Kisan Vikas Patra (KVP) is a savings scheme available at India Post Offices in the form of certificates. It is a fixed rate small savings scheme designed to double your investment after a predetermined period of time (124 months in the currently available issue).
The scheme is designed to encourage long-term investment and savings amongst the masses. It is suitable for investors who are reluctant to risk taking, have surplus money and are looking for assured returns.
As per current rules, KVP certificates can be purchased from select public sector banks as well as from India Post Offices.
Types of Kisan Vikas Patra
- Certification of a Single Holder: Furnished to an individual adult or on behalf of a minor
- Joint A: Furnished to two adults jointly. This is payable to both the individuals or the one who survives till maturity
- Joint B: Furnished to two adults jointly and is paid to either of the owners or to the one who survives till maturity
KVP is a fixed return scheme backed by the government that offers guaranteed returns. The following are some key features of the scheme :
- KVP Account can be started with a minimum initial deposit of Rs.1000 (in the multiples of Rs.100)
- Certificates are currently available in denominations of Rs. 1,000, Rs, 5,000, Rs. 10,000, and Rs. 50,000.
- Currently, there is no maximum limit on KVP investments.
- Certificates are available at all India Post Offices and KVP Application forms are available online as well as at India Post Offices and select banks.
- Premature encashment allowed after two and a half years subject to terms and conditions.
- The maturity period may change based on rate changes made by the Ministry of Finance. However, the maturity value is pre-printed on the certificate issued.
- Kisan Vikas Patra can be easily transferred from one post office to another as well as from one person to another.
The following is the eligibility criteria for investing in the KVP scheme:
- The applicant has to be an adult resident of India.
- A parent/guardian may invest on behalf of a minor.
- Hindu Undivided Families (HUFs) and Non-Resident Indian (NRIs) cannot invest in Kisan Vikas Patra.
Interest Rates associated with the scheme
The rate of interest applicable to Kisan Vikas Patra (KVP) may change periodically based on the announcements made by the Finance Ministry. The current interest rate applicable to KVP is 6.9% per annum which will double your investment in 124 months.
The following are the historical interest rates offered by the Kisan Vikas Patra scheme* :
|Time Period||Interest Rate of KVP|
|Q1 FY 2020-21||6.9%|
|Q4 FY 2019-20||7.6%|
|Q2 FY 2019–20||7.6%|
|Q1 FY 2019–20||7.7%|
|Q4 FY 2018-19||7.7%|
|Q3 FY 2018-19||7.7%|
|Q2 FY 2018-19||7.3%|
|Q1 FY 2018-19||7.3%|
*KVP principal has compounded annually
Kisan Vikas Patra (KVP) Calculator
Given below is a descriptive example of calculation of maturity amount and interest rates under Kisan Vikas Patra.
Note: It is assumed that the minimum investment is Rs.1000
|Duration →||15th Jan 2000-28th Feb 2001||1st March 2001-28th Feb 2002||3rd March 2002-28th Feb 2003||After 1st March 2003|
Amount Accrued ↓
|2 Years 6 Months||Rs.1246||Rs. 1209||Rs. 1195||Rs. 1170.51|
|3 Years||Rs. 1302||Rs. 1274||Rs. 1256||Rs. 1207.95|
|3 Years 6 Months||Rs. 1407||Rs. 1327||Rs. 1305||Rs. 1267.19|
|4 Years||Rs. 1478||Rs. 1409||Rs. 1382||Rs. 1310.8|
|4 Years 6 Months||Rs. 1585||Rs. 1470||Rs. 1439||Rs. 1355.9|
|5 Years||Rs. 1668||Rs. 1572||Rs. 1534||Rs. 1435.63|
|5 Years 6 Months||Rs. 1779||Rs. 1644||Rs. 1602||Rs. 1488.49|
|6 Years||Rs. 1874||Rs. 1770||Rs. 1672||Rs. 1543.3|
|6 Years 6 Months||Rs. 2000||Rs. 1857||Rs. 1800||Rs.1649.13|
|7 Years||NA||NA||Rs. 1883||1713.82|
|7 Years 3 Months||NA||Rs. 2000||NA||NA|
|7 Years 6 Months||NA||NA||NA||1781.06|
|7 Years 8 Months||NA||NA||Rs. 2000||NA|
|8 Years & 8 Years 7 Months||NA||NA||NA||Rs. 1850.93|
|8 Years 7 Months||NA||NA||NA||Rs. 2000|
|More than 8 years 7 Months||NA||NA||NA||NA|
KVP Maturity Period
According to the latest amendments in the scheme, the maturity period is 10 years and 4 months (124 months).
The invested amount is doubled after the completion of the scheme tenure. For example: If an individual has invested Rs.10,000, he/she will get Rs.20,000 at maturity.
