transfer charge for a particular account.
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How to compare an actual transfer quote
- Ask the bank for its executable customer rate, not only a reference or indicative market rate.
- Record the currencies, transfer route, quote time and amount being sent.
- Confirm the amount debited and the explicit fee charged by the sending bank.
- Ask whether intermediary or correspondent banks may deduct fees and whether the recipient bank charges separately.
- Compare the net amount expected to arrive, not just the displayed exchange rate.
Foreign-currency accounting rules show why conversion rates matter in some income computations, but they do not reveal an individual bank’s current FX margin. Get a live, account-specific quote before deciding whether to convert or transfer.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What account protections and eligibility conditions should you check?
Federal Bank’s account-opening form states that IBU/GIFT City deposits “will not be covered under any deposit insurance.” Treat that as a material product-specific condition and review the complete terms for the account you are considering.
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The same form asks customers to notify the bank if their NRI status changes; it says the account may be redesignated or closed at the bank’s decision. Eligibility and operation can also depend on the holder’s status and applicable rules. IFSCA’s notices index lists a circular dated 23 June 2025 amending directions for IBUs operating foreign-currency accounts of Indian resident individuals under the Liberalised Remittance Scheme (LRS). Verify current eligibility and operating terms with the bank and regulator rather than assuming a rule or account condition has remained unchanged.
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