Kisan Vikas Patra Scheme – KVP Interest Rate, Features, Benefits

Kisan Vikas Patra Interest Rate 2023

KVP Interest rate may change periodically based on the announcements made by the Finance Ministry. The current interest rate applicable to KVP is 7.5% per annum (Q3 FY 2023-24) which will double your investment in 115 months. To know the historical interest rates offered under the Kisan Vikas Patra scheme*, click here.

Features of Kisan Vikas Patra

Post Office Kisan Vikas Patra scheme is a fixed return scheme that offers guaranteed returns and is backed by the government of India. The salient features of the Kisan Vikas Patra scheme are as follows:

1. Purchase of  Kisan Vikas Patra Certificate

Certificates can be purchased by

• A single adult
• Joint A Account (Maximum 3 adults)
• Joint B Account (Maximum 3 adults)
• Minor above 10 years of age
• An adult on behalf of a minor or a guardian on behalf of a person of unsound mind

2. Long-Term Savings

Kisan Vikas Patra account can be opened with a minimum initial deposit of Rs. 1,000. You can invest an amount in multiples of Rs. 100 and there is no maximum limit on KVP investments. However, Kisan Vikas Patra certificates are currently available in denominations of Rs. 1,000, Rs. 5,000, Rs. 10,000, and Rs. 50,000. Also, Kisan Vikas Patra allows you to stay invested for close to 10 years and doubles your money which results in long-term wealth creation.

3. Complete Security

Kisan Vikas Patra is a government-backed instrument and offers complete security and guaranteed returns. The amount that you will receive at the end of the term is declared on the certificate,  which offers security on your investment and the amount that you will receive at the end of the term.

4. Where to Buy Kisan Vikas Patra Certificate From

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.

5. Collateral for Loan

Kisan Vikas Patra can be pledged/transferred as security, that is, used as collateral when applying for a loan, by submitting the prescribed application form at the concerned Post Office along with an acceptance letter from the pledgee. However, this pledging can only be made to the President of India/Governor of the State, RBI/Co-operative Societies/Co-operative Banks/Scheduled Banks, Corporations (public/private)//Local Authorities/Government Companies and Housing Finance Companies.

6. Premature Withdrawal Facility of Kisan Vikas Patra

Premature encashment is allowed after two and a half years (2 years and 6 months) from the date of issue subject to the following conditions:

• Upon the death of a KVP holder or any/ all of the account holders in case of a joint account
• Upon forfeiture by a pledgee being a Gazette officer
• If ordered by a Court of law

7. The Maturity Period of Kisan Vikas Patra

KVP 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.

8. Transfer Facility of Kisan Vikas Patra

Kisan Vikas Patra can be easily transferred from one Post Office/bank to another as well as from one person to another.

Kisan Vikas Patra Transfer to Another Post Office or Bank

• You have to submit the Application for Transfer of Savings Certificates at the nearest Post Office or bank
• Except for ‘A’ type certificates, the application must be signed by the holder or holders, so that one of the joint account holders can sign the application in case the other dies

Kisan Vikas Patra Transfer to Another Person

In the following cases, a  KVP certificate can be transferred from one person to another only with the consent of an officer of the post office/bank:

• To the heir of a deceased person
• To the court of law from the holder or to any person who is legally specified by the court of law
• In case the transferee is one, from a single holder to the names of joint holders can be transferred
• Can be transferred from joint holders to one of the other joint holders
• From single/joint holders to another person

In case the following conditions are followed and an authorized postmaster/bank officer gives the consent, the KVP Certificates can be transferred using the Application of Transfer of Savings Certificates from One Person to Another:

1. As per the rules, if the transferee is eligible to purchase the certificate
2. The transfer must be as per one of the conditions mentioned below and only If the transfer is made once a year is completed from the date of certificate purchase or if the transfer is made before one year is completed:
   • For instance, if you have transferred your KVP Certificate to a close relative casually without any legal reason. (close relative could be a husband, wife, lineal ascendent or descendent, brother, or sister or anyone else)
   • Transfer  made to the heir/ nominee of the deceased holder
   • Transfer from the holder to the court of law or to any person as specified by the court of law
   • Transfer made in accordance with pledging the certificate at Reserve Bank of India, a cooperative society, or a scheduled bank
   • If the transfer is made in the name of the survivor if one of the joint holders dies

Note: The transfer is not possible with respect to a certificate held by or on behalf of a minor until the minor is alive.

Read more on Kisan Vikas Patra Transfer

9. Nomination Facility for KVP Scheme

The nomination facility can be availed by filling up the KVP Application form while purchasing the Kisan Vikas Patra. In case, the nomination facility is not opted at the time of purchasing the KVP certificate, the single holder or the joint holders can do the same after purchasing the certificate any time before the maturity period by submitting the same form.

Moreover, in case you have more than one registered certificate and on different dates then there will be different applications for the nomination/variation/cancellation.

10. Taxability of  KVP Scheme

Kisan Vikas Patra 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.

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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

Eligibility Criteria

The following are the eligibility criteria for investing in the Kisan Vikas Patra scheme:

• The applicant has to be an adult resident of India.
• A parent/guardian may invest on behalf of a minor or person of unsound mind
• Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) cannot invest in Kisan Vikas Patra.

