Kisan Vikas Patra Savings Scheme

Kisan Vikas Patra (KVP) is an investment scheme launched in 1988. It is a government initiative that encourages people to make small savings in long-term investment plans. Despite the scheme’s popularity, a government committee formed in 2011 believed that KVP could be misused for illegal deeds like money laundering, and thus it was discontinued. In 2014, Kisan Vikas Patra was relaunched with a few tweaks like making PAN cards mandatory for investments exceeding ₹50,000. The revised scheme also demands income proof if your investment crosses the threshold of ₹10 lakh.

Kisan Vikas Patra certificates are issued in Post Offices across India. It makes this scheme accessible to any Indian resident. You can obtain a certificate either individually, jointly, or in that of a minor’s name. The amount invested in KVP doubles up after 124 months from the investment date. Let us understand Kisan Vikas Patra interest rates, Kisan Vikas Patra maturity period, benefits, and more.

Rate of Interest for Post Office Savings Schemes

The below table provides the interest rates for various Post Office Savings Schemes.

Kisan Vikas Patra Online

Follow the below steps to invest in the Kisan Vikas Patra online.

• Get the KVP application form (Form-A) from the Post Office

• Provide accurate details on the form and submit it at the Post Office

• If you are investing in KVP via an agent, you will also have to fill up and submit Form-A1

• Both these forms are available on the official Post Office website

• Your KVP certificate will be issued after the verification of your documents.

Note: You need to furnish a copy of your identity proof (Aadhaar Card, Driving Licence, Voter ID, or PAN Card) for the KYC process.

Kisan Vikas Patra Eligibility

Let’s explore the eligibility criteria for Kisan Vikas Patra.

• The investor must be over 18 years of age (however, an adult can opt for KVP on behalf of a minor)

• Indian resident

• Trusts can as well invest in Kisan Vikas Patra

Kisan Vikas Patra Scheme Types

Here are the 3 types of KVP schemes:

• Single Holder Certificate: This type is issued to an individual for self or on behalf of a minor.

• A Type Joint  Certificate: This type of Kisan Vikas Patra scheme is issued to 2 individuals jointly and is payable to both adults or the survivor.

• B Type Joint Certificate: This KVP scheme is also issued jointly to 2 adults but the amount is payable to either of the owners or the survivor.

KVP Accrues Interest And Doubles The Money

There is little risk associated with the Kisan Vikas Patra scheme. The KVP scheme's current interest rate is 7.2%. It will take roughly 10 years or 124 months for this post office scheme’s deposit to double.

Given below is an example to show how this post office scheme to double the money works.

So, let’s assume that you have invested ₹1000 in Kisan Vikas Patra at 7.2%. Here’s how the interest accrues and doubles at maturity:

Kisan Vikas Patra Maturity Period

The current maturity period for Kisan Vikas Patra is 124 months, i.e. 10 years and 3 months. The amount invested in KVP doubles upon maturity. So, if you invested ₹5,000 in KVP in 2021, you will receive ₹10,000 on maturity.

Kisan Vikas Patra Form

You need to fill in the application form to invest in Kisan Vikas Patra. Here are a few details you must mention in the form:

• The principal amount

• The method of payment (cheque or cash)

• The type of KVP certificate

• If the type is not single, the name of both the owners

• If the certificate is being purchased on behalf of a minor, the name and DOB of the guardian and the minor

• Name, address, and DOB of the nominee

Benefits of Kisan Vikas Patra

Here are the key benefits of investing in Kisan Vikas Patra:

• You can start investing in KVP with an amount as low as ₹1000

• KVP is a long-term investment plan that doubles up your money within 124 months

• As Kisan Vikas Patra is a government scheme, you are bound to receive guaranteed returns

• The rate of interest is fixed, hence you do not have to worry about market fluctuations

• You can use the KVP certificate as collateral while seeking a loan

• Kisan Vikas Patra is completely exempt from wealth tax

• The KVP comes as a printed certificate. You can also ask for a soft copy of your Kisan Vikas Patra certificate online

Kisan Vikas Patra Rules and Guidelines

The Kisan Vikas Patra scheme was launched in 2014 with a set of rules and guidelines. Let's understand them briefly.