Documents Required to get Kisan Vikas Patra Certificate
The applicant must furnish copies of the following documents to get KVP certificate:
- Identity proof for KYC process (Aadhaar card/PAN/Voter ID card/Driving License/Passport)
- KVP Application Form
- Address Proof
- Date of Birth certificate
Download Kisan Vikas Patra Form
To apply for Kisan Vikas Patra certificate, you need to download the application form online or get it directly from the Post Office. This form needs to be filled and submitted at the Post office. Here is a quick link to the Kisan Vikas Patra Form:
Points to be noted:
- The form should be addressed to the respective Postmaster General of the Post Office where it is being submitted
- The amount of purchase must be clearly mentioned in the form. Avoid cuttings and rewriting
- Payments against the KVP form can be made via Cheque or cash
- In case you are making payment through cheque, please specify the cheque no. on the form
- Mention if KVP is purchased on single or joint ‘A’ or joint ‘B’ subscription basis. If it is purchased jointly, specify the names of both the beneficiaries
- In case the beneficiary is a minor, mention his/her Date of Birth (DOB), Parent’s name, Guardian’s name
- Full name, date of birth and address of the nominee (if any) must be mentioned on the form
- On submitting the form, a KVP certificate will be provided with the name of the beneficiary, Date of maturity and the maturity amount
How to transfer Kisan Vikas Patra Post Office online?
For the convenience of subscribers, the Department of Posts, India has granted access to transfer of certificate from one post office to another.
To initiate the transfer from the registered post office to any other post office, the account holder must fill the KVP Transfer Form-B and submit it along with all the required documents at the registered Post Office:
Documents required for KVP Post Office Transfer:
- Duly filled and attested Form B
- Proof of Identity (Aadhaar Card/PAN Card/Driving License/Voter ID)
- Proof of Address (Passport/Electricity Bill/Water Bill/Bank statement)
- Original KVP Certificate
- Application validating the transfer, signed by the account holder
How to transfer KVP from one person to another?
The subscriber must submit a written application for the transfer of KVP Certificate from one person to another at the registered Post Office. This transfer is possible in the following cases-
- Transfer of Certificate of a deceased person to his/her heir
- From a single owner to joint owners
- From joint owners to a single owner
- From the beholder to the judge of law
Premature Withdrawals from Kisan Vikas Patra
Investors are allowed to withdraw their funds at any given point of time under the scheme but there are certain limitations to it :
- Premature withdrawals made within a period of 1 year will not receive any interest. The investor will also have to pay a penalty as per scheme regulations.
- Premature withdrawals made after a period of 1 year and up to 2.5 years will receive interest but at a reduced rate.
- Premature withdrawal after a period of 2.5 years will not attract any penalties and will also receive interest at the applicable rate.
Premature encashment value calculation
Here is an example of calculation of amount credited on premature encashment of the KVP certificate. Let’s assume that the certificate denomination was Rs.1000:
|Encashment After||Amount to be Received (Including Interest)|
|2.6 yrs but less than 3 yrs||Rs.1,176|
|3 yrs but less than 3.6 yrs||Rs.1,215|
|3.6 yrs but less than 4 yrs||Rs.1,255|
|4 yrs but less than 4.6 yrs||Rs.1,296|
|4.6 yrs but less than 5 yrs||Rs.1,339|
|5 yrs but less than 5.6 yrs||Rs.1,383|
|5.6 yrs but less than 6 yrs||Rs.1,429|
|6 yrs but less than 6.6 yrs||Rs.1,476|
|6.6 yrs but less than 7 yrs||Rs.1,524|
|7yrs but less than 7.6 yrs||Rs.1,575|
|7.6 yrs but less than 8 yrs||Rs.1,626|
|8 yrs but before 8.6 yrs||Rs.1,680|
|8.6 yrs but less than 9 yrs||Rs.1,735|
|9 yrs but before maturity||Rs.1,793|
|On maturity||Rs. 2,000|
Taxability of Kisan Vikas Patra
There are no tax-benefits available under this scheme. The interest accrued is taxable under ‘Income from Other sources’, paid every year. And, TDS of 10% is subtracted from the interest. However, the final amount on maturity is exempted from tax deductions.
Benefits of Kisan Vikas Patra
KVP is not designed to attract investors looking to save tax. The principal amount and interest do not have any tax deductions. However, it still offers a few key benefits to investors. Some of those benefits are explained here :
- Guaranteed returns as KVP certificate is a government-backed instrument.
- Long-term wealth creation as a Kisan Vikas Patra allows you to stay invested for close to 10 years and doubles your money.
- Flexible investment instrument as there is no upper cap on KVP.
- Kisan Vikas Patra can be used as collateral for securing loans at preferred rates from banks.
