Kisan Vikas Patra (KVP)

Last Updated : Dec. 14, 2022, 3:39 p.m.

Kisan Vikas Patra (KVP) is a savings certificate scheme that an adult can purchase in his name or on behalf of a minor. It can also be used jointly by two persons or a trust. Before depositing any kind while purchasing a KVP certificate, you will need to go through the KYC (Know Your Customer) verification process to confirm your identity and address information.

Let’s look at the features of this popular saving avenue, which enables one-time investments to double in value over about ten years and four months (124 months).

Kisan Vikas Patra Certificate Scheme and its Types

India Post launched the Kisan Vikas Patra (KVP) in 1988. It is a small-savings certificate programme. KVP is a government savings programme with the main goal of promoting long-term financial discipline. Its original purpose was to help farmers save money over the long term, hence the name. It is now available to everyone who qualifies in the form of certification from any branch of the India Post and a few public sector banks .

KVP, a financial investment option offered by the Indian government, offers an annual interest rate of 8.25%. There isn’t a set maximum investment amount; the minimum is ₹1000. Also, if you opt for a lump-sum investment now, it would turn twice as much at the end of the 124th month. Additionally, it provides tax and income tax benefits.

The following certificate kinds are available for KVP:

• Single Holder Type Certificate: It is issued to an adult who may receive this type of certificate for themselves, a minor, or both.
• Joint “A” Type Certificates: They are allotted to two people jointly and are payable to both holders, either jointly or the survivor.
• Joint “B” Type Certificates: They are issued to two individuals jointly and are payable to any of the holders or the survivors.

KVP Eligibility

KVP is a low-risk savings platform where your money can be securely parked for a specific time. This programme is especially enticing to rural Indians without a bank account. For risk-averse people with the extra cash they might not need shortly, KVP is a viable option. It all relies on your risk tolerance and objectives.

An individual must meet the following requirements to invest in KVP:

• The candidate needs to be an Indian national.

• The applicant must be at least 18 years old

• An adult may apply on behalf of a minor (be sure to include the minor’s date of birth and the name of the parent or legal guardian).

• Non-Resident Indians ( NRIs ) and Hindu Undivided Families (HUF) are unable to invest in KVP

Steps to Invest in Kisan Vikas Patra

Invest right away if Kisan Vikas Patra sounds like a wise choice and aligns with your financial objectives. It is manageable and easy to open. The procedures are listed below.

Step 1: Gather the Form A application form and complete it with the required data.

Step 2: Hand deliver the properly completed paperwork to the post office or bank.

Step 3: The agent must complete Form A1 if the investment in KVP is made through an agency. These forms are also available online for download.

Step 4: You must complete the Know Your Customer (KYC) procedure and submit a copy of your identification (PAN, voter ID, Aadhaar , driver’s license, or passport) as well as your address.

Step 5: You must deposit after the documents have been examined. Cash, locally issued cheques, pay orders, and demand drafts drawn in the postmaster’s favor can all be used to make the payment. Step 6: Unless you pay by demand draft, pay order, or cheque, you will receive a KVP certificate right away. Keep this safe since you’ll need to turn it in when you’re mature. You can also ask for the certificate to be emailed to you.

Specifications and Perks of Kisan Vikas Patra

Assurance of profits: You will receive the said amount notwithstanding market changes.

Monetary safety: This strategy is absolutely a risk-free investment. It is not impacted by market risks. When the term is through, you get the investment and profits.

Interest: Depending on the years invested in KVP at the time of purchase, the effective interest rate for KVP fluctuates. The current interest rate is 6.9% p.a. for the second quarter of the fiscal year 2022–2023 or the period from July 1 to September 30. It is compounded annually.

Maturity: You can use the corpus when KVP reaches maturity, which is in 124 months. Until you remove the money, the maturity proceeds of KVP will continue to accrue interest.

Taxation: Taxes are not deductible under section 80C . Moreover, the returns are fully taxed. TDS is not applicable to withdrawals made once the maturity period is completed.

Guidelines for early withdrawal: Candidates must note that the lock-in period is 30 months. However, the account matures after 124 months. Also, an early exit is permitted only in the case of a court order or the account holder’s death.

Easy and affordable: It can be easily purchased for ₹1000, ₹5000, ₹10,000, and ₹50,000. The post office of your city will offer denominations of ₹50,000.

Loan secured by a KVP certificate : The KVP certificate serves as a security or collateral when you apply for secured loans . Moreover, loans availed on KVP come with a relatively lower interest rate.

Nomination facility: You can add a nominee via a nomination form available at the post office. You must mention the minor nominee’s birthdate.

Issue of KVP certificates: You can immediately get the KVP Certificate if your payment is in cash. You will have to wait for the payment to get cleared if you use a cheque , demand draft, or money order. Identity Slip for KVP: The KVP Certificate, the KVP serial number, the maturity date, and the amount to be paid on the maturity date are included in this.

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