Kisan Vikas Patra Scheme

Particulars	Details
Maturity period	115 months
Minimum amount	₹1,000
Interest rate	7.50% per annum
Premature withdrawal	Only after 2.5 years
Tax implications	Investment in KVP yojana qualifies for tax deduction under Section 80C of the Income Tax Act, 1961
Transferability	Can transfer from one person to another and from one post office to another

Disclaimer: The interest rate mentioned in the table is subject to change at the government’s discretion. 

Kisan Vikas Patra Interest Rates

The KVP interest rates are set by the government and are subject to change. At present, the interest rate for KVP stands at 7.50% p.a.

Types of Kisan Vikas Patra Account

There are three major types of KVP account for rural background investors. These types are: 

• Single Holder Certificate: Issued to an individual for self. As an adult, this type of account is open for adults themselves. In the case of a minor, the certification is also issued on behalf of a minor.

• ‘A’ Type Joint Certificate: This certification is for two individuals where both are adults, jointly. Upon maturity, the amount is payable to both adults. In case one adult encounters death, the other adult is liable to receive the full amount. 

• ‘B’ Type Joint Certificate: Issued jointly to two individuals but is not similar to the Joint A type. In this, the amount is payable to either the owners or the sole survivor among both adults.

How to Invest in Kisan Vikas Patra

This Kisan Vikas Patra Scheme is not available on Bajaj Markets. Follow the steps given below to invest in the Kisan Vikas Patra online and offline:

Online Methods

1. Visit your local post office and inquire about enabling e-banking and mobile banking for your account

2. Visit the official e-banking website once approved

3. Complete the registration process using the activation code received within 48 hours

4. Look for the "New User Activation" option and proceed with registration

Once complete, you should be able to initiate your KVP investment online.

Offline Methods

1. Head to your nearest post office to initiate the process

2. Ensure you have all the required documents (identity proof, address proof, etc.) available

3. Inform the staff of your intention to invest in Kisan Vikas Patra

4. Carefully complete the application form provided by the Post Office

5. Double-check the filled form, attach your documents, and submit it to the Post Office staff for processing

Choose the method that best suits your needs and enjoy the benefits of investing in KVP.

Benefits of Post Office Kisan Vikas Patra Scheme

India Post provides the KVP post office scheme and hence, it offers some additional benefits over their regulations. Check out some benefits below. 

• Guaranteed Returns: Irrespective of market fluctuations, it provides a guaranteed return upon maturity. You can check the final maturity amount using a KVP calculator.

• Time Horizon: As the KVP maturity period is 113 months, it also allows the extension of the corpus even after maturity. If the investor wants, they can withdraw the amount or else the sum will generate interest income until withdrawn. 

• Interest Rates: The current Kisan Vikas Patra KVP scheme interest rate is 7.5%. As these rates can vary, the interest accounted for and the sum earned will depend on the year and will ensure higher returns. 

• Taxation System: Other schemes have TDS exemptions when the investor withdraws the sum after maturity. On the other hand, the KVP scheme has no such tax exemption according to Section 80C. 

• Nomination: The investor individuals can also enable a nominee for their account, which can also include a nominee as a minor. 

• Loan Against Investment: Individuals who have invested in the KVP scheme can also take a loan against this scheme at lower interest rates. Here, the KVP certificate will act as collateral. 

Eligibility Criteria

Here’s a list of those who can invest in the KVP scheme:

• An 18-year-old adult

• Up to 3 individuals (joint account)

• A guardian (for a minor)

• A minor above the age of 10 years

Premature Withdrawal From KVP

If you are willing to withdraw your KVP investment before maturity, you can do it through the post office that issued the KVP certificate. If you want to encash the KVP certificate in the post office, you will have to provide your identity slip and complete some formalities.

After an initial KVP lock-in period of two years, individuals can withdraw the KVP certification. According to Kisan Vikas Patra's withdrawal rules, the interest rate will be lower than the expected full rate. It will include the entire principle that was initially higher, as this is a KVP premature withdrawal.

Nomination in KVP Certificate

Here are a few key aspects that you would like to know about nomination in KVP:

• An individual or joint holder of the certificate may apply for nomination by submitting Form C with the required information. If the certificate's sole holder or both joint holders pass away, you can name anyone to receive the certificate’s benefits.

• Nominations can be made any time before maturity by the surviving holder/s presenting Form C. It should be given to the postal or bank in which the certificate is recorded. 

• If the certificate is held by, was acquired, or is on a minor’s behalf, nomination cannot be done. In this case, if the certificate holder/s makes a nomination, it will be modified or cancelled using the D Form.

• If you have numerous certificates registered on various dates, you must submit a separate application for each nomination, cancellation, or variation. These requests are noted on the certificate and become effective as of the registration date.

How to Encash Kisan Vikas Patra Certificate

In case you want to encash or disburse your KVP certificate, you need to visit the Post Office that issued your KVP. However, if you wish to do so at a different Post Office, you may have to go through a few formalities.

Here’s how you can encash your KVP certificate:

• Submit your identity slip provided when acquiring the certificate

• Send a letter with the identity slip to the Post Office

Note: If you wish to withdraw your money before the Kisan Vikas Patra maturity period, you can do so only after 2.5 years.

You can also encash your KVP certificate prematurely under the following circumstances:

• If a court of law orders it 

• On forfeiture by a Gazetted Officer or pledge

• In the case of the demise of the KVP holder or any one of the holders

How to Transfer Your Kisan Vikas Patra Account

1. Transfer from One Post Office to Another

To transfer your KVP certificate from one Post Office to another, you must submit a handwritten consent to the officer. Additionally, you must note that the transferee must meet the eligibility criteria.

2. Transfer from One Person to Another

You must submit a written letter to the Post Office to transfer the KVP certificate from one person to another. However, you can do so only under the following conditions:

• If the KVP certificate is being transferred from the deceased to his/her legal heir

• From single ownership to joint ownership

• From joint ownership to single ownership

• From the owner to an individual as per the court's order or judge of law

Loan Against KVP

If you have a KVP certificate, you can pledge it as collateral to seek a loan from banks. However, you can apply for a loan against KVP only under the following conditions:

• You must have a KVP certificate under your name

• This feature is available for business or personal purposes only

• The loan must be repaid within your KVP tenor

While the KVP Scheme seems like a great investment option for risk-averse investors, you must also check out fixed deposits. Like KVP, it features assured returns and loans against FD.

History of KVP Interest Rates

The table below shows the history of KVP rates since the re-launch of the scheme in 2014.