- Transferable from one person to another as well as from one post office to another.
Kisan Vikas Patra vs Fixed Deposits
A Fixed Deposit is referred to a financial instrument regularised by the banks or NBFCs, providing higher interest rates to investors than saving accounts. Here is a basic comparison between KVP and FD:
|Investments||Minimum investment of Rs.1000 required whereas there is no capping on maximum investment||Minimum- Rs.50|
Maximum- Not Limited
|Rate of Interest||6.9%||Differs from bank to bank. Highest ROI is offered by IDFC bank i.e, 8.50%|
|Maturity||10 years and 4 months||10 years. However, subscribers can withdraw money after 7 days from the date of investment|
|Tax Treatment||Returns on KVP are taxable||Tax saver FDs are tax exempted for up to Rs.1.5 Lakh under Section 80(c)|
|Lock-in periods||Lock-in period of 2 and a half years||No lock-in period. The tenure of Fixed deposits range from 7 days to 10 years|
|Premature Withdrawals||Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 8 years to get best returns||Money can be withdrawn as and when the subscriber wants, after 7 days|
Kisan Vikas Patra vs NSC
National Savings Certificate is an Indian Government Savings bond used as an instrument of small savings and income tax saving scheme in India.
Maximum- No limit
|Rate of Interest||6.9% per annum||6.8% per annum|
|Taxation Policy||Returns on KVP are taxable||Enjoys tax benefits and exemption under Section 80(c)|
|Liquidity||Lock-in period of 2.6 years only||Lock-in period of 5 or 10 years|
|Premature Withdrawal||Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 8 years to get best returns||Withdrawals before maturity are very difficult and restricted|
|Loans||Can be used as a guarantee to take loans for housing etc||Can be used as a guarantee to take loans for housing etc|
Frequently Asked Questions (FAQs)
Q1. Can the Post Office issue a Duplicate Kisan Vikas Patra ?
In the event of a loss, mutilated, defaced, or stolen KVP certificate, the buyer can apply for a duplicate KVP certificate. To do this, the investor has to provide the identity slip provided to him/her at the time of issue of the original certificate.
Q2. Can Kisan Vikas Patra be Encashed Only at the Issuer Post Office?
KVP certificates can be easily encashed at the issuer post office. In case of an emergency, the buyer can encash it through other post offices as well. However, the buyer has to produce the identity slip along with the KVP certificate at the time of encashment.
Q3. Are Co-operative Banks/Co-operative Societies Permitted to Invest in Kisan Vikas Patra?
According to rule 6 of Kisan Vikas Patra, co-operative banks and cooperative societies are not permitted to invest in this scheme.
Q4. Can Kisan Vikas Patra be Purchased by Non-Resident Indians?
NRIs are not eligible to purchase KVP certificates.
Q5. Can Kisan Vikas Patra be Purchased by the ‘Karta’ on behalf of a Hindu Undivided Family (HUF)?
There is no provision in the rules for purchase of a Kisan Vikas Patra by the ‘Karta’ on behalf of a HUF.
Q6. How to transfer KVP Account?
KVP can be transferred from one Post Office to another or from one person to another. In case of transfer from one Post office to another, a set of forms need to be submitted to the Post’s Director General. On the other hand, in case of transfer from one person to another, an application referring to the same needs to be published.
Q7. Is Kisan Vikas Patra interest taxable?
The interests on KVP are taxable on accrual basis every financial year and tax is applied on the same as ‘Income from other sources’.
Q8. Who should apply for Kisan Vikas Patra?
The individuals looking for saving scheme which gives them 100% security, long-term savings, fixed rate of interest and collateral for loan should apply for Kisan Vikas Patra.
Q9. How to encash KVP?
The encashment of KVP can be processed from the same post office from which it was issued. If the subscriber wants to encash it from some other post office, certain formalities and applicants need to be completed. The identity slip allocated to the subscriber at the time of issue must be submitted while encashment. Also, the same process is carried out in case of premature encashment.
Q10. What is the tax benefit for investing in Kisan Vikas Patra Scheme?
There is no tax benefit under this scheme. KVP is not suitable for individuals looking out for tax-saving schemes. The interests accrued are taxable under ‘income from other sources, paid every year. However, the final maturity is exempted from tax deductions.
Q11. What is the maximum investment limit in Kisan Vikas Patra?
KVP certificate can be issued in the following denominations- Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. But, if an individual wants to invest more than Rs.50,000 in the scheme, he/she must submit the PAN card to curb misuse. Hence, there is no maximum limit to investments in the KVP scheme
Q12. Can NRIs avail KVP Certificate?
Non-Resident Indian’s (NRIs) cannot purchase KVP certificates and apply in the scheme.