Offered by the Government of India, Kisan Vikas Patra (KVP) is a savings scheme available in post offices across India. Investment in the scheme follows the issue of a KVP certificate in the investor’s name. The savings scheme brings substantial returns on the invested amount on the completion of its maturity period via high interest rate. It is a risk-free investment option introduced by the government to encourage Indians for long-term savings.
While high KVP interest rate ensures the return generated is sizable, these are also low-risk investment options which make them popular among Indians. Initially launched by India Post in 1988, this scheme had been revised in the year 2014. Primarily targeted towards semi-urban and rural investors of the country, this scheme is also suitable for urban residents with average to low income.
KVP plans are available in 3 types which an investor can opt for. While the KVP interest rate remains the same for these types of investments, the variations are based on the number of individuals who can invest in a policy.
The Finance Ministry of India decides the Kisan Vikas Patra interest rate which can vary over different quarters in a financial year. Once an individual invests his/her savings in a specific quarter, the prevailing interest rate is applicable for the whole term.
Consequently, the applicable KVP interest rate also affects the maturity tenure for the investment in a specific quarter. The prevailing interest rate on investments in KVP stands at 7.6%. Resultantly, these policies have a maturity period of 113 months.
While it is crucial to know the Kisan Vikas Patra interest rate 2020 along with its investment tenure, it is also essential for investors to understand where they can apply for these certificates. Investors can apply for these investment instruments at a select few financial institutions along with all the post offices.
The KVP interest rate chart for the last few quarters is illustrated in the table below, along with the change in tenures.
|2nd quarter Financial Year 2019-20||7.6%||113 months|
|1st quarter Financial Year 2019-20||7.7%||112 months|
|4th quarter Financial Year 2018-19||7.7%||112 months|
|3rd quarter Financial Year 2018-19||7.7%||112 months|
|2nd quarter Financial Year 2018-19||7.3%||118 months|
|1st quarter Financial Year 2018-19||7.3%||118 months|
Premature withdrawal of investments made in KVP is not allowed within 30 months of investment. Beyond that period, premature withdrawal is only allowed if the owner passes away or there is a directive from any court of law. Under such circumstances, there is no depreciation in the KVP interest rates.
While the KVP current interest rate makes it an interesting option for investment, individuals need to understand the numerous benefits which come with this policy.
Another benefit of investing in these certificates is that if the money is not withdrawn after the completion of tenure maturity, post offices offer additional interest on the existing corpus. Though this interest rate is not as high as KVP interest rates, it is the same as that of savings account at the post office.
The eligibility criteria which are vital to be able to invest in KVP are –
However, NRIs, PIOs, and OCIs are not eligible to invest in this scheme. Additionally, Hindu Undivided Families (HUF) cannot avail the benefits of this scheme either.
The documents necessary to purchase Kisan Vikas Patra and avail the benefits of KVP current interest rate are listed below in detail.
The application procedure for KVP investment is quite easy. Once an investor has checked the KVP interest rate chart and decided on investing in this account, the steps mentioned below should be followed.
Applying for KVP certificates with authorised financial institutions also requires you to follow a similar procedure.
The investment is applicable from the day of payment and investors must keep their KVP certificates safe. This certificate is necessary to withdraw the total amount at the time of maturity.
Designed specifically for the semi-urban and rural population of India, any investor who has disposable money, with a minimum of Rs. 1,000 for a post office, can invest in this scheme. The KVP interest rates which are offered by the Finance Ministry are quite high, and the return is assured. This makes it a good savings option for any individual who does not prefer to invest in instruments exposed to market risks.
Consequently, it can also be a good investment scheme for the urban population, especially for low-income groups who do want hassle-free investment procedure. Kisan Vikas Patra interest rate 2020 offers to double the investment within 113 months, making it a safe savings option.
No, you cannot encash your KVP from a different post office branch than the one KVP was issued at.
No, you cannot apply for investment in KVP certificates online.
You must apply for duplicate KVP certificates at the post office where or financial institutions the original documents were issued. Subject to verification, the concerned issuer provides the duplicate KVP certificates.
Adults can apply for these certificates on behalf of minors, though minors cannot invest themselves.