Kisan Vikas Patra (KVP) is a government-backed savings certificate scheme which was first launched by the India Post in 1988. The primary objective of the scheme was to encourage Indian farmers to indulge in long-term financial savings for their betterment. Kisan Vikas Patra (KVP) is now open to all. KVP certificates and application forms are available at authorized Indian post offices and selective bank branches.
Minimum and Maximum Investments
KVP certificates are issued in specific denominations of 1000, 5000, 10000, and 50000. The minimum limit for investment is 1000. Luckily, KVPs don’t have any upper limit when it comes to investment. Though, Pan Card is compulsory if the investment amount is more than 50,000.
KVP Maturity Period
The policy tenure for the KVP scheme is 113 months (9 years & 5 months). Suppose, you make a one-time lumpsum investment in KVP. You’ll get double the invested amount towards the end of the policy tenure.
KVP Interest Rate 2019
The interest rate for Kisan Vikas Patra (KVP) changes quarterly . As of now, the current rate of interest for Kisan Vikas Patra (KVP) is 7.6% which is compounded annually.
You can download KVP calculator by clicking on the below link
KVP is an excellent choice for people willing to invest their surplus funds in a risk-free financial savings instrument. This article will help you gain a deep understanding of KVPs so that you can easily invest in the same.
Who Can Invest In KVP? (Eligibility Criteria)
Here’s the eligibility criteria for making an investment in the Kisan Vikas Patra (KVP) scheme.
- The applicant of the KVP scheme should be an adult Indian resident.
- However, a parent or guardian can invest in KPV in the name of a minor applicant.
- A trust can invest in KVP
- Hindu Undivided Families (HUFs) can not invest in KVP.
- NRIs are also not allowed to invest in KVP.
Advantages & Features Of Kisan Vikas Patra
Let’s take a look at the various advantages and features of the Kisan Vikas Patra (KVP) scheme.
KVPs are best known for their assured returns as the scheme was originally launched for encouraging long-term financial savings. Irrespective of ups and downs in the market, the Kisan Vikas Patra scheme offers guaranteed returns.
Kisan Vikas Patra’s maturity period is 113 months (9 years & 5 months). KVP’s maturity proceeds keep on accruing interest till the final withdrawal is made. Once the maturity is period is over, you can get the corpus.
The returns offered by KVP don’t fall under the purview of section 80C and hence, they’re taxable. Nonetheless, once the maturity period is over, withdrawals are not subject to Tax Deducted at Source (TDS).
KVPs is a very straightforward financial savings instrument. You make an investment and avail the gains upon completion of the policy tenure. Therefore, KVPs come with high capital protection as they’re affected by market risks.
Premature Withdrawal Facility
Premature withdrawal is allowed in KVP after 2 and ½ years of purchasing the certificate.
Nomination facility is allowed in KVP. You must get a nomination form from an authorized post office and fill in the details about the nominee. In case your nominee is a minor, you must mention his/her birthdate on the form.
Loan Facility Against KVP
You can avail the loan facility by taking your KVP as collateral. Plus, the rate of interest for loans availed against KVP is relatively lesser.
Also Read : Is NSC Interest Taxable?
Documents Required For Investing In Kisan Vikas Patra
You need following documents for making an investment in Kisan Vikas Patra (KVP).
- The duly-signed KVP application form.
- Aadhaar Card of the applicant.
- Photograph of the applicant (Passport-size).
- PAN Card of the applicant for investments exceeding 50,000.
- Photographic/Image Proof For investments exceeding 10 lakhs.
Step-By-Step Procedure To Invest In Kisan Vikas Patra
Here is the step-by-step procedure to invest in Kisan Vikas Patra (KVP). First, you must get the KVP application forms, which you can get online as well as offline.
- Fill up the KVP application form known as Form-A and submit it to the respective Post Office. If you’ve made the investment via an agent, then he/she must fill-up the Form-A1.
- Submit your identity proof (Aadhaar, PAN, Voter ID, etc.) and complete the KYC process.
- Make the deposit and wait until the verification of your documents.
- If you make the payment through cash, your KVP certificate will be issued immediately.
- If you make the payment through any other mode such as cheque or demand draft, the procedure will be different. You’ll have to wait till your deposit gets cleared by the post office.
- Upon clearance, you will get the KVP certificate.
At the time of KVP certificate purchase, you will receive an identity slip as well. The KVP identity slip consists of information like KVP serial number, maturity date, and the amount you’d receive upon maturity. Keep this slip safe as you will have to submit it at the time of encashment of your KVP certificate.
Frequently Asked Questions About Kisan Vikas Patra (KVP)
Let’s answer some of the most frequently asked questions about Kisan Vikas Patra (KVP).
Is KVP Interest Taxable?
Yes, the interest that you earn on KVP is completely taxable as it doesn’t fall under Section 80C.
How Can I Buy KVP?
You can purchase a KVP certificate at any of the authorized Indian Post Offices.
What Is The Maturity Period Of KVP?
The maturity period of Kisan Vikas Patra (KVP) is 113 months (9 years & 5 months).
Is KVP Taxable?
KVP doesn’t fall under the purview of Section 80C. Hence, the interests earned under KVP are completely taxable.
What Is The Interest Rate For KVP?
As of now, the current interest rate for KVP is 7.6%.
Can We Buy KVP Online?
No, you can not buy KVP online. Though you can download the form online and submit it in nearest post office or bank branch.
Is KVP TDS Free?
Yes, TDS does not apply on investments made in KVP. However, the interest earned under KVP is taxable.
Is KVP A Good Investment?
KVP is a good investment option for people who want to park their surplus funds in a safe investment avenue.
Kisan Vikas Patra is a risk-free savings instrument, ideal for investors looking to park their funds for a specified period. Although investing in KVPs is quite easy, you should only arrive at a decision after considering your financial goals. So, if Kisan Vikas Patra seems to be in accordance with your goals, you should invest without any delay.
Till Then, Happy Investing!