Kisan Vikas Patra (KVP) is a government-backed savings scheme introduced in 1988 by India Post. It aims to encourage long-term financial discipline among individuals by offering a secure investment avenue with guaranteed returns. Initially targeted at farmers, it is now available to all Indian residents. The scheme allows investors to double their investment over a predetermined period, making it an attractive option for risk-averse individuals seeking assured returns.
Types of KVP Certificates
KVP offers three types of certificates to cater to different investment preferences:
1. Single Holder Type Certificate
- Issued to an individual adult.
- Can also be purchased by an adult on behalf of a minor.
- Suitable for individual investors aiming for personal savings.
2. Joint ‘A’ Type Certificate
- Issued jointly to two adults.
- Payable to both holders jointly or to the survivor in case of one holder’s demise.
- Ideal for couples or partners planning joint investments.
3. Joint ‘B’ Type Certificate
- Issued jointly to two adults.
- Payable to either of the holders or to the survivor.
- Offers flexibility, allowing either holder to encash the certificate.
Key Features of KVP
- Guaranteed Returns: KVP offers a fixed interest rate, ensuring that your investment will double over the scheme’s tenure.
- Interest Rate: As of the latest update, the interest rate is 7.5% per annum, compounded annually.
- Maturity Period: The investment matures in 115 months (9 years and 7 months).
- Minimum Investment: ₹1,000.
- No Maximum Limit: There is no upper limit on the investment amount.
- Taxation:
- Investments in KVP do not qualify for deductions under Section 80C of the Income Tax Act.
- Interest earned is taxable.
- No Tax Deducted at Source (TDS) upon maturity.
- Loan Facility: KVP certificates can be used as collateral to avail loans from banks and financial institutions.
- Transferability: Certificates can be transferred from one person to another under specific conditions, such as the death of the holder.
- Premature Withdrawal: Allowed only after 2 years and 6 months (30 months) under specific circumstances like the death of the holder or by court order.
Eligibility Criteria
- Residency: Must be an Indian resident.
- Age: Individuals aged 18 years and above can invest.
- Minors: Investments can be made on behalf of minors by parents or legal guardians.
- Exclusions: Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to invest in KVP.
How to Invest in KVP
Offline Method:
- Visit your nearest post office or authorized bank branch.
- Obtain and fill out Form A (application form).
- Submit the form along with KYC documents (e.g., Aadhaar card, PAN card, passport).
- Make the payment through cash, cheque, or demand draft.
- Receive the KVP certificate upon successful processing.
Online Method:
- Log in to the India Post website or your internet banking portal.
- Select the KVP scheme and download Form A.
- Fill in the required details and submit the form along with scanned copies of KYC documents.
- Make the payment through the available online payment modes.
- The KVP certificate will be sent to your registered email ID.
Benefits of KVP
- Safe Investment: Being a government-backed scheme, it offers a secure investment avenue with minimal risk.
- Assured Returns: The fixed interest rate ensures that your investment will double over the specified tenure.
- Flexible Investment Amounts: With a low minimum investment requirement and no upper limit, it caters to a wide range of investors.
- Loan Facility: The ability to use KVP certificates as collateral provides liquidity options without breaking the investment.
- Ease of Transfer: The transferability feature ensures that the investment can be passed on to nominees or legal heirs smoothly.