• All the rules laid down by the government for KVP shall be known as 'Kisan Vikas Patra Rules, 2014' and will be effective from the day it is issued in the Official Gazette

• The KVP certificates will be issued in denominations of ₹1000, ₹5,000, ₹10,000, and ₹50,000 only

• The application process for a KVP certificate is the same as the Post Office Savings Schemes Certificate Rules, 1960

• You need to visit the Post Office and submit the form to purchase a KVP certificate

• In case you lose your KVP certificate, you can visit the Post Office and apply for a duplicate copy. The application form must include details like amount, certificate number, the reason behind the loss or destruction of the certificate, etc.

• You can encash your Kisan Vikas Patra in Post Office or bank that issued your certificate

• The minimum lock-in period for the KVP scheme is 2.5 years

• The rules can be made flexible for certain investors on humanitarian grounds

Kisan Vikas Patra Encashment

In case you want to encash or disburse your Kisan Vikas Patra certificate, you need to visit the Post Office that issued your KVP. However, if you wish to do so at a different Post Office, you may have to go through a few formalities. Let's understand how to encash your KVP.

• Submit your identity slip provided when purchasing the KVP certificate

• Send a letter in writing with the identity slip to the concerned Post Office

Note: If you wish to withdraw your money before the maturity period, you can do so only after 2.5 years.

You can encash your KVP certificate prematurely under the following circumstances:

• It has been ordered by a Court of law

• On forfeiture by a Gazetted Officer or pledge

• If the KVP holder or any one of the holders dies

How to Transfer Kisan Vikas Patra Account?

Let's understand how to transfer Kisan Vikas Patra from one Post Office to another and from one person to another.

Transfer from One Post Office to Another: To transfer your KVP certificate from one Post Office to another, you must submit a handwritten consent to the officer. Additionally, you must note that the transferee must meet the eligibility criteria.

Transfer from One Person to Another: You must submit a written letter to the Post Office to transfer the KVP certificate from one person to another. However, you can do so only under the following conditions:

• If the KVP certificate is being transferred from the name of the deceased to his/her legal heir

• From single ownership to joint ownership

• From joint ownership to single ownership

• From the owner to a judge of law or any other individual as per court's order

Kisan Vikas Patra Premature Withdrawal

The Kisan Vikas Patra scheme allows you to withdraw the principal amount along with the interest. However, you can do so only after 2.5 years from the date of issuance. Once you send a written letter to the Post Office, they verify your application and process the amount.

Loan Against KVP

If you have a Kisan Vikas Patra certificate, you can pledge it as collateral to seek a loan from banks. However, you can apply for a loan against KVP only under the following conditions:

• You must have a KVP certificate under your name

• This feature is available for business or personal purposes only

• The loan must be repaid within your KVP tenor

While the Kisan Vikas Patra scheme seems like a great investment option for risk-averse investors, you must also check out fixed deposits. Like KVP, it features assured returns and loans against FD. And at Bajaj Markets, we offer rates of interest that can go up as high as 8.10%! In fact, we offer a flexible tenor that goes from 1 year to 5 years. You can also opt for the auto-renewal option that helps you keep your money safe and invested. So, visit our ‘Fixed Deposit’ page and let your savings grow in one of the most trusted NBFCs.

Nomination in KVP

An individual or joint holder of the certificate may apply for  nomination by submitting Form C with the required information at the time of purchase. If the certificate's sole holder or both joint holders pass away, you can name anyone to receive the certificate’s benefits..

If the nominations are not made during the purchase, it may be made at any time after the certificate is obtained but before maturity by the surviving holder, joint holders, or the single joint holder by presenting the properly filled C Form. It should be given to the postal or bank official in which  the certificate is recorded.

No nomination, however, may be made if the certificate is being held by, was acquired, or is on a minor’s behalf. In this case, if the certificate holders or holder make a nomination, it will be modified or cancelled using D Form.

If you have numerous certificates registered on various dates, you must submit a separate application for each nomination, cancellation, or variation. Such a request will be noted on the certificate and become effective as of the registration date.

Loan Against Post Office Fixed Deposit

The India Post Office offers loans up to 90–95% of the value of fixed deposits (FDs). FD loan interest rates are normally low, averaging 2-3% higher than FD interest rates.