Kisan Vikas Patra

Introduction

Kisan Vikas Patra (KVP) is a popular savings scheme in India, designed to encourage long-term investments among individuals. Launched by the Indian government, this scheme aims to provide a secure and profitable investment option, especially for those in rural areas. In this comprehensive guide, we will explore all aspects of KVP, including its features, benefits, and how to invest in it.

What is Kisan Vikas Patra?

The Government of India offers the Kisan Vikas Patra through post offices and select banks. It was first introduced in 1988, discontinued in 2011, and then reintroduced in 2014 with revised features to make it more investor-friendly. It provides a safe and reliable investment option, guaranteeing the doubling of the invested amount over a specified period.

Key Features of Kisan Vikas Patra

1. Interest Rates: The government sets the interest rate on the Kisan Vikas Patra scheme and revises it periodically. As of the latest update, the interest rate stands at 7.7% per annum, compounded annually.
2. Investment Tenure: The tenure for KVP is 124 months (10 years and 4 months), during which the invested amount doubles.
3. Minimum Investment: The minimum investment required to purchase a KVP certificate is Rs. 1,000. There is no maximum limit on the investment.
4. Availability: You can purchase KVP certificates from designated post offices and select banks across India.
5. Transferability: You can transfer KVP certificates from one person to another, making it a versatile investment option.
6. Nomination Facility: Investors can nominate one or more beneficiaries for their KVP investment, ensuring a smooth transfer of the corpus in the event of the investor’s demise.
7. Premature Withdrawal: You can withdraw KVP prematurely after a lock-in period of 2 years and 6 months, subject to certain conditions.

Benefits of Kisan Vikas Patra

1. Guaranteed Returns: The Kisan Vikas Patra scheme offers guaranteed returns, as it is backed by the Government of India. This makes it a secure investment option.
2. Doubling of Investment: The scheme ensures the doubling of the invested amount over the tenure, providing substantial returns.
3. Easy Availability: KVP can be easily purchased from post offices and select banks, making it accessible to a wide audience.
4. Transferability: The ability to transfer KVP certificates adds flexibility to the investment.
5. Tax Benefits: Although the tax authorities will tax the interest earned on KVP, you can claim the amount invested as a deduction under Section 80C of the Income Tax Act, 1961.

How to Invest in Kisan Vikas Patra

1. Visit a Post Office or Bank: KVP certificates are available at designated post offices and select banks. Visit the nearest branch to initiate the investment.
2. Fill Out the Application Form: Obtain and fill out the KVP application form, providing necessary details such as name, address, and amount to be invested.
3. Submit Required Documents: Along with the application form, submit identity proof (Aadhaar card, PAN card, etc.) and address proof (utility bills, passport, etc.).
4. Make the Payment: Pay the amount you wish to invest. Payment can be made through cash, cheque, or DD.
5. Receive the KVP Certificate: Upon successful processing of the application, you will receive the KVP certificate, which serves as proof of your investment.

Kisan Vikas Patra Interest Rate

The interest rate for the KVP scheme is determined by the Government of India and is subject to change periodically. As of now, the interest rate is 7.7% per annum, compounded annually. This competitive interest rate ensures the doubling of the investment amount over the specified tenure of 124 months.

Kisan Vikas Patra Calculator

A KVP calculator is a useful tool to estimate the maturity value of your investment. By entering the invested amount and the KVP interest rate, the calculator provides the exact amount you will receive upon maturity. This helps investors plan their investments effectively.

Kisan Vikas Patra Post Office Withdrawal Rules

While KVP Withdrawal Rules is a long-term investment scheme, it allows for premature withdrawal under specific conditions:

1. Lock-In Period: KVP has a lock-in period of 2 years and 6 months. No withdrawal is permitted before this period.
2. Premature Withdrawal: After the lock-in period, premature withdrawal is allowed. However, the interest earned will be adjusted accordingly, and a penalty may be applicable.
3. Maturity: Upon maturity, the investor can withdraw the entire amount by submitting the original KVP certificate along with a duly filled withdrawal form at the issuing post office or bank.

Kisan Vikas Patra vs. Other Saving Schemes

Kisan Vikas Patra vs. Fixed Deposits (FDs):

• Interest Rates: KVP generally offers higher interest rates compared to FDs.
• Security: Both are secure investment options, but KVP is backed by the government.
• Tenure: FDs offer flexible tenures, while KVP has a fixed tenure of 124 months.

Public Provident Fund (PPF) Vs Kisan Vikas Patra:

• Interest Rates: PPF interest rates are slightly lower but offer tax-free returns.
• Tax Benefits: PPF offers better tax benefits under Section 80C and interest earned is tax-free.
• Liquidity: KVP allows for premature withdrawal after 2.5 years, whereas PPF has a longer lock-in period with partial withdrawals allowed after 5 years.

Also Read: Jeevan Pramaan Patra

Importance of Kisan Vikas Patra

KVP plays a crucial role in promoting savings among individuals, especially in rural areas. It offers a secure and profitable investment avenue with guaranteed returns, making it an attractive option for risk-averse investors. The scheme also helps inculcate a savings habit and ensures financial security for the future.

Conclusion

Kisan Vikas Patra is an excellent savings scheme for individuals seeking a secure and profitable investment option. With its guaranteed returns, ease of investment, and government backing, KVP stands out as a reliable choice for long-term financial planning. Whether you are a seasoned investor or a beginner, KVP offers a simple and effective way to grow your savings.