Launched by India Post in 1988, Kisan Vikas Patra was initially a scheme small saving scheme. The scheme was originally launched exclusively for farmers; nevertheless, the scheme is now applicable to all Indian citizens.

The objective of Kisan Vikas Patra is to encourage and promote financial discipline and its importance in people. The tenure of the scheme is applicable for 118 months, i.e., 9 years and 10 months. The minimum investment scheme available under this scheme is Rs. 1000; moreover, there is no upper limit applied. In order to eliminate any possible events of money laundering, in 2014, the government compulsorily demands PAN card proof for the investment of over Rs. 50,000. To invest anything more than Rs. 10 lac, applicants must submit valid income proofs, such as salary slips, bank account statements, and ITR documents.

Eligibility of Kisan Vikas Patra

Under this scheme, any Indian citizen who is over 18 years old can apply for the Kisan Vikas Patra Scheme at the nearest post office. An applicant can buy one for a minor or together with another adult member. Kisan Vikas Patra is a great option for risk-averse people with plenty of money.

Benefits of Kisan Vikas Patra

In spite of the current market situation, a guaranteed scheme is made available for applicants.

The scheme is the safest measure of capital protection and investment. At the end of the tenure, gains are guaranteed. The current rate of interest for the scheme is 7.7%.

The scheme does not fall under the category of 80C deductions, and the returns are entirely taxable. 

The lock-period is a minimum of 30 months; thus, premature withdrawal is applicable. Moreover, applicants can avail nomination services, Kisan Vikas Patra certificate issuance, and loan against the certificate.

Should you invest in Kisan Vikar Patra?

While there are innumerable investment schemes out there for you to choose from, choosing therefore ends up becoming the harder thing to do. With schemes bombarding one with high-end investment jargon, investors are often browbeaten into opting for schemes simply on the premise that that would be the surest way to grow their money safely.

One would therefore tend to have the same confusion around the Kisan Vikar Patra, however, things are a bit different with this one though.

The first point of safety that comes with Kisan Vikas Patra is the fact that one can avail this scheme from a post office. This makes the scheme a very feasible option, especially for the rural populace who do not even hold bank accounts.

The Kisan Vikas Patra is a low risk savings option which is suitable to those individuals who are rise-averse financially. Those individuals who have higher stakes involved with their surplus and would rather aim to play safe with their money can opt for this scheme.

Apart from those individuals, even those who are above the age of 18 and wish to consider investing but do not know a safe option to choose from, can opt for the KVP post office scheme.

InvestmentsMinimum investment of Rs.1000 required whereas there is no capping on maximum investmentMinimum- Rs.50 | Maximum- Not Limited
Rate of Interest6.90%Differs from bank to bank. Highest ROI is offered by IDFC bank i.e, 8.50%
Maturity10 years and 4 months10 years. However, subscribers can withdraw money after 7 days from the date of investment
Tax TreatmentReturns on KVP are taxableTax saver FDs are tax exempted for up to Rs.1.5 Lakh under Section 80(c)
Lock-in periodsLock-in period of 2 and a half yearsNo lock-in period. The tenure of Fixed deposits range from 7 days to 10 years
Premature WithdrawalsWithdrawals are allowed before maturityMoney can be withdrawn as and when the subscriber wants, after 7 days
KVP V/s Fixed Deposit
InvestmentsMinimum- Rs.1000Minimum- Rs.100
 Maximum- No limitMaximum- Rs.1,50,000
Rate of Interest6.9% per annum6.8% per annum
Taxation PolicyReturns on KVP are taxableEnjoys tax benefits and exemption under Section 80(c)
LiquidityLock-in period of 2.6 years onlyLock-in period of 5 or 10 years
Premature WithdrawalWithdrawals are allowed before maturityWithdrawals before maturity are very difficult and restricted
LoansCan be used as a guarantee to take loans for housing etcCan be used as a guarantee to take loans for housing etc

What do you need to avail the scheme?

  1. Form A must be duly submitted to an India Post Office branch or other specific banks
  2. Form A1, if the application is extended through an agent
  3. KYC documents like Aadhaar Card, PAN card, Passport, Voter’s  ID, Driving license, or any document that serves as an ID proof

Once the applicant provides these documents to the Post office, applicant would be offered with a KVP certificate. If in any case the Kisan Vikas Patra gets damaged or lost, the scheme holder can apply for a copy of the same. Application of the duplicate copy would be through the same institution where the certification was availed for the first time.

In conclusion

Getting the best of government schemes may go a long way in safe investment, which will offer guaranteed returns. Investments are a great way of not only safeguarding money but also ensuring that you get the best out of money just sitting idle. Compounding is a slow but sure fire way of increasing the jingle in your vaults and if there happens to be the surety offered by government, there’s nothing better than that.

To know more about the Kisan Vikas Patra, click here.