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.

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

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.

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

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.

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:

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.

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

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

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

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

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.