The Kisan Vikas Patra, or the KVP, is one of the top investment choices worth considering. It is a certificate scheme available from the Indian post office. The aim is to double a one-time investment in around 9.5 years or 115 months in total. For instance, investing a sum of Rs. 10,000 will get you about Rs. 20,000 at the time of maturity.
Knowing More About KVP
The Kisan Vikas Patra (KVP) was an initiative that was launched by the India Post in 1988. The minimum amount for investments is Rs. 1,000, without any upper limits as well.
At the same time, the PAN card is mandatory as per the government for investments of over Rs. 50,000 to combat money laundering. For deposits of Rs. 10 lakh and higher, you should also provide proof of income. The KVP is a relatively safe option where you can keep your money for a specific duration. The Aadhar number is also mandatory to prove your identity.
Types of KVP Certificates
Here are some of the KVP certificate types that are available:
- Single Holder- It is a certificate given to an adult either for himself/herself or on a minor’s behalf. It may also be given to a minor.
- Joint A Type- It is jointly given to two adults, payable to both or the survivor.
- Joint B Type- This certificate type is given to two adults, payable to either the survivor or the holders.
Eligibility and Benefits
These are the eligibility criteria for the KVP:
- Should be an Indian citizen
- The age should be 18 or above
- Adults may apply on the behalf of minors or those with unsound minds
- NRIs and HUFs are not eligible to make investments
Here are some of the key benefits for the KVP:
- Guaranteed Returns- You will get a fixed sum at maturity with this scheme. It does not depend on any market fluctuations.
- Protection of Capital- It is a safe investment mode, without any market risks to consider.
- Interest Rate- The rate of interest can periodically vary, depending on the number of years. The present rate is 7.5% per annum for Q2 FY2024-25. The interest is compounded on a yearly basis.
- Lock-In Period- It stands at 30 months or 2 years and 6 months for premature withdrawals. Early encashment is not permissible, unless the account holder passes away or there is a court order issued to this effect.
- Affordability Quotient- KVP comes with denominations like Rs. 5,000, Rs. 1,000, and Rs. 10,000, along with Rs. 50,000. Denominations of Rs. 50,000 are only available at a city’s head post office.
- Loan and Nomination- These certificates may be used as security/collateral to get secured loans. You can get a nomination form and fill up the necessary details about your nominee. The date of birth has to be mentioned in case a minor is being nominated.
- Documentation- You will have to provide documents like birth certificates, proof of address and identity proof.
The KVP certificate is issued on the spot if you pay via cash and an identity slip is given, including the serial number, maturity date, amount, and the amount to be received on the maturity date. These investments do not have eligibility for Section 80C deductions and the interest is fully table. TDS is deducted at 10% annually on the credited interest.
