3 Ways to Put Your Surplus Money to Use

Receiving a year-end bonus, a salary increment, or a cash gift from a loved one can be a wonderful feeling. However, putting this extra money to use is crucial. Storing surplus money in a bank savings account is a great start. While savings accounts are highly liquid and offer security, they also offer low returns that lose value in front of inflation. 

This is why it is important to consider other options that can offer higher returns. Read on to know what these are.

Direct equity

Investing in stocks can be one of the best strategies to grow your money over time. When you invest in the stocks of a company, you become a partial owner of the company. As long as the company grows, your money grows too. Direct equity investments can offer great returns over a long investment horizon. This is why they are ideal for young investors looking for a long-term investment option. 

However, investing in direct equity requires time and patience. It is also important to understand that investing in the stock market is an active form of investing where all decisions of buying and selling are taken by you. So, you must have sound knowledge of the market. Moreover, you need to assess your risk appetite and accordingly invest in large, mid, or small-cap companies in keeping with your goals. 

Gold ETFs

In India, gold holds an important cultural position and has traditionally been considered a viable investment option. But physical gold is not very liquid, so getting money at short notice can be cumbersome, with several deductions being involved.

With changing times, gold exchange-traded funds have gained popularity over physical gold. Gold ETFs are funds that invest in gold. They are open-ended Mutual Fund schemes and can be bought or sold on the stock exchange. One unit of a gold ETF is equivalent to one gram of physical gold. The purity of every unit is fixed at 99.5%. 

Gold ETFs can be more profitable than physical gold as they are not bound by geographical price changes. On the plus side, gold ETFs have a uniform price throughout the country and transacting in them is easy and hassle-free.

Mutual Funds

As opposed to direct equity, Mutual Funds follow a passive form of investing. A Mutual Fund pools in money from several investors and further invests it in different securities (stocks, bonds, etc.) Every Mutual Fund has a fund manager who takes decisions regarding buying and selling. The profits earned are then distributed among all investors after deducting certain administrative fees and costs.

Mutual Funds are of different types (such as equity Mutual Funds, debt Mutual Funds, and hybrid Mutual Funds) that cater to various risk appetites and financial objectives. They offer an advantage over direct equity as they do not require you to have any prior knowledge of the market. You also do not need to spend time evaluating the performance of the market. All decisions are taken by the fund manager on your behalf.

Mutual Funds can give good returns depending on the past performance, investment horizon, and type. They offer flexible modes of investment, such as a lump sum or via a Systematic Investment Plan (SIP). Opt for the one that suits you. The minimum SIP starts from just Rs 500, making Mutual Funds accessible to most people.

Additionally, investing in Mutual Funds is very easy and quick. All you need is a Demat Account, such as the HDFC Bank Demat Account, and you can manage your Mutual Fund investments seamlessly from the comfort of your home.

Why choose HDFC Bank Demat Account?

Regardless of the kind of investment you choose to invest your surplus money in, HDFC Bank Demat Account can be the perfect companion for you. Here’s why: 


  1. Paperless transactions with no documentation or signature

  2. Quick account opening process that takes just 5 minutes

  3. Ready-to-trade Demat Account number for immediate investing


  1. One account for multiple investments such as Mutual Funds, equity, IPOs, bonds, sovereign gold bonds, ETFs, and non-convertible debentures

  2. Option to invest in IPOs 

  3. Auto credit of dividends, interest, and refunds in your account

  4. Option to transfer your Demat Portfolio (DP) to HDFC Bank DP at no additional cost

  5. Digital loan against securities 

  6. Help in custody business for servicing PMS & FPIs as a Designated Depository Participant (DDP)

And a lot more!

Explore HDFC Bank and our Demat Account Click here facilities by clicking right here.

*Terms and conditions apply. This is an information communication from HDFC bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.