Are you also planning to invest in something? But don’t know where? Then this article is made for you. When it comes to secure investments with excellent returns, Kisan Vikas Patra, a post office initiative, stands out. This scheme allows your investment to double in just 115 months, offering an attractive interest rate of 7.5%. Additionally, in case of emergencies, you can take out a loan against your KVP account.
When was it launched?
The Kisan Vikas Patra was launched by the Indian Post Office in 1988 as a short-term savings certificate scheme aimed at encouraging long-term financial savings among the public. Initially designed for farmers, it is now accessible to everyone.
As per the official India Post website, the interest on Kisan Vikas Patra (KVP) is calculated on a compounding basis, and taxes are applied to the earnings from this scheme.
What is the maturity period?
The maturity period for Kisan Vikas Patra was originally set at 123 months (approximately 10 years and 3 months) but was later adjusted to 120 months (10 years). Currently, it has been revised to 115 months (or 9 years and 7 months).
There is no cap on the number of accounts you can open under the Kisan Vikas Patra scheme. You can have multiple single and joint accounts, and you can even open a Kisan Vikas Patra account for a child aged 10 or older.
How much can you invest?
There is no upper limit on investments in this account. You can invest any amount you wish, with a minimum investment of Rs 1000. This scheme offers substantial returns with minimal risk.
There’s an easy way to double your money with this scheme. Right now, it offers a 7.5% annual interest rate. So, if someone puts in 5 lakh rupees into Kisan Vikas Patra for a maturity period of 115 months, they’ll earn 5 lakh just from interest. In other words, in about 9 years and 7 months, that initial investment of 5 lakh will grow to 10 lakh.
What if you want to take your money out? Well, you’ll need to hang tight for at least 2.5 years since there’s a lock-in period of two and a half years. Plus, the money you put into the Post Office Kisan Vikas Patra Scheme can get you a tax break of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
To open a KVP account, you need a PAN card due to money laundering regulations. Since 2014, a PAN card has been required for investments over Rs 50,000. If you’re looking to invest Rs 10 lakh or more, you’ll also need to provide a salary slip, bank statements, your ITR, and your Aadhaar number.
KVP is a solid choice for those who prefer a low-risk option, especially if you have some extra cash that you won’t need anytime soon. Even if the market has ups and downs, your investment is guaranteed to grow to a fixed amount.
You can only get a Kisan Vikas Patra of Rs 50,000 at the main post office in your city, but you can open accounts for smaller amounts at any post office.
Can you get a loan on KVP? Absolutely! You can take a loan against your KVP, and the interest rates are usually lower than other options. You can also nominate someone to receive the maturity amount, and transferring Kisan Vikas Patra between post offices or banks is a breeze.
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