How Rs 10 Lakh Can Either Grow to Rs 24 Lakh or Skyrocket to Rs 2 Crore: A CA Explains the Smart Money Shift

Many of us find comfort in watching our bank balance steadily increase. That sense of safety can be reassuring, but it can also create a false sense of security. What most people don’t realize is that the money sitting in your savings account doesn’t just lie idle—it is actively working, but primarily for the bank, not for you.

Chartered Accountant Nitin Kaushik recently shed light on this reality in a way that makes you rethink how savings grow, why they often remain stagnant, and how a smarter strategy can transform your financial future.

Your Savings Aren’t Just Sitting There

According to CA Nitin Kaushik, the money you deposit in a bank doesn’t stay in one place. Banks operate using a system called fractional reserve banking, which means they keep only a small fraction of deposits as liquid cash, while the rest is lent out in the form of loans. Your Rs 10 lakh, for example, might see only 4-6% remain in the bank, while the rest is circulated through home loans, business loans, car loans, and high-interest credit cards. Essentially, your money gets recycled multiple times, generating significant revenue for the bank.

The Numbers Tell a Different Story

While a savings account offers around 2.5–3% interest annually, inflation usually outpaces this, eating into the real value of your savings. In contrast, banks lend your money at much higher rates, creating profits far beyond what they pay you as interest. This system ensures that while your balance appears safe and stable, its purchasing power diminishes quietly over time.

The uncomfortable truth about where your saved money really goes…

Most people believe the bank is a “safe home” for their money.

That the cash lying peacefully in their account is protected, untouched, waiting for them.

That’s comforting…

But the real story is far more… pic.twitter.com/zJ3D6pvYH6

— CA Nitin Kaushik (FCA) | LLB (@Finance_Bareek) December 11, 2025

The Mindset Gap Between Savers and Investors

Kaushik also emphasizes a crucial mindset difference: most people are taught to prioritize saving first and investing later, while banks focus on multiplying money from day one. This difference in approach explains why savings alone rarely lead to wealth accumulation. Protecting money is important, but limiting yourself to savings prevents you from tapping into compounding growth.

Two Potential Outcomes for Rs 10 Lakh

To illustrate, consider Rs 10 lakh placed in a savings account earning 3% annually. Over 30 years, it would grow to roughly Rs 24 lakh—hardly life-changing. On the other hand, if the same money is invested in instruments that offer around 11% long-term returns, it could grow to more than Rs 2 crore in the same period. The principle of compounding is the same in both cases, but the strategy makes a dramatic difference.

Balancing Safety and Growth

Kaushik isn’t against saving—having an emergency fund and financial safety net is crucial. However, relying solely on savings makes it difficult to achieve long-term wealth. His advice is to divide your money wisely: keep a portion easily accessible for emergencies, and put the rest into growth-oriented assets that can compound consistently over time. Understanding how idle capital works in the banking system can inspire a shift from a purely protective mindset to one focused on wealth creation.

Disclaimer: This article is for informational purposes only and is not intended as financial or investment advice. Investment outcomes may vary based on market conditions and individual circumstances.