USD Fixed Deposits at IFSC Banking Units

Yields. Current USD FD yields (as of mid-2026) range 4-5% depending on tenor and bank. 1-year FDs typically 4.5-5.0%; 3-year FDs 4.5-4.8% (slightly inverted curve reflecting expected rate cuts); 5-year FDs 4.3-4.6%. These yields exceed the 1-2% range available in US bank savings accounts, reflecting the IFSC operating premium plus the deposit-base concentration that IFSC banking units run. Compared to INR domestic FDs (currently 6.5-7.5% for major Indian banks), USD FDs deliver lower nominal yields but in USD denomination — meaningful for investors with future USD expenditure or seeking currency diversification. Tax treatment for resident Indians: interest income from USD FDs is taxable in India as foreign-source income at slab rates. There is no special tax exemption for IFSC USD FD interest — this is the same treatment as interest from any foreign-source FD. CA reporting in Schedule FSI (Foreign Source Income) of ITR-2 or ITR-3. Onboarding: investor approaches the IFSC banking unit's representative (typically through their existing Indian bank relationship or directly), completes KYC and FATCA/CRS forms, and remits USD via LRS to fund the FD. Documentation is digital where possible. Maturity: principal and accumulated interest can be repatriated to India (with INR tax at slab on the interest, no tax on principal) or retained in USD for future USD deployment.