Kisan Vikas Patra: The Kisan Vikas Patra (KVP) scheme is a flagship savings scheme launched by the Government of India in 1988, primarily for farmers, but is now open to all citizens. Under this scheme, investors can invest as little as Rs 1,000 and earn guaranteed returns by keeping their funds invested for approximately 115 months (approximately 9.5 years). The KVP scheme offers investors a 7.5 percent interest rate, which is subject to quarterly revision by the government. There is no maximum investment limit, so investors can secure as much as they wish.
Rules and Penalties on Premature Withdrawal
Although the Kisan Vikas Patra scheme has a 115-month investment period, many investors may wish to withdraw funds before this period, depending on their needs. This scheme offers this option, but with certain conditions and penalties. First, there is a 30-month lock-in period after investing, during which you cannot withdraw your funds. If you withdraw after 30 months, you will receive the full amount, including interest.
However, if the withdrawal is made before 30 months, the interest earned will be reduced and a penalty will also be payable. For example:
– If withdrawal is made before 1 year, only the invested amount is returned, no interest is earned and a penalty is also payable.
– Withdrawals between 1 year and 2.5 years (30 months) will earn less than 7.5% interest, along with a penalty.
– Withdrawal after 2.5 years or 30 months results in full refund of interest without any penalty.
Tips for investors
The Kisan Vikas Patra scheme is a safe investment option for those who want to preserve their funds for a long time and are looking for secure returns. Investors can double their money after 115 months, which is a major highlight of this scheme.
Completing the 30-month lock-in period is particularly beneficial because it avoids associated penalties and interest deductions. Investors who made premature withdrawals should reconsider their decision to maximize their returns.
Other benefits and features
There is no maximum investment limit for Kisan Vikas Patra, making it suitable for both small and large investors. Investors can obtain it in the form of a certificate from post offices and select public sector banks. The scheme also offers a nomination feature, allowing the amount to be transferred to the nominee in the event of the investor’s death.
The Kisan Vikas Patra scheme is a reliable and safe government scheme that encourages savings and provides financial security. This scheme is particularly useful for those looking to invest for the long term.
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