Kisan Vikas Patra Yojana Interest, Benefits and Profits

Kisan Vikas Patra Scheme is a savings certificate scheme that helps investors grow wealth over a period of time without any risk.

The scheme was first launched in 1988 by India Post in 1988, mainly with farmers in mind and to increase the saving tendency among them and provide them financial support.

The project was closed in 2011, but the new government restarted it in 2014. Although it is named after farmers but now, anyone who meets certain eligibility criteria can invest in it.

It is a long-term project that doubles the investment amount after the investment period.

There is no upper limit of investment in this scheme. This scheme is for those who are not willing to take risk but are looking for guaranteed returns with some extra money. Post Office Kisan Vikas Patra Scheme is very popular for doubling money.

Kisan Vikas Patra interest rate?

The interest rate of Kisan Vikas Patra (KVP) is fixed by the Ministry of Finance which may change from time to time. Current interest rate applicable on KVP is 7.5% per annum (FY 2023-24) as against 7.2% per annum earlier.

Some of the previous years interest rates of Kisan Vikas Patra Yojana are given below:

How many days double?

Any person aged 18 years or above can invest in Kisan Vikas Patra Scheme with a minimum of Tk 1000 or multiples of Tk 100 i.e. Tk 5000, 10,000 or 50,000. It has no upper limit. Earlier you could double your investment in 124 months but now you can double your investment in 115 months (9 years 7 months). So you can now save more in less time than ever before.

What are the types of Kisan Vikas Patra?

KVP Scheme accounts are of three types –

Single Adult Certificate-

In such accounts, an adult is issued a certificate. An adult can take this certificate on behalf of another minor, in which case the certificate will be issued in their name.

Joint A Type Certificate –

In such accounts, a certificate is issued in the name of two persons, both of whom are adults. On maturity, both the account holders will get the payout. However, only one person will be entitled to receive it in case of death of an account holder.

Joint B Type Certificate –

In such accounts also, a certificate is issued in the name of two adults. But on maturity, either of the two account holders or the survivor will get the payout.

Eligibility criteria for Kisan Vikas Patra scheme?

In order to invest in the project you need to fulfill the following eligibility criteria:-

• Applicant must be a resident of India.
• Applicant must be above 18 years of age.
• Adults can apply on behalf of minors.

Documents required to get Kisan Vikas Patra certificate

To get KVP certificate the applicant has to provide copies of the following documents:-

• KVP Application Form
• Identity proof for KYC process (Aadhaar Card/PAN Card/Voter ID Card/Driving License /Passport)
• Birth certificate
• Address proof

Aadhaar and PAN are mandatory

Aadhaar and PAN have now been made mandatory for KVP accounts as per the latest notification issued by the Ministry of Finance. If the applicant does not have an Aadhaar card, the proof of application for Aadhaar should be provided within 6 months of opening the KVP account.

If the applicant already has a KVP account but has not yet submitted the Aadhaar number, it must be done within 6 months from 1st April 2023.

Also, if the applicant has not submitted the PAN at the time of opening the account, it must be submitted within 2 months from the time of occurrence in case of following situations viz.-

• Total deposits in KVP account exceed Rs.50,000.
• If the total credit amount of the account exceeds Rs.1 lakh in any financial year.
• If the sum of total withdrawals and transfers in a month from KVP account exceeds Rs.10,000.

Failure to deposit Aadhaar within the prescribed period of 6 months and PAN within the prescribed period of 2 months will render the account inoperative till such deposit.

Kisan Vikas Patra at Post Office

The process of making investment from Post Office is given below: –

1. First you need to visit the post office to collect the KVP application form
2. Provide relevant details in the form and submit.
3. If investing with the help of an agent, Form-A1 should be filled and submitted.
4. Provide a copy of any identity proof for KYC procedure.
5. KVP certificate will be issued after verification of documents and completion of required deposit. KVP certificate can also be obtained through email on registered email id.

Kisan Vikas Patra online

To apply for Kisan Vikas Patra certificate, you can also download the application form online.

Download savings application form

The procedure for opening KVP account online is as follows-

1. Login to DOP Internet Banking.
2. Click on “Service Requests” listed under the “General Services” section and select “New Requests”.
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 the PO savings account.
5. Click on “Click Here” to read the terms and conditions, agree to the terms and conditions and then submit the application form online.
6. Enter the transaction password, click on “Submit” and view/download the deposit receipt.

Taxability of Kisan Vikas Patra

No tax benefit is available under this scheme. Interest earned is taxable under ‘Income from other sources’ i.e. 10% TDS interest is also deducted from its interest. However, no further tax will be levied on the final maturity amount.

Loan for KVP

Kisan Vikas Patra can be used as collateral while applying for loan, the prescribed application form must be submitted to the concerned post office along with an acceptance letter from the guarantor. However, this undertaking can be made only to the President of India/State Governors, RBI/Co-operative Societies/Co-operative Banks/Scheduled Banks, Corporations (Government/Private)/Local Authorities/Government Bodies and Housing Finance.

Monetization of Kisan Vikas Patra

A Kisan Vikas Patra holder can encash his certificate at any time after 2 years 6 months from the date of issue. For Kisan Vikas Patra encashment, you need to visit the post office that issued the certificate. There submit the identity slip given at the time of issue of KVP certificate and provide a written letter along with the identity slip.

KVP can also be prematurely encashed before maturity but only under the following circumstances-

• In case of death of a KVP holder or any/all account holders in case of joint account.
• If seized by an undertaking or by a gazetted officer.
• By order of the court.

Transfer of Kisan Vikas Patra

To transfer Kisan Vikas Patra certificate from one person to another or from one post office to another post office, follow the below mentioned ways-

Transfer from one person to another:

A written letter must be submitted to the post office to transfer the KVP certificate from one person to another. The same will apply in the following situations-

• To the heirs of the deceased.
• From single owner to joint owners.
• From joint owner to one of the owners.
• From the owner to the Judge of Law and other persons as ordered by the Court of Law.
• From single/joint holder to another person.

However in case of transfer note that certificate can be transferred only once in a year from the date of purchase.

Transfer from one post office to another post office:

The KVP certificate can be transferred from the post office from which it was issued to another post office.

To transfer a Kisan Vikas Patra certificate, the person must submit a handwritten consent letter to the post office official. Note that the transferor must be an Indian and eligible to purchase a Kisan Bikash certificate.

Premature withdrawal

Investors can withdraw their funds at any time subject to special conditions under the scheme but there are certain restrictions:

• Premature withdrawal within 1 year will not earn any interest. The investor will also have to pay a penalty as per scheme regulations.
• Premature withdrawals made more than 1 year but within 2 years 6 months will get interest but at lower rate of interest.
• Premature withdrawal after 2 years 6 months will not attract any penalty and interest at applicable rate.

Kisan Vikas Patra related Queries (FAQs):