This government scheme offers more interest rate than SBI FD, doubling the investment amount in 123 months | Rare Techy


Kisan Vikas Patra

This government scheme offers more interest rate than SBI FD, doubling the investment amount in 123 months

Photo: BCCL

Kisan Vikas Patra (KVP) is a government-sponsored savings scheme that was initially designed exclusively for farmers but is now open to everyone. Although the name of the scheme suggests that it is only for farmers, you can also invest in the scheme.

Under this scheme, you can make a minimum investment of Rs 1,000 to buy a KVP certificate. The amount is invested for a minimum period of 123 months or 10 years and 3 months. Investments can only be made in increments of Rs 1,000, and there is no upper limit on investments, which means you can invest as much as you want. For investment above Rs 50,000, you have to produce your PAN details.

Kisan Vikas Patra: main features

Unlike other government-sponsored savings schemes, KVP does not provide any tax benefits. Currently, the interest rate on savings in the KVP scheme is compounded at 7% per annum, which means that at maturity your investment will almost double in 123 months. However, the interest rate is reviewed and changed every three months by the government. The rate offered by this small savings scheme is higher than the interest rate offered by State Bank of India which is 6.25% on deposits of 2-3 years and 6.9% for senior citizens. offers on deposits that mature in 5-10 years.
The KVP scheme is a low-risk savings tool that is safe as it is backed by the government. Certificates are issued for the amount deposited in the scheme. The minimum amount one needs to invest in this scheme is Rs 1,000. Investments should be made in increments of Rs 1,000 as the certificates are available in only four denominations – Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. For investments above Rs 50,000, PAN card is mandatory. The project allows you to purchase a certificate for yourself or on behalf of your child or jointly with another adult. The profitability of investments in a KVP certificate is decided by the Ministry of Finance and is not directly related to market risks.

Who can invest?

Any Indian citizen above 18 years of age can invest in this scheme and purchase a certificate. There is no upper age limit for the scheme, which means senior citizens can also invest in the scheme. The scheme also allows minors to invest and buy a KVP certificate. However, the account must be taken by an adult. Minors can only purchase a certificate on their behalf with the consent of an adult. Only those Indians residing in India are eligible to purchase a KVP document. Non-resident Indians are not allowed to invest in a KVP scheme. Except for NRIs, Hindu-Unified Families cannot purchase a KVP certificate.

The scheme allows trustees to buy KVPs but companies cannot buy a KVP certificate. One can purchase a KVP certificate from the nearest post office or one of the selected banks that offer the certificate. This makes the map easy to access. If you need to move out of the city where you purchased the certificate, you can transfer your certificate from one post office to another. You can also choose to transfer your KVP certificate to someone else. The program allows you to designate a family member who will be eligible to withdraw money in the event of your death.

Closing time

The plan has a minimum tenure of 30 months or two and a half years. If the certificate holder decides to withdraw the money after two and a half years after purchasing the certificate, no penalty will be charged. Interest on the funds will also be paid to the investor. Any embezzlement before two and a half years can be penalized or result in reduced benefits. If you withdraw within one year of the purchase, a penalty will be charged and you will not receive any interest. If you withdraw after one year but before two and a half years, there is no penalty but the interest you get will be reduced. Both the interest rate and the maturity period are subject to change depending on the prevailing interest rates in the market.


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