Kisan Vikas Patra (KVP) is a savings scheme available at India Post Offices in the form of certificates. It is a fixed rate small savings scheme to double your investment after a predetermined period of time (124 months in the currently available issue). As per current rules, KVP certificates can be purchased from select public sector banks as well as from India Post Offices.
- The applicant has to be an adult resident of India.
- A parent/guardian may invest on behalf of a minor.
- Hindu Undivided Families (HUFs) and Non-Resident Indian (NRIs) cannot invest in Kisan Vikas Patra.
1. KVP Certificate can be purchased by
(i) A single adult
(ii) Joint A Account (Maximum 3 adults). This is payable to both the individuals or the one who survives till maturity
(ii) Joint B Account (Maximum 3 adults). This is paid to either of the owners or to the one who survives till maturity
(iv) Minor above 10 years of age: An adult on behalf of a minor or a guardian on behalf of a person of unsound mind
2. The Minimum Deposit value for KVP
KVP Account can be opened with a minimum initial deposit of Rs. 1000. One can invest an amount in the multiples of Rs. 100. However, certificates are currently available in denominations of Rs. 1,000, Rs. 5,000, Rs. 10,000, and Rs. 50,000. There is no maximum limit on KVP investments.
3. From where to buy KVP Certificate?
Certificates are available at all India Post Offices and KVP Application forms are available online as well, as at India Post Offices and select banks.
4. The Maturity Period of KVP
KVP maturity period may change based on rate changes made by the Ministry of Finance. However, the maturity value is pre-printed on the certificate issued.
5. Transfer Facility of KVP
Kisan Vikas Patra can be easily transferred from one Post Office/bank to another as well as from one person to another.
6. Interest Rates associated with the scheme
KVP Interest rate may change periodically based on the announcements made by the Finance Ministry. The current interest rate applicable to KVP is 6.9% per annum which will double your investment in 124 months
7. Premature Withdrawal
If you have an emergency financial requirement, you can encash this money prematurely after two and half years from the date of issuance with some amount of interest on the same.
The following are some of the benefits of the Kisan Vikas Patra Scheme:
• 100% Security – We all want security on the investments that we make. The Kisan Vikas Patra scheme gives us just that. Since it is a Government-owned scheme, the returns are fixed and secure. Since the amount that you will receive is declared on the certificate, you will have security on the investment that you have made and the amount that you will receive at the end of the term.
• Collateral for Loan – The Kisan Vikas Patra certificate can be used as collateral while applying for a loan. Most banks and financial institutions accept this certificate as collateral before issuing you any loan.
• Non-Transferable – The benefits of Kisan Vikas Patra is availed only by the holder of the Kisan Vikas Patra certificate. To have this transferred to another name, the permission of the Postmaster is required along with certain other formalities.
• Tax Benefits – At the time of encashment or disbursal of the Kisan Vikas Patra scheme, tax is not deducted at source; it is TDS exempted and paid in full to the holder. However, it is the responsibility of the certificate holder to pay the taxes on the interest accrued over the term of the scheme. This scheme is completely exempted from Wealth Tax with fixed and secured returns.