In 1988, India Post unveiled the Kisan Vikas Patra or KVP in post office, a small-savings certification initiative. Its main goal is to promote people's long-term financial stability.
It is a low-risk investment product sponsored by the government and is available as a certificate. It was initially meant for farmers to encourage them to save for the long term, but now it’s open for all. To prevent any possibilities of fraud like money laundering, in 2014, the government made PAN card proof mandatory for all deposits above ₹50,000, and income proof mandatory for deposits above ₹10 lakhs. Additionally, it is mandatory to submit an Aadhaar number as proof for any amount to be deposited.
The minimum KVP payment is ₹1,000, whereas there’s no limitation for a maximum amount. The applicable interest rate is 6.9%, which is compounded yearly. The invested money in KVP in post office will get doubled if it passes the time duration of 10 years and 4 months.
Here are a few key highlights of KVP scheme in post office to know about.
To invest in KVP in post office, you must be well-informed about its eligibility criteria.
Following is the list of documents required to invest in KVP in post office.
KVP scheme in Post Office is one of the safest investment schemes you'll come across. You will receive assured returns from this investment plan as this initiative is not affected by market fluctuations. The goal of this program was to encourage farmers to conserve money for the long term to increase their financial stability.
You may use the KVP certificate as security while applying for a loan since many financial institutions accept this certificate as collateral.
If you are in any financial emergency, you may withdraw your funds from the KVP scheme in post office prematurely. However, you can withdraw your money prematurely only after completing the time period of two and half years. Early withdrawal is also allowed if there is a court order.
You can add your child, spouse, family members, or another person as a nominee in KVP. The nominees will be eligible to receive benefits in the unfortunate event of your death. You can do so by filling out Form C at the time of purchase of the scheme.
Tax is not withheld at the time of encashment or disbursement of the KVP scheme in Post Office; it is TDS-free and paid in full to the bearer. However, the certificate holder must pay the taxes on the interest earned during the scheme's duration. Moreover, this program is excluded from Wealth Tax entirely.
You can start investing in the KVP scheme in post offices at a minimum of ₹1,000, and the scheme has no upper limit. You can invest as much as you wish.
If you wish to transfer your KVP certificate from one post office to another or from one person to another, you can do so as this scheme offers this facility.
Investors should keep in mind that the KVP interest rate in Post Office earned is taxable, and will be added to the investor's income for the year and taxed according to the applicable tax slab rate. Additionally, premature encashment of KVP before 2.5 years from the date of issuance is not allowed, and if withdrawn between 2.5 years and 124 months, the interest rate is reduced to the applicable post office savings account rate
Following are the different types of KVP certificates.
Investing in KVP is an easy process. Here are the steps you can follow.
The Indian post office has made it possible for investors to transfer their KVP certificates from one post office to another post office.
A KVP certificate can also be transferred from one person to another by submitting a written authorisation letter to the concerned post office. However, this can also be done in certain conditions, which are listed below.
KVP scheme in Post Office is one of the safest investments with guaranteed returns. Investors who are considering parking their money in fixed-income instruments can also look at KVP as an option. With the feature of getting your money doubled at the end of the tenure, you can invest with the amount that you don’t require in the near future.
KVP provides a longer tenure (10 years and 4 months) to invest. However, you can withdraw your money prematurely in the event of any financial emergency. It is similar to an FD investment but for a fixed tenure.
Both investment initiatives have their own set of advantages. You can invest in KVP if you desire a safe investment choice that has a lesser risk and ensures a double maturity amount. However, if you want to invest for a small tenure, you can choose NSC (National Savings Certificate).
KVP is backed by the government and is considered a highly safe investing instrument. The amount you will receive at the end of the term will be mentioned on your certificate, making it a guaranteed return vehicle.
KVP ia a government backed scheme, making it a safe option for many. Apart from this, guaranteed returns and a relatively high interest rate make it a good investment choice for many.
Kisan Vikas Patra (KVP) is a savings scheme offered by the Government of India. It was first introduced in 1988 as a small savings scheme aimed at encouraging people in rural areas to save money. The scheme was re-introduced in 2014 with several modifications.
Under the Kisan Vikas Patra scheme, individuals can invest a lump sum amount for a fixed period of time and earn interest on their investment. The minimum investment amount is Rs. 1,000 and there is no maximum limit on investment. The scheme is open to all Indian citizens, including minors, trusts, and Hindu Undivided Families (HUFs).
The maturity period of Kisan Vikas Patra (KVP) is 124 months, or 10 years and 4 months, from the date of issuance. At maturity, the investment in KVP doubles at the prevailing interest rate. This means that if an individual invests Rs. 10,000 in KVP, it will become Rs. 20,000 after 10 years and 4 months, at the current interest rate of 6.9% (as of April 2023).
KVP stands for Kisan Vikas Patra, which is a savings scheme offered by the Indian Postal Service. Under this scheme, individuals can invest a lump sum amount for a fixed period of time and earn a fixed interest rate on their investment. The minimum investment amount is Rs. 1,000 and there is no maximum limit on investment.
The maturity period of Kisan Vikas Patra (KVP) is 124 months, or 10 years and 4 months, from the date of issuance. At maturity, the investment in KVP doubles at the prevailing interest rate. This means that if an individual invests Rs. 10,000 in KVP, it will become Rs. 20,000 after 10 years and 4 months, at the current interest rate of 6.9% (as of April 2023).
