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Kisan Vikas Patra Scheme: How to Invest?

In India, government schemes have always played a key role in shaping society. Every year, the government launches various schemes for different purposes. For investment, it has introduced schemes like the National Pension Scheme (NPS) and Sukanya Samriddhi Yojana over time.

When it comes to saving and investing, many of us look for options that are safe, reliable, and easy to understand. In Indian society, people prefer investments that give them a sense of safety and security.

Government-backed schemes act like a helping hand, offering people a chance to invest with minimal risk and steady returns. Whether you are saving for your child’s education, planning for retirement, or simply building a strong portfolio, these schemes provide a structured path for all income groups.

In this blog, we will look at one of the most popular government-backed investment options — Kisan Vikas Patra (KVP).

What is the Kisan Vikas Patra Scheme?

Kisan Vikas Patra (KVP) is a long-term savings scheme launched by the Government of India and operated through post offices. The main attraction of this scheme is that the invested amount doubles after a fixed period at a guaranteed interest rate.

Despite its name, the scheme is not limited to farmers — every Indian citizen can invest. It is particularly suitable for people who want a safe, stable, and long-term investment option.

• KVP was first launched on 1st April 1988.

• It was later re-launched in 2014 by the Department of Economic Affairs.

Key Features of Kisan Vikas Patra (KVP)

1. Minimum and Maximum Investment

• Minimum investment: ₹1,000 (in multiples of ₹100 thereafter).

• Maximum investment: No upper limit.
  This makes it accessible to people across financial backgrounds, especially the middle class.

2. Interest Rate and Maturity

• Current interest rate: 7.5% per annum (compounded quarterly).

• Maturity period: 115 months (9 years and 7 months).

• After this period, your investment doubles automatically.
  This tenure is ideal for long-term investors seeking security and stability.

3. Taxation & TDS

• No TDS (Tax Deducted at Source) is applicable on the interest earned.

• However, the interest income is taxable under “Income from Other Sources” as per your income tax slab.

• Unlike schemes such as PPF or ELSS, KVP does not provide tax deductions or exemptions.

4. Eligibility

• Minimum age: 18 years.

• Only Indian citizens are eligible.

• HUFs (Hindu Undivided Families) and NRIs cannot invest.

• Can be opened as a single account or a joint account (up to 3 holders).

Documents required: Aadhaar card, PAN card, and valid address proof (e.g., utility bill).

5. Nomination Facility

• Nomination can be registered at the time of opening the account or later.

• No fee for initial nomination.

• A small fee of ₹20 is charged for changes in nomination.

• Ensures rightful claim of funds in case of the account holder’s death.

6. Premature Withdrawal

• Lock-in period: 2.5 years.

• Premature withdrawal is allowed only in special cases, such as:

  • Death of the account holder

  • Court order

  • Encumbrance on land

• In such cases, interest is paid but at a lower rate than the full maturity benefit.

Conclusion

Kisan Vikas Patra (KVP) is a safe, simple, and long-term savings scheme for Indian citizens. With a fixed interest rate of 7.5% and guaranteed doubling of investment in 115 months, it provides both stability and security.

It is especially suitable for conservative investors who want assured returns without market risks. However, investors should keep in mind that KVP offers no tax benefits and interest earned is taxable.

FAQs:
 

1. What is the current interest rate in KVP?

The current rate is 7.5% per annum (compounded quarterly), reviewed every three months.
 

2. How long does it take for an investment to double?

Your investment will double in 115 months (9 years and 7 months).
 

3. What is the minimum and maximum investment?

Minimum investment is ₹1,000 (in multiples of ₹100). There is no maximum limit.
 

4. Is TDS applicable on KVP?

No, TDS is not applicable on the interest.
 

5. Can I withdraw before maturity?

Yes, but only after 2.5 years, and only under specific conditions like death, court order, or encumbrance.