Kisan Vikas Patra Yojana has become very popular among buyers who want safe and profitable ways to save money. This government-backed programme provides a special chance for people to invest their hard-earned money and make good returns. We will go into great depth about the Kisan Vikas Patra Yojana in this extensive guide, including its features, advantages, eligibility requirements, and application procedure.
What is Kisan Vikas Patra Yojana?
Kisan Vikas Patra (KVP) is a small savings scheme offered by the Government of India. It is a safe and secure investment option that offers guaranteed returns. KVP certificates can be purchased from India Post offices and selected public sector banks.
Key Features of Kisan Vikas Patra Yojana
- Tenure: The tenure of KVP is 115 months (9 years and 5 months).
- Interest rate: The interest rate on KVP is fixed and is announced by the Government of India every quarter. The current interest rate on KVP is currently 7.5% per annum (Q3 FY 2023-24). The interest rate is compounded semi-annually.
- Investment amount: The minimum investment amount in KVP is Rs. 1,000 and there is no upper limit.
- Maturity: KVP certificates mature after 115 months (9 years and 5 months). The maturity value of the certificate is double the investment amount.
- Premature withdrawal: Premature withdrawal from KVP is allowed after 2.5 years. However, the interest rate on premature withdrawal will be lower than the regular interest rate.
- Tax benefits: The interest earned on KVP is taxable. However, the maturity amount is exempt from income tax.
Benefits of Kisan Vikas Patra Yojana
- Safe and secure investment: KVP is a government-backed investment scheme, which means that the investment is safe and secure.
- Guaranteed returns: KVP offers guaranteed returns on the investment. The investor knows how much money they will get at the time of maturity, regardless of the market conditions.
- Easy to invest: KVP can be purchased from any post office or select public sector banks.
- Flexible investment: KVP is a flexible investment scheme. The investor can invest any amount they want, and they can open multiple accounts.
- Liquidity: KVP can be prematurely encashed after 2.5 years, but there will be a penalty.
Who should invest in Kisan Vikas Patra Yojana?
KVP is a good investment option for people who are looking for a safe and secure way to grow their money over the long term. It is also a good option for people who want to invest a small amount of money on a regular basis.
Eligibility criteria for investing in Kisan Vikas Patra Yojana
To invest in the Kisan Vikas Patra Yojana, you must meet the following eligibility criteria:
- Any individual can open a KVP account.
- Parents or legal guardians can invest on behalf of minors.
- There is no minimum or maximum age limit for investing in KVP.
- Trusts and HUFs (Hindu Undivided Families) are not eligible to invest in KVP.
- You can open any number of KVP accounts.
Application Process
Investing in the Kisan Vikas Patra Yojana is a straightforward process. Follow these steps to get started:
- Visit your nearest post office.
- Fill out the KVP application form.
- Provide the required KYC (Know Your Customer) documents, which may include identity and address proof.
- Make the initial investment amount.
- Your KVP certificate will be issued, and you will be provided with a passbook.
Encashing Kisan Vikas Patra certificates
To encash KVP certificates, you need to visit the post office or bank where you purchased the certificates. You will need to submit the KVP certificates and a completed KVP encashment form. The post office or bank will pay you the maturity value of the certificates.
