Under the Ministry of Finance (MOF), India Post created the Kisan Vikas Patra (KVP) in 1988, a modest savings certificate system to encourage individuals to save money and make long-term investments. KVP was initially designed for farmers but was later opened to everybody. The KVP’s major goal is to double the amount deposited. Because it is government-backed, there are minimum risks involved, and the interest rates are reasonable.
Know all about the Kisan Vikas Patra post office scheme in the article below if you plan to make a long-term investment.
What is Kisan Vikas Patra (KVP)?
It is a government savings plan administered by the Postal Department. This government effort encourages individuals to save small amounts of money for long-term investments. It is an excellent investment if you want security and a guaranteed return on investment.
- Understand how you can apply for the Kvp post office scheme through this article
- Key benefits of Kisan Vikas Patra and how it can be beneficial to you
- Learn about how you can encash your Kvp
- Find out the eligibility criteria for KVP, and get to know the required documents for the same
Types of Kisan Vikas Patra Scheme
- Single Holder Certificate – This KVP scheme is provided to a person for themselves or on behalf of a juvenile.
- Joint A Certificate – This type of KVP is granted to two people at the same time and is payable to both adults and/or the survivor.
- Joint B Certificate – This KVP plan is also given jointly to two people. However, the money is payable to only one owner or the survivor.
How Can Kisan Vikas Patra Grow Your Money?
KVP is a stable and secure plan with minimum risk. The interest rate is 6.9 per cent, which means it would take around 10 years (or 124 months) to double your money under the Kisan Vikas Patra scheme. For example, if you purchase the certificate for Rs. 5000 today, KVP will bring you a lump sum of Rs. 10,000 in 2032.
|Time||Value (Premature) in Rs.|
|On maturity (<11 years)||10000|
Did You Know?
To boost the country’s internal savings, which decreased to 30 per cent of the gross domestic product (GDP) in 2012-13 from the high of 36.8 per cent in 2008, the government created the Kisan Vikas Patra plan.
KVP Interest Rate
While the interest rate of the Kisan Vikas Patra scheme keeps changing, the current rate is 6.9%, effective from 1 April 2021 to 30 June 2022.
KVP Post Office Scheme: Eligibility Criteria & Required Documents
Eligibility Criteria for KVP –
- The applicant must be 18 or above
- The applicant must be an Indian citizen
- A Trust can purchase a KVP
- Hindu Undivided Family and Non-Resident of India aren’t eligible to invest in KVP
Documentation Needed for Kisan Vikas Patra –
- KVP Form
- ID Proof (Voter ID/Aadhaar/Passport/Driving License/PAN)
- Application form
- Proof of Address
- Birth Certificate
Also Check: KVP Calculator
Kisan Vikas Patra Form
You can apply for KVP KVP Certificate using two methods. The form can be either downloaded online. Once filled, it can be submitted to the post office. Or, you can visit a post office near you, request a KVP form, fill it out, and submit it back to the post office.
How to Apply for Kisan Vikas Patra Post Office Scheme? Follow the Steps
Before knowing the step-by-step process for applying for the KVP Post Office plan, let’s overview the eligibility criteria for applying.
Any Indian citizen over 18 may purchase a certificate. Children can also get a KVP certificate with the help of an adult. The scheme does not have an age restriction for investors, making it advantageous to older individuals.
Investing in KVP is simple. Here are the steps to follow –
- Complete the Kvp post office application form, Form A, with the required information.
- Submit the completed form to your post office or bank.
- If investing via an agent, they must fill out Form A1. These are available to download online.
- Submit Know Your Customer (KYC) documents like ID and address proof.
- Make the deposit. Cash, local cheque, money order, or demand drafts in favour of the postmaster are all accepted modes of payment.
- Keep your KVP certificate secure as you will need it at the time of maturity. You may also ask the officials to email your Kisan Vikas Patra Online certificate.
Now you know how easy it is to apply for a KVP. However, you need to know the benefits of this scheme before investing any money. So here are some key benefits of the Kvp Post Office scheme –
Kisan Vikas Patra Post Office Scheme: Rules and Guidelines
There are certain rules and guidelines related to KVP Scheme.
- Application – The application process of KVP remains the same as Post Office Savings Certificate Rule, 1960.
