Kisan Vikas Patra Premature Withdrawal

Kisan Vikas Patra (KVP) is a popular savings certificate scheme introduced by India Post in 1988. The unique feature of KVP is that the initial investment doubles in just 115 months (9 years and 7 months).

Kisan Vikas Patra can be opened with a minimum of ₹1000 by adults for themselves, on behalf of minors, trusts, or jointly by two adults. There is no maximum limit on the investment. However, there is a lock-in period of 2 years and 6 months, and premature withdrawals before this period are subject to additional penalties.

This webpage will give a detailed explanation of the premature withdrawal of the Kisan Vikas Patra scheme.

Starting January 1st, 2024, the interest rate of KVP is 7.5% compounded annually. The amount invested will double in 115 months, equivalent to 9 years and 7 months.

Conditions For Premature Closure of Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP), a popular savings scheme offered by India Post, can be prematurely closed before its maturity under certain specified conditions.

  • Death of account holder: In a single account, the KVP can be prematurely closed upon the death of the account holder. In a joint account, the KVP can be prematurely closed upon the death of any or all joint account holders.
  • Forfeiture by a pledgee: If the KVP certificate is pledged to a Gazette officer, it can be prematurely closed upon forfeiture by the pledgee.
  • Court order:The KVP can be prematurely closed if ordered by a court.
  • After lock-in period: The KVP can be prematurely closed after a lock-in period of 2 years and 6 months from the date of deposit.

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Key Points to Note Before Premature Withdrawal of Kisan Vikas Patra

Before prematurely withdrawing a Kisan Vikas Patra, there are a few important points to consider:

  • The lock-in period must be completed before encashment.
  • After lock-in, the amount can be encashed in 6-month intervals based on the amount.
  • The interest rate at the time of each encashment will be considered.

Calculation of KVP Premature Withdrawal Value

The maturity amount will depend on the interest rate and the tenure. We can check the maturity amount with an example of ₹1000.

The following table displays the KVP premature closure value with an initial deposit of ₹1000.

Period from Account Opening to Premature Closure Amount Payable (in Rupees)
2.5 years - Less than 3 years ₹1173
3.5 years - Less than 4 years ₹1211
Three and a half years but less than four years ₹1251
Four years but less than four and a half years ₹1291
Four and a half years but less than five years ₹1333

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Note: The amounts listed may change depending on the fluctuation of the interest rate on KVP. For the most up-to-date values, please consult the government announcement.

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Payment Upon Maturity

Upon submission of a Form-2 application to the accounts office, the account holder will receive the maturity amount. The duration of the deposit's maturity under this Scheme will be determined by the prevailing interest rate at the time of account opening.

Payment on the Death of Account Holder

  • If the account holder passes away, the deposit will be paid to the nominated nominee(s) or legal heir(s).
  • If there are fewer than three remaining nominees or legal heirs, they can choose to continue the account and receive the deposit amount and interest at maturity, as per the scheme's terms.
  • For a joint account: The surviving account holder(s) will be recognized as the owner(s) of the account upon the death of one or more account holders. The surviving account holder(s) can choose to keep the account open or close it.

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Frequently Asked Questions

Yes, you can withdraw your Kisan Vikas Patra investment before maturity, but only under certain circumstances.

Premature withdrawal is allowed in specific cases like the Death of the account holder, Court Order, Forfeiture by a government official pledgee (if the loan defaulted), and after 2 years and 6 months from the date of deposit (penalty applies).

Yes, there is a penalty for early withdrawal. You'll receive a reduced interest payout compared to holding the account till maturity. The penalty amount depends on how long you hold the investment.

Visit your nearest post office and submit a prescribed application form for premature closure.

The documents typically required include:

  • KVP premature closure application form
  • Original KVP certificate
  • KYC documents (proof of identity and address)
  • Supporting documents for the reason for withdrawal (e.g., death certificate in case of account holder's demise)

Processing time can vary depending on the post office, but it generally takes a few business days.

Yes, you'll receive interest on your investment, but it will be calculated at a lower rate compared to the prevailing rate for the holding period, resulting in a lower payout.

Yes, a minor's KVP account can be withdrawn prematurely by the guardian under specific conditions, such as the death of the account holder or a court order.

Yes, there's a lock-in period of 2 years and 6 months from the date of deposit. You cannot withdraw before this period without penalty.

Yes, if one of the joint account holders passes away, the surviving account holder(s) or the nominee (if appointed) can withdraw the account prematurely.

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