Recent in news: Central Government changed the interest rate on Kisan Vikas Patra(KVP). Deposits made into KVP accounts will now earn an interest rate of 7.2% annually compounded. Earlier the interest rate offered on KVP was 7%. At 7.2% interest, the investment in the KVP account will double in value after 120 months.
What is Kisan Vikas Patra?
Kisan Vikas Patra is a saving certificate scheme that was launched to encourage long-term financial discipline.
When Kisan Vikas Patra was Launched?
The Kisan Vikas Patra was introduced by India Post in the year 1988. The scheme was closed in 2011 by the Government of India after a Government Committee suggested that this scheme can be misused for money laundering purposes. The Kisan Vikas Patra (KVP) was later relaunched in the year 2014.
Tenure of Kisan Vikas Patra
According to the 2014 amendment of Kisan Vikas Patra, the scheme provides a tenure period of 118 months with a minimum investment of Rs. 1000.
Benefits of Kisan Vikas Patra
- The scheme provides flexible denominations ranging from Rs.100 to a maximum of Rs.50,000.
- Kisan Vikas Patra is a government scheme and hence, it provides guaranteed returns to the investors.
- There is no Maximum limit but a minimum limit of 1000.
- KVP is a risk-free investment with the same interest rate throughout the year.
- KVP allows premature withdrawal with a lock-in period of 2 years and 6 months.
- Kisan Vikas Patra can be transferred to any other eligible individual. The new holder must submit all the required documents and should also get approval from the post office before availing of the benefits.
- There is no TDS for money withdrawn from KVP after the expiry of the maturity date.
EigibilityCcriteria of Kisan Vikas Patra
A single adult, a Joint Account (up to 3 adults), a guardian on behalf of a minor or on behalf of a person of unsound mind, or a minor above 10 years in his own name can open Kisan Vikas Patra.
Types of Accounts in Kisan Vikas Patra
- Single Holder Type Account
- Joint A- Type Account
- Joint B- Type Account.
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