Kisan Vikas Patra (KVP) is a government-backed savings scheme designed to double your investment over a fixed period. It offers a guaranteed return, with the current interest rate at 7.5%, meaning your investment will double in approximately 9 years and 7 months. KVP is available for purchase at post offices and select banks, with a minimum investment of ₹1,000 and no upper limit.
Originally introduced for farmers, the scheme is now open to everyone, offering a guaranteed return on investment. With minimal risk and a fixed interest rate, KVP is an attractive option for individuals looking to double their investment over time.
Let us look at the scheme more in detail.
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What is Kisan Vikas Patra?
Kisan Vikas Patra is a small savings scheme offered by India Post. It allows individuals to invest their money in a government-backed savings instrument that promises a guaranteed doubling of their initial investment after a specified period. The KVP certificates can be purchased from post offices or select banks across the country. One of the highlights of the scheme is its simplicity and guaranteed returns, making it an attractive investment option for conservative investors.
Key features of Kisan Vikas Patra:
Guaranteed returns: Your investment will double after a set period.
Fixed interest rate: The interest rate is revised periodically by the government, but once you invest, the rate remains fixed for your entire investment duration.
Security: KVP is backed by the Government of India, making it one of the safest investment options.
Minimum investment: You can start with as little as ₹1,000, and there is no upper limit.
Premature withdrawal: While the money is locked in for a set period, premature withdrawals are allowed under certain conditions, such as death or court order.
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Kisan Vikas Patra: How long does it take to double?
The time it takes for your investment to double in Kisan Vikas Patra depends on the interest rate at the time of your investment. As of the latest updates, the interest rate for KVP is 7.5% (subject to change), and at this rate, the money will double in approximately 115 months (9 years and 7 months).
The period to double your investment is linked to the interest rate declared by the government, so it’s essential to check the current rates before investing.
How to purchase Kisan Vikas Patra?
You can buy KVP from any post office or designated banks across India. Here’s a step-by-step guide on how to purchase KVP:
- Visit a post office or bank: KVP certificates are available at any post office and select banks.
- Fill out the application form: You will need to fill out a KVP application form and provide identity proof such as your Aadhaar card or PAN card.
- Make the payment: You can invest as little as ₹1,000 and increase it in multiples of ₹1,000.
- Receive the certificate: Once your payment is processed, you will receive a KVP certificate as proof of your investment. You can opt for a physical certificate or an electronic one (eKVP).
Benefits of Kisan Vikas Patra
Low risk, high safety: Since KVP is backed by the Government of India, your investment is secure.
Guaranteed doubling of investment: Regardless of market conditions, your investment will double in the specified period.
No upper investment limit: Unlike other government schemes, KVP has no upper cap on investment, making it ideal for large savings.
Premature withdrawal flexibility: While it is a long-term investment, KVP offers the flexibility to withdraw in emergencies.
Easy to transfer: KVP certificates are transferrable from one person to another and from one post office to another.
Drawbacks of Kisan Vikas Patra
Taxable returns: Interest earned on KVP is fully taxable, and there is no tax benefit under Section 80C, unlike other savings schemes.
Lock-in period: The scheme has a lock-in period of 2.5 years, meaning you can’t withdraw the money before this period unless under specific circumstances.
The Kisan Vikas Patra is a safe and reliable investment option for those looking to grow their money over time without taking on much risk. With its guaranteed doubling feature and backing from the government, it appeals to investors who prefer stability over high returns. However, it’s important to keep in mind that while the scheme is secure, the returns are fully taxable, which could impact your overall earnings.
