Money multiplication

Way back in 1977, I was teaching in one of the constituent colleges of Rajasthan University in Alwar. I am reminded of an amusing incident relating to the bank in which salary was being credited into the savings bank account of staff members. 

One day, an employee of the bank met me at the market and requested me to meet him at the bank as he wanted to discuss something important. 

I lost no time and on the following day made it a point to see him in his office. While sipping coffee at ease, the bank employee finally came to the point: “Did you ever apply for a Fixed Deposit (FD) of Rs100 for five years?”

“What?” I exclaimed: “FD for Rs100 for five years! Do you think I am a naive?” 

“We were also wondering what befell upon professor and prompted him to go in for this trivial and infrequent kind of investment,” explained the employee. 

I had no other option but to request the man to fetch and show me the accounts ledger in which my request for FD had been entered. 

The record-book was procured and to the surprise of both of us, it was not a request for FD but an application for opening Recurring Deposit (RD) for five years at the rate of Rs100 per month.

The bank employee modestly admitted the mistake of the bank and refunded to me the entire amount.

In investments, big capital brings in big returns, while the smaller one remains inconsequential. One hundred rupees would become two hundred in five years, where as Rs200,000 would shoot up to be Rs400,000 in the same period. 

Perhaps, it has been rightly pointed out that, “Money pulls money.”