Aadhaar and PAN Now Mandatory for KVP Account

• As per the latest notification issued by the Finance Ministry, it is mandatory to provide your Aadhaar number and PAN to open a new KVP account. In case an Aadhaar has not been assigned to you, you need to provide proof of application of enrollment for Aadhaar or enrollment ID at the time of account opening and furnish the Aadhaar number to the Accounts Office within 6 months from the date of opening the account.
• In case you already have an existing KVP account and have not submitted your Aadhaar number, you need to do so within a period of 6 months with effect from 1st April 2023. Moreover, if you have not submitted your PAN at the time of account opening, you need to submit the same within a period of 2 months from the date of happening of any of the following events, whichever is earliest, namely:

– The balance at any given time in the account exceeds Rs. 50,000

–  The aggregate of all credits in the account in any financial year is more than Rs. 1 lakh

–  The aggregate of all withdrawals and transfers in a month from the account is more than Rs. 10,000

• Failing to submit Aadhaar within the specified period of 6 months and PAN within the specified period of 2 months will lead to the account becoming inoperational till the time Aadhaar number and/or PAN is submitted to the accounts office

Note: We have taken this information from The Gazette of India. To know more, click on https://egazette.nic.in/WriteReadData/2023/244822.pdf

Documents Required to Get Kisan Vikas Patra Certificate

The applicant must furnish copies of the following documents to get a 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:

Link: Download Kisan Vikas Patra Form

Steps to Open KVP Account Online

You can open a KVP account online by following the steps given below:

1. Login to DOP internet banking
2. Click on “Service Requests” listed under the “General Services” section and select the “New Requests” option
3. Select “KVP Account – Open a KVP Account (For KVP)”
4. Enter the minimum deposit amount for KVP and select your debit account linked to PO Savings account
5. Click on “Click Here” to read terms and conditions, agree to the terms and conditions and then submit the application online
6. Enter the transaction password, click on “Submit” and view/download the deposit receipt

KVP Maturity Period

According to the latest amendments in the scheme, the maturity period is 9 years 7 months (115 months).

The invested amount is doubled after the completion of the scheme tenure. For example – If an individual has invested Rs. 1,00,000, he/she will get Rs. 2,00,000 at maturity.

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.

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 and submit it along with all the required documents at the registered Post Office:

Link: Download KVP Transfer Form

Documents Required for KVP Post Office Transfer

• Duly filled and attested ‘Application for Transfer of Savings Certificates from One Post Office or Bank to Another’
• 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 the ‘Application of Transfer of Savings Certificates from One Person to Another’ for the transfer of KVP Certificate from one person to another at the registered Post Office. This transfer is possible in the following cases-

• On the account holder’s death to his/her nominee/legal heirs.
• On death of account holder to joint holder(s)
• On the court’s order
• On pledging of account to the specified authority

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.

Points to be Noted

Here are a few key things that you must consider when you invest in the Kisan Vikas Patra:

• 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

Kisan Vikas Patra vs Fixed Deposits

A Fixed Deposit is referred to as 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:

Parameters	KVP	FD
Investments	Minimum investment of Rs.1000 required whereas there is no capping on maximum investment	Minimum- Rs. 500 Maximum- Not Limited
Rate of Interest	7.5%	Differs from bank to bank
Maturity	9 years 7 months (115 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 ranges from 7 days to 10 years
Premature Withdrawals	Withdrawals are allowed before maturity but it is advised to keep the corpus invested for 124 months 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. Given below is a basic comparison between Kisan Vikas Patra and NSC:

Parameters	KVP	NSC
Investments	Minimum- Rs.1000 Maximum- No limit	Minimum- Rs.100 Maximum- Rs.1,50,000
Rate of Interest	7.5% per annum	7.7% 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 115 months 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.

Kisan Vikas Patra Interest Rates: Historical

Time Period	KVP Interest Rate
Q2 FY 2023-24	7.5%
Q1 FY 2023-24	7.5%
Q4 FY 2022-23	7.2%
Q3 FY 2022-23	7.0%
Q2 FY 2022-23	6.9%
Q1 FY 2022-23	6.9%
Q4 FY 2021-22	6.9%
Q3 FY 2021-22	6.9%
Q2 FY 2021-22	6.9%
Q1  FY 2021-22	6.9%
Q4 FY 2020-21	6.9%
Q3 FY 2020-21	6.9%
Q2 FY 2020-21	6.9%
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 been compounded annually

Frequently Asked Questions (FAQs)

Q1. Can the Post Office issue a duplicate Kisan Vikas Patra?

Ans. 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 along with the Application for the Issue of Duplicate Savings Certificates

Q2. Can Kisan Vikas Patra be encashed only at the Issuer Post Office?

Ans. 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?

Ans. 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?

Ans. 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)?

Ans. 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?

Ans. 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, ‘Application for Transfer of Savings Certificates from One Post Office or Bank to Another’ needs to be submitted to the Post’s Director General. On the other hand, in case of transfer from one person to another ‘Application of Transfer of Savings Certificates from One Person to Another’

Q7. Is Kisan Vikas Patra interest taxable?

Ans. 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?

Ans. 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?

Ans. 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 applications 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?

Ans. 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?

Ans. 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. Do banks offer a Kisan Vikas Patra calculator?

No. Banks do not offer a Kisan Vikas Patra or KVP calculator. Your investment amount simply doubles up at the end of the scheme tenure.