The government of India has launched several schemes in the last few decades in order to encourage Indians to save and invest on a regular basis. Among India’s various government-backed schemes is the Kisan Vikas Patra Scheme. It is an ideal scheme for risk-averse individuals as it provides the safety of your capital and assured returns. Kisan Vikas Patra or KVP is notable because it can double your money over a long-term fixed period. Let’s explore how the Kisan Vikas Patra scheme works and how to make the most of it.
An Overview of the Kisan Vikas Patra Scheme
The Kisan Vikas Patra Scheme is a government savings scheme, which was originally introduced in 1988 and then reintroduced in 2014. It aims to encourage long-term savings among Indian citizens. It offers guaranteed returns and is available at India Post offices and authorised banks.
Currently, the interest rate in Kisan Vikas Patra is 7.5% per year, and it is compounded annually. At this rate, your investment doubles in 115 months (9 years and 7 months). This makes it one of the safer investment options for those who want passive, assured returns within a specified period without market worries or regular monitoring.
Eligibility for the Kisan Vikas Patra Scheme
To invest in the KVP scheme, you must meet certain eligibility criteria.
- You must be a resident of India.
- Parents or guardians can invest in the name of minors above the age of 10.
- The Kisan Vikas Patra scheme is not open to HUFs (Hindu Undivided Families) or NRIs (Non-Resident Indians).
Key Points to Note about the Deposit Amount and Maturity
A minimum of ₹1,000 (in multiples of ₹100) can be deposited into a Kisan Vikas Patra account. There is no maximum deposit limit. An individual can open any number of KVP accounts.
For accounts opened between 12th December 2019 and 31st March 2020, the maturity period is 9 years and 5 months. If the Kisan Vikas Patra account was opened on or after 1st April 2020, the maturity period will be 10 years and 4 months.
The actual maturity period depends on the KVP interest rate applicable at the time the account is opened.
How to Apply for the Kisan Vikas Patra Scheme?
The application process for the Kisan Vikas Patra scheme is an offline one. You can open a KVP account by following these steps:
Step 1. Visit your nearest post office or authorised bank branch.
Step 2. Collect the KVP application form or download it from the official website.
Step 3. Fill in the required personal and nominee details.
Step 4. Submit KYC documents such as Aadhaar, PAN, and age proof.
Step 5. Deposit the amount you wish to invest (minimum ₹1,000, in multiples of ₹100).
Step 6. Make the payment via cash, cheque, demand draft, or via a withdrawal from a linked savings account.
Once processed, you will receive a physical or electronic KVP certificate. Remember to keep your certificate safe, as you will need it during maturity.
Types of Certificates Available Under the Kisan Vikas Patra Scheme
The Kisan Vikas Patra scheme offers three types of certificates depending on who is investing:
Single Holder Certificate
This is issued to an individual or on behalf of a minor or a person of unsound mind.
Joint A-Type Certificate
This is issued in case the account is jointly held by up to three adults. Here, the maturity is payable to all holders or the survivors.
Joint B-Type Certificate
This certificate is also jointly held by up to three adults. However, the maturity is only payable to any one holder or to the survivors.
Features of the Kisan Vikas Patra Scheme
The Kisan Vikas Patra scheme offers a host of features that make it one of the most reliable long-term investment options you can opt for.
1. Guaranteed Doubling of Investment
The most attractive feature of the KVP scheme is the assurance that your money will double at maturity. Currently, with a KVP interest rate of 7.5% per annum (compounded yearly), the investment doubles in 115 months (9 years and 7 months). This can be a solid option for those looking for safe, reliable 10-year investment plans.
2. Safety of Your Capital
When you invest in KVP, your funds remain safe with the assurance of the government. Moreover, they are not subject to market risks. You can enjoy the doubling of your investment value by maturity, without having to worry about market fluctuations affecting your funds.
3. Flexible Investment Amounts
You can start investing with as little as ₹1,000, and there is no upper limit. Investments in KVP can be made in multiples of ₹100, making it ideal for investors looking for flexibility.
4. Transfer Facility
KVP certificates are easily transferable. You can transfer the KVP certificates from one person to another, and also from one post office to another.
5. Premature Withdrawal Option
While the KVP scheme is designed as a long-term investment, one can encash prematurely after 2.5 years (30 months) under specific conditions (such as the demise of the holder/s or court orders).
6. Nomination Facility
The certificate holder can nominate a person of their choice to receive the maturity proceeds from the KVP scheme (in case of the holder’s demise).
7. Accessible and Simple
The KVP scheme is available at all post offices and select bank branches across India. The application process is simple and requires basic KYC documents. Even first-time investors and those in semi-urban or rural areas can access the benefits of this scheme with ease.
8. Joint Holder Facility
If you want to pool funds with your spouse or other family member into investment plans, KVP can be an ideal option. You can either opt for Joint A-type or Joint B-type certificates, depending on your financial preferences.
To sum up, the Kisan Vikas Patra scheme is one of the trusted, government-backed investment plans that offer guaranteed returns over the long term. It has simple eligibility criteria and offers flexibility in terms of the investment amount. What’s more, the interest rate in Kisan Vikas Patra is steady, currently standing at 7.5% per year, which helps you double the investment value by the maturity period without the stress of market instability. If you think KVP is the ideal long-term investment option, you can head to your nearest post office right away.
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