- Denomination – Kisan Vikas Patra scheme will be issued only in the denomination of IINR 1000, 5000, 10,000 and 50,000.
- Certificate Purchase – You can purchase any number of certificates.
- Issue of Certificate – The certificate gets issued immediately after the payment is made.
- Nomination – Certificate purchaser can nominate any person who in the event of death of the certificate holder shall be entitled to hold the certificate.
Benefits of Kisan Vikas Patra
- Return Guaranteed – KVP scheme, being a government-sponsored savings programme, ensures a high return on investment. This implies that upon maturity, the account holder is assured of receiving the accumulated capital as a benefit.
- Taxation – It is not eligible for 80C deductions, and the returns are fully taxable. TDS, on the other hand, is immune from withdrawals beyond the maturity period.
- Liquidity – Liquidity is provided as loans and withdrawals, both of which are subject to restrictions. The minimum lock-in duration is 30 months, after which it may be redeemed for a fee.
- Loan secured by a KVP certificate – To get a secured loan, you may use your KVP certificate as collateral or security. The interest rate on such loans is rather low.
- Simple and Affordable – KVP post office plan is available for Rs. 1000, Rs. 5000, Rs. 10,000, as well as Rs. 50,000. There is no upper limit. Please keep in mind that denominations of Rs. 50,000 are only accessible at a city post office.
Now that you have learned about the benefits of Kisan Vikas Patra, it’s essential to know how you can encash your Kvp. Here are the details –
Did You Know?
According to official statistics, 30.18 lakh Kvp were sold worth Rs. 26,478.36 crore between 2018 and 2019. Between 2019 and 2020, 21.43 lakh KVPs were sold, with investments of Rs. 19,730.16 crores. As of March 31, 2020, the outstanding amount under the Kvp plan was Rs. 123,736.61 crores. 8.02 crore certificates were registered through November 2020.
How to Encash Kisan Vikas Patra?
If you wish to cash your KVP online certificate, you must go to the post office that issued it. If you want to do so at a different post office, you may have to jump through some hoops. To encash your Kisan Vikas Patra you need to do these –
- Provide your identification card (it would have been provided at the time of purchasing the KVP certificate)
- Send a letter, together with the slip, to the relevant Post Office.
Please note that if you wish to encash your Kvp before maturity, you can do so only after 2.5 years.
Did You Know?
When compared to NSC, it can be seen that National Saving Scheme has a lock-in duration of 5 years, while Kvp has a lock-in term of 2.5 years.
Why Did We Choose the Above Points to Include in this Article Over Other Information?
- You will have an answer on how your money is doubled with the Kisan Vikas Patra Post Office scheme.
- The foremost question of whether you are eligible to apply is answered here, which is essential before knowing any other information.
- The process of applying for KVP has been given in detail.
- Finally, before investing your hard-earned money, you need to know the benefits of applying for any scheme. These benefits are included in this article.
Word to Remember
Know Your Customer (KYC) – It means authenticating a customer’s identification. The goal of KYC requirements is to prevent banks from being utilised for money laundering by criminal groups.
If you are planning for a long-term, risk-free, government-backed investment option, definitely consider the Kisan Vikas Patra post office scheme once you have all the information related to the Kvp post office scheme from this article as it is highly crucial to take investment decisions only after being fully informed about the process, risks and steps involved.
The full form of KVP is Kisan Vikas Patra.
Because it is a government-backed program, Kisan Vikas Patra guarantees a substantial long-term return on investment.
The KVP may be cashed at any post office or nationalised bank in India if a transfer certificate to the target post office or bank is acquired.
The minimum investment in Kisan Vikas Patra is Rs. 1000
Yes, you may. However, there are some rules you need to follow to transfer the certificate.
Yes, it is. There are a few public sector banks that offer the Kvp scheme.
The Kisan Vikas Patra maturity period is 124 months.
Yes, you can apply for a loan against KVP for personal or business purposes.
To get a duplicate KVP certificate, you must fill and submit form NC29 along with a photocopy or the original certificate.
No, NRIs and HUFs cannot invest in Kisan Patra Scheme.
There is no tax exemption available for investing in KVP. The interest earned on KVP is taxable.
The KVP certificate gets issued immediately after the payment is made.