They are indeed lent out, but mostly in very safe, boring investments, that don't really generate economic activity (mortgages). This is by design, as we generally don't want banks going pear-shaped, and taking people's savings with them!
If your money is used to generate meaningful economic activity, that means you're investing it into something like stocks (Which anyone can do by opening a Schwab, or a Vanguard, or a whomever account) - which will beat inflation, but on the short-and-medium term, are not a safe investment.
