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Kisan Vikas Patra (KVP)
First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014.
Kisan Vikas Patra Scheme
Features and Benefits of Kisan Vikas Patra
There are numerous kisan vikas patra benefits that one can receive by investing in this scheme; some of which are:
Who should invest in the KVP scheme?
Any Indian citizen above age 18 can buy a Kisan Vikas Patra from the nearest post office. People from rural India (with no bank account) find this particularly appealing. You can also buy one for a minor or jointly with another adult. Don’t forget to mention the date of birth of the minor and the name of the parent/guardian. A Trust can also buy one, but not an HUF or an NRI.
KVP is a good choice for risk averse individuals, who have surplus money, which they may not require in the near future. It all depends on your risk profile and goals. For instance, people seeking tax-saving schemes have better options like Public Provident Fund, National Saving Certificates and tax saving bank FD Schemes. If you are open for some level of risk exposure, you have the Equity Linked Savings Scheme (ELSS). Hence, play to your financial strengths.
How to invest in Kisan Vikas Patra & the documents required
Investing in Kisan Vikas Patra is simple, as mentioned below.
Collect the application form (Form-A) and submit it duly filled to the PO. If the investment in KVP is through an agent, then the agent should fill Form-A1. You can download these forms online. The Know Your Customer (KYC) process is mandatory and you need to submit the ID proof copy (PAN, Aadhaar, Voter’s ID, Driving License or Passport). Once they verify the documents and receive the deposit, you will get a KVP certificate. Keep this safe as you will need to submit this at the time of maturity. You can also request them to send you the certificate by email.
In short, if Kisan Vikas Patra seems like a worthwhile investment that matches your financial goals, invest immediately. It is easy enough to open and manage. All you need to do is have the amount ready and pay one visit to the nearest post office.
Pre-mature Withdrawal of Kisan Vikas Patra
Kisan Vikas Patra scheme allows an investor to withdraw from the scheme before the maturity date. The lock-in period for pre-mature withdrawal is 2 years and 6 months. The investor can appeal the post office or the bank branch and submit the application for pre-mature withdrawal. However, the amount will also be paid prior to the lock-in period in the following cases-
The maturity proceeds will be credited to the savings bank account. The interest accrued on the amount is taxable.
Click here to calculate income tax payable.
The following documents must be submitted by the applicant at the time of maturity of certificate.