The Kisan Vikas Patra (KVP) scheme was introduced by the Government of India Postal Department in 1988. Though initially targeted at farmers to promote saving habits, over time it has become popular with non-farmer investors too. KVP certificates can be purchased from designated post office branches and banks with a minimum investment of Rs 1000.
KVP certificate has a tenure of 115 months and offers guaranteed returns to depositors. On maturity, the invested amount doubles. KVP thus provides citizens, especially in rural areas, a safe long-term investment option and assured returns after the fixed term.
The interest rate offered on Kisan Vikas Patra is revised quarterly by the Finance Ministry. As announced recently, KVP certificates will earn 7.5% annual interest from October 1, 2022, onwards, applicable for the third quarter of the financial year 2023-24. This rate ensures the money invested doubles in 115 months or 9 years, 7 months. Here are the highlights of Kisan Vikas Patra:
|7.5% (compounded annually)
|Minimum: Rs. 1,000
Maximum: No maximum limit
Here are the eligibility criteria for investing in the Kisan Vikas Patra scheme in point form:
To purchase a Kisan Vikas Patra certificate, an applicant needs to submit copies of these documents for the KYC process:
Investments made in Kisan Vikas Patra certificates do not qualify for tax benefits under Section 80C. While KVP investments themselves are not eligible for income tax deductions, the assured returns offered are exempt from any tax. After the 115-month maturity period, investors can withdraw the full proceeds without deduction of any TDS.
Kisan Vikas Patra certificates are issued in three types catering to different investor needs:
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To transfer a Kisan Vikas Patra certificate from one person to another, the account holder needs to submit a written request at the post office where it was purchased.
The transfer is permitted only in these scenarios:
Kisan Vikas Patra certificates have a lock-in period of 30 months. However, investors can only withdraw maturity proceeds after the completion of the full tenure of 115 months. Premature withdrawals are not allowed, except in certain cases. On premature closure, because of the demise of the account holder or a court order, withdrawal is permitted before maturity. Barring these exceptional situations, investors have to hold the KVP certificate until the end of the 115-month term to receive their returns.
Here are the steps to encash Kisan Vikas Patra certificates:
Here are the key points about availing a loan against Kisan Vikas Patra certificates:
Investing in Kisan Vikas Patra through the online mode involves these steps:
Step 1: Download the KVP application form (Form A) online from India Post's website or portal.
Step 2: Fill in all required personal and investment details in the form accurately.
Step 3: If investing through an agent, also complete and attach the agent details form (Form A1).
Step 4: Submit a copy of identity proof (Aadhaar, PAN, etc) for KYC verification.
Step 5: Pay the deposit amount online via net banking or other payment modes.
Step 6: Once documentation is verified and funds are credited, the KVP certificate will be dispatched through email or post to the registered address.
The nomination facility in Kisan Vikas Patra is straightforward. Investors have to get the nomination form from the post office branch and submit it duly filled along with the investment application. If the nominee is a minor, their date of birth and copy of their birth certificate are required to be attached with the nomination form. This allows smooth transfer of the KVP proceeds to the nominee on the death of the account holder.
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It is a savings certificate with a fixed tenure of 115 months that provides guaranteed returns to investors. The interest rate is set by the government quarterly.
Key benefits are assured returns, capital protection, regular income and tax free maturity.
The current interest rate is 7.5% p.a. (for Q3 FY 2023-24)
Minimum Rs 1,000, no maximum limit. Can invest in multiples of 1k, 5k, 10k.
Premature closure is only permitted in case of death or by court order.
Yes, it is backed by a government guarantee so principal is secure.
Easily available at designated post office branches.
Indian citizens above 18 years can invest. NRIs are not allowed.
There are 3 types: Single holder, Joint A and Joint B certificates.
No, NRIs don't qualify to invest in KVP.
Yes, KVP is an ideal option for conservative investors saving for long-term goals.
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