Kisan Vikas Patra vs Fixed Deposits
A Fixed Deposit is referred to as a financial instrument regularised by the banks or NBFCs, providing higher interest rates to investors than saving accounts. Here is a basic comparison between KVP and FD:
| Parameters | KVP | FD |
| Investments | Minimum investment of Rs.1000 required whereas there is no capping on maximum investment | Minimum- Rs. 500Maximum- Not Limited |
| Rate of Interest | 7.5% | Differs from bank to bank |
| Maturity | 9 years 7 months (115 months) | 10 years. However, subscribers can withdraw money after 7 days from the date of investment |
| Tax Treatment | Returns on KVP are taxable | Tax saver FDs are tax exempted for up to Rs.1.5 Lakh under Section 80 (C) |
| Lock-in periods | Lock-in period of 2 and a half years | No lock-in period. The tenure of Fixed deposits ranges from 7 days to 10 years |
| Premature Withdrawals | Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 124 months to get best returns | Money can be withdrawn as and when the subscriber wants, after 7 days |
Kisan Vikas Patra vs NSC
National Savings Certificate is an Indian Government Savings bond used as an instrument of small savings and income tax saving scheme in India. Given below is a basic comparison between Kisan Vikas Patra and NSC:
| Parameters | KVP | NSC |
| Investments | Minimum- Rs.1000Maximum- No limit | Minimum- Rs.100Maximum- Rs.1,50,000 |
| Rate of Interest | 7.5% per annum | 7.7% per annum |
| Taxation Policy | Returns on KVP are taxable | Enjoys tax benefits and exemption under Section 80(c) |
| Liquidity | Lock-in period of 2.6 years only | Lock-in period of 5 or 10 years |
| Premature Withdrawal | Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 115 months to get best returns | Withdrawals before maturity are very difficult and restricted |
| Loans | Can be used as a guarantee to take loans for housing etc | Can be used as a guarantee to take loans for housing etc. |
Kisan Vikas Patra Interest Rates: Historical
| Time Period | KVP Interest Rate |
| Q2 FY 2023-24 | 7.5% |
| Q1 FY 2023-24 | 7.5% |
| Q4 FY 2022-23 | 7.2% |
| Q3 FY 2022-23 | 7.0% |
| Q2 FY 2022-23 | 6.9% |
| Q1 FY 2022-23 | 6.9% |
| Q4 FY 2021-22 | 6.9% |
| Q3 FY 2021-22 | 6.9% |
| Q2 FY 2021-22 | 6.9% |
| Q1 FY 2021-22 | 6.9% |
| Q4 FY 2020-21 | 6.9% |
| Q3 FY 2020-21 | 6.9% |
| Q2 FY 2020-21 | 6.9% |
| Q1 FY 2020-21 | 6.9% |
| Q4 FY 2019-20 | 7.6% |
| Q2 FY 2019–20 | 7.6% |
| Q1 FY 2019–20 | 7.7% |
| Q4 FY 2018-19 | 7.7% |
| Q3 FY 2018-19 | 7.7% |
| Q2 FY 2018-19 | 7.3% |
| Q1 FY 2018-19 | 7.3% |
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Conclusion
Kisan Vikas Patra Yojana is a safe and rewarding investment option for people of all ages and income groups. It offers guaranteed returns and flexibility to investors. If you are looking for a long-term investment option to build wealth, KVP is a good choice.
How much will I get after depositing ₹1,000 in a post office for 3 years?
The returns on ₹1,000 in a post office after 3 years depend on the specific scheme’s interest rate.
What is the interest rate on a Kisan Vikas Patra in a post office?
The interest rate on a Kisan Vikas Patra (KVP) varies and is subject to change by the government. It’s typically compounded annually.
What is the 5-year post office savings scheme?
The 5-year post office savings scheme is often the Post Office Monthly Income Scheme (POMIS).
Which FD scheme is the best in the post office?
The best FD scheme in the post office depends on your financial goals, e.g., Post Office Time Deposit or Senior Citizens Savings Scheme (SCSS).
What is the best scheme in the post office?
The best post office scheme varies based on your financial goals, e.g., PPF, SCSS, or Post Office Recurring Deposit.
Will the post office interest rates increase in 2023?
Whether post office interest rates will increase in 2023 depends on government policies and market conditions.
How many years does it take for money to double in a post office savings scheme?
Time to double your money in a post office savings scheme depends on the scheme’s interest rate and can be estimated using the Rule of 72.
How much interest is earned on a ₹200,000 FD in one year?
The interest earned on a ₹200,000 FD in one year depends on the specific FD scheme’s interest rate. Use the formula: Interest = Principal (₹200,000) × Interest Rate × Time (in years) for exact calculations.
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