Surging living costs are now forcing individuals to search towards investment choices that could easily generate high and secure returns. Kisan Vikas Patra is among the best small investment schemes launched by the Post Office, widely recognized as KVP, which doubles the deposited capital of the investors just in a span of 124 months. KVP presently proposes an annual compound interest rate of 6.9 percent. It will take 124 months, or 10 years, and four months for this small savings scheme to double your deposited money at the present interest rate. With a minimum deposit amount of Rs 1,000 and in multiples of Rs 100 thereafter with no upper limit, one can easily open a KVP account at any post office across the country. But before parking your money in KVP you must consider the major advantages of this scheme which we have listed below for you.
Required eligibility
Any Indian resident who is over 18 years of age (no maximum age limit is applicable) can invest and purchase a KVP certificate. An adult on behalf of minors can open a KVP account. Minors can invest only if they agree to the purchasing of a certificate by an adult on their behalf. Eligible to purchase a KVP certificate are only those Indians who are residing in India. It is not permissible for Non-Resident Indians and Hindu-Unified Families to invest in KVP. KVP certificate can be purchased by:
- A single individual
- Joint A Account Holder (Up to 3 adults)
- Joint B Account Holder (Up to 3 adults)
- Minors with a minimum age of 10 years old
- An adult on behalf of a minor.
- A guardian on behalf of an adult of unsound mind
Interest rate
The present rate of interest of KVP, which is compounded annually, is 6.9 percent. In ten years and four months, the KVP guarantees to generate returns that are double of your investment by the end of the 124 months.
Minimum and maximum deposit cap
This small savings scheme i.e. Kisan Vikas Patra is a reliable low-risk investment tool as it is backed by the government of India. Certificate is provided to the investors for the amount invested in this scheme i.e. Rs 1,000 is the minimum limit. A PAN card is mandatory for investments over Rs 50,000 for the investors. You can purchase a certificate for yourself or on behalf of your child or jointly with your spouse under this scheme. The interest rate of KVP is not linked to market risks and is determined by the ministry of finance, which ensures that the returns are guaranteed.
Maturity period
At the time of purchase, the maturity amount is measured on the basis of the prevailing interest rate and the same is pre-printed on your KVP certificate. This ensures that even if the interest rate has modified by the time of maturity, the adjustment will not influence your returns. Even if interest rates have fallen, you will get what you were assured after 124 months or 10 years and four months, which makes KVP one of the best investment options during the current scenario of falling interest rates of bank FDs.
Premature withdrawal facility
The KVP enables depositors to make premature withdrawals, unlike many other long-term investment strategies. That being said you will have to pay a penalty and also you will lose the interest if you make a withdrawal within one year of purchasing the certificate. However, your interest will be diminished but there will be no penalty if you withdraw between one year and two and a half years after purchasing the certificate. Withdrawal is permitted at any period after two and a half years and does not trigger any penalty or drop in interest respectively.
