How You Should Properly Invest Your Surplus Cash After A Successful Trip From The Gulf

In the quest to earn more money to support a financially stable life many people go abroad to lands of better opportunities. There are many Indian expatriates in the Gulf countries, who have accumulated sizable amounts of savings in their bank accounts.

Mr. Jiyani, who had been working in Dubai for over a decade now, has no concerns regarding outstanding home loans or insurance premiums. All these have been settled as he is now retired and looks forward to enjoying life rather than worry about making money.

Though he had moved to the Gulf a little late in his career, the move turned successful and he had INR 50 lakh accumulated in his savings account. Due to his old school mentality, he was highly risk-averse and reluctant to invest in any instrument other than fixed deposits or leaving it in his savings account.

The savings account

Savings accounts at the banks earn the least of interest and thus it is advisable to maintain only the bare minimum amount that you need for your short-term regular expenses. The surplus amounts should be carefully planned and invested in better-earning investment instruments.

It has been observed that the savings account interest rate is lower than the inflation and thus, the funds in the savings account would deplete soon instead of earning and growing your wealth.

The risk with equities

With all investments, there is always a level of risk involved. Fixed deposits (FDs) at the bank are the safest investment instrument with virtually zero risk and guaranteed returns. The interest rate is only higher than that earned on the funds in the savings account.

Equity investments or stock market investments, on the other hand, are amongst the riskiest as well as the highest earning instruments. Stock markets are volatile due to economic and other conditions. There is a risk that you may lose your entire investment if you invest a lump sum in equities.

A wide spectrum of other investment instruments in between that have different levels of risk and relative earnings potentials are available. Government bonds, corporate bonds, mutual funds, real estate, gold, debentures are some such instruments.

Systematic Investment Plans (SIP)

Mutual funds are an investment instrument that mitigates the risk of direct equity investing while having the potential to maximize the returns. There is a variety of funds available in the market that is invested in various instruments with varying risk levels and earnings potential. These funds are also available for varied tenures.

SIP investments are ideal options if you are looking to invest small amounts on a regular basis. Here are three benefits of an SIP.

  1. Discipline

You get into the habit of regularly saving a fixed amount without facing any financial difficulties or liquidity crunches.

  1. Flexibility

Investing in SIP is flexible because you may invest monthly, quarterly, semi-annually, or annually as per your convenience. Furthermore, you may increase or decrease the amount based on your financial situation.

  1. Tax deductions

Certain funds like Equity-Linked Savings Schemes (ELSS) offer tax deductions according to section 80C of the Income Tax Act. Therefore, SIP investments in ELSS help reduce your tax liability thereby increasing your savings.


As the age old saying goes, you should not put all your eggs in the same basket, so is the fact with investments as well. Considering the fact that there is always a risk attached to the investment instrument, you should first work on minimizing the risk by investing in multiple different instruments.

If you have invested a portion in a high-risk instrument with the aim of growing your wealth sooner, then you should mitigate this risk by investing a reasonable amount in a low-risk or no-risk instruments. This ensures that you do not lose the entire capital.

Investing in SIP takes care of this diversification as the fund manager of these plans does it for you. In addition, since they are professionals in this field they would do it far more efficiently.

Systematic Transfer Plan (STP)

A Systematic Transfer Plan (STP) is used to stagger investments into equity funds. You invest a lump sum in an ultra-short or liquid fund. Over a period, a predetermined amount is regularly transferred to another scheme through a systematic transfer plan/STP. This method maintains risk-return balance and is beneficial in volatile markets.

You continue earning returns until your principalis invested in the liquid or short-term funds, which often exceeds the savings bank account interest rate. Secondly, it averages your investment cost by accumulating fewer units when the value is high and vice versa.

Choosing the right mix of instruments to invest in requires a lot of research and analysis. In order to do the same, you need to identify and prioritize your financial requirements and set your plan accordingly. You should use technologically advanced tools such as ARQ, a proprietary investment engine in  Angel Wealth’s mobile application, offers efficient research and analysis. ARQ uses advanced algorithms and quants to offer machine-based customized investment recommendations. Download the Angel Wealth mobile app on your smartphone to experience this technological revolution in investment planning.

Comment here