Keeping your money in a savings account may feel like the safest financial decision. But according to chartered accountant Nitin Kaushik, what appears safe today could quietly become one of the biggest threats to your long-term wealth. In a recent post on X, Kaushik warned that accepting low single-digit returns on long-term savings allows inflation to steadily erode purchasing power, making it harder to build lasting wealth.

The hidden cost of low returns

Kaushik argued that many people leave their long-term capital in low-yield savings accounts under the belief that they are protecting their money. However, he believes the opposite is often true. According to him, earning around 3% annually means your money grows so slowly that inflation gradually reduces what it can actually buy over time.

He described this as a guaranteed way to let inflation chip away at wealth while creating the illusion of financial security.

The Rule of 72 explained

To illustrate his point, Kaushik referred to the widely used Rule of 72, a simple formula that estimates how long it takes for an investment to double. Using this rule, money earning a 3% annual return would take roughly 24 years to double in value. In comparison, Kaushik noted that shifting the same amount into an asset class delivering a steady 10% annual return would reduce the doubling period to just 7.2 years.


The difference, he explained, can dramatically change a person's net worth over the course of a decade or longer.

Why inflation matters

Even though money in a savings account may appear secure, inflation steadily reduces its purchasing power. If investment returns fail to outpace inflation over the long term, the real value of those savings gradually declines.
Kaushik believes this is why investors should think beyond nominal returns and consider how effectively their money is growing after accounting for inflation.

Focus on long-term wealth creation

Kaushik encouraged investors to avoid leaving long-term capital sitting in what he described as "lazy" low-yield accounts simply because they seem safe. Instead, he suggested considering growth-oriented assets that have the potential to generate higher long-term returns while aligning with an individual's financial goals and risk tolerance.


According to Kaushik, the greatest financial risk is not short-term market fluctuations but reaching retirement without enough wealth to maintain financial independence. He argued that allowing long-term savings to grow can make a significant difference to future financial security.