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- January 15, 2026
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Dollar Accounts in India: A Feature, Not a Fix
For many Indian Americans, keeping money in India feels natural.
Family connections.
Possible future plans.
A sense of familiarity.
But from a financial perspective, one issue quietly dominates all others:
The steady depreciation of the Indian Rupee against major global currencies—especially the U.S. Dollar.
For someone earning, saving, and planning long-term in dollars, this currency mismatch can slowly but meaningfully erode wealth. Even “safe” returns in India can look very different once converted back to dollars years later.
To address this concern, the Indian government introduced foreign currency–denominated accounts for NRIs.
These are often casually referred to as “dollar accounts”, but that label is incomplete.
These Are Not Just USD Accounts
While U.S. dollars are the most commonly discussed option, GIFT City foreign currency accounts can be held in multiple currencies, including:
- USD
- GBP
- EUR
- JPY
- Other approved foreign currencies
The idea is simple:
Allow NRIs to park money in foreign currency inside India, without converting it to INR.
This structure is primarily offered through institutions operating out of GIFT City, India’s international financial services hub.
A general overview of why NRIs explore foreign currency–denominated investments can be found here:
https://www.hdfclife-international.com/blog/why-nris-should-consider-dollar-denominated-investments/
The Obvious Question: Why Keep Foreign Currency in an Indian Bank?
For Indian Americans, this question comes up immediately.
Why hold USD (or any foreign currency) in India when:
- You already earn in USD
- You already bank in USD
- You already have access to world-class U.S. financial infrastructure
From a returns perspective, there is no clear advantage.
Interest rates on foreign currency fixed deposits in GIFT City are broadly aligned with U.S. money-market and short-term deposit rates.
There is widespread misinformation online suggesting returns of 4–6% as a unique benefit. That information is outdated. Those numbers reflected a period when U.S. interest rates themselves were elevated.
Here are the current fixed-deposit rates offered by ICICI Bank through its GIFT City platform:
https://www.giftcity.icici.bank.in/giftcity/fixed-deposit-rates-for-individuals
When compared objectively, these rates are comparable to U.S. alternatives—not superior.
So returns alone do not justify opening these accounts.
The Process Reality: Still Very Indian Banking
Even though GIFT City is positioned as modern and globally competitive, the account-opening experience still reflects Indian banking DNA.
A clear breakdown of the process is available here:
https://getbelong.com/blog/how-to-open-account-gift-city/
Two practical friction points stand out:
1. Notarization Is Mandatory
For non-face-to-face onboarding, documents must be notarized.
This alone introduces delays and complexity—especially for Indian Americans accustomed to fully digital onboarding in the U.S.
2. Source of Funds Must Be Proven
Applicants are required to furnish:
- Salary slips, or
- Six months of bank statements
This is non-negotiable.
The contrast is philosophical:
- Indian banking is designed to prevent fraud upfront, even at the cost of convenience
- U.S. banking is designed to maximize convenience, accepting that some fraud will occur and can be reversed
For someone used to updating addresses or opening accounts online in the U.S. without paperwork, even “simplified” GIFT City banking feels cumbersome.
So Who Are These Accounts Actually Useful For?
This is where the conversation becomes more nuanced.
1. NRIs in Countries Without Naturalization Pathways
For NRIs living in Middle Eastern countries, this structure can make far more sense.
In many of these countries:
- NRIs remain Indian citizens indefinitely
- Long-term residency does not lead to citizenship
- Eventually, most people return to India
For this group:
- Holding money in foreign currency
- Avoiding forced INR conversion
- Reducing exposure to rupee depreciation
…can be genuinely useful.
For them, these accounts function as a currency-risk management tool, not an investment optimization strategy.
2. Access to Select GIFT City Investment Products
Another limited use case is access to Alternative Investment Funds (AIFs) structured through GIFT City.
Some examples can be found here:
https://getbelong.com/tools/gift-city-mutual-funds/
These products allow foreign-currency investing into India-focused strategies without converting to INR.
However:
- The product universe is still very narrow
- You cannot invest directly in individual Indian stocks
- Liquidity and transparency vary widely
This is a niche offering, not a broad solution.
What About Indians Returning from the U.S.?
There may be a theoretical use case for Indians planning to return after decades in the U.S.—keeping part of their savings in USD within India.
But today, regulatory clarity is limited, and flexibility is uncertain. Anyone considering this route should proceed cautiously and seek professional advice.
The Bottom Line (An Honest Opinion)
Let’s be clear.
In my opinion, foreign currency–denominated accounts in India are not particularly useful for Indian Americans.
Indian Americans already have:
- Stable legal status
- Long-term dollar exposure
- Superior banking, investment, and regulatory infrastructure in the U.S.
For them, these accounts:
- Do not offer meaningfully better returns
- Add operational friction
- Solve a problem they largely don’t have
They make far more sense for:
- NRIs in countries without naturalization pathways
- Individuals who will eventually return to India
- Very specific investment access use cases
Understanding who a financial product is designed for is often more important than understanding the product itself.
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