Kisan Vikas Patra (KVP) is a money double scheme of government of India where your principal grows at a rate of 6.9% per annum and gets doubled in 124 months (10 years & 4 months). This scheme is available through most of the post-offices of India. Do note that the minimum investment required to begin with this scheme is Rs. 1000 with no upper limit. Moreover, investing a lump sum amount today will get you double the amount by the end of the 124th month.
Kisan Vikas Patra (KVP) is a savings scheme provided by the Indian Government. Available in all Post Offices of India, the investments made in the scheme are issued as KVP certificates in the name of the investor. KVP scheme provides substantial returns on the completion of its maturity period via high-interest rates. This risk-free investment tool was introduced by India's Government for encouraging its citizens to do long-term savings.
KVP interest rates remain the same for three types of KVP investments, and the variations are based on the number of individuals who are investing in a policy. Investors can opt for three types of KVP plans:
The rates of KVP Interest changes periodically as per the announcements made by India's Finance Ministry, and they remain fixed for the specified quarter. The applicable rate of interest determines the maturity tenure of the investment. For the financial year, 2020-2021, the KVP scheme's rate of interest is 6.9% p.a for an investment tenure of 124 months.
Manually calculating will cause some errors. Hence, use Fintra's KVP Calculator to get accurate results. Fill in the spaces with the required details:
1. Amount Invested
2. KVP Annual Interest Rate
3. Time Period (Years)
Hit the 'Submit' button, and the results will appear on the side of the calculator.
Currently, due to the KVP’s interest rate, investing in it does appear to be an interesting option for investment. There are numerous benefits associated with this policy, and they’re as follows:
Under certain circumstances such as a loss, mutilated, defaced, or stolen KVP certificate, you can apply for a duplicate KVP certificate. To do this, you've to provide the identity slip that was provided to you at the time of issue of the original certificate.
The KVP certificates are easily encashed at the issuer post office. If there's an emergency, you can encash it through other post offices, too. At the time of encashment, you've to show the identity slip along with the KVP certificate.
No, NRIs aren't eligible to purchase the KVP certificates.
According to the rules for purchasing KVP, there is no provision of a Kisan Vikas Patra by the ‘Karta’ on behalf of a HUF.
Yes, KVP's interests are taxable on accrual basis every financial year, and the tax is applied on the same as ‘Income from other sources’.
You can encash KVP from the same post office from which it was issued. Certain formalities and applicants are required to be completed to encash KVP from another post office. The identity slip given to you at the time of issue has to be submitted while encashment. Also, if you desire to do premature encashment, then the same process is carried out.
No, Non-Resident Indian’s (NRIs) cannot acquire KVP certificates and apply for the scheme.