Kisan Vikas Patra Scheme: Whenever we consider investing in a bank, government scheme, or policy, we invariably receive advice to opt for long-term investments. Long-term investments tend to yield the highest returns. If you are looking for such a long-term investment scheme, the Post Office’s Kisan Vikas Patra scheme could be the right choice for you.
A key feature of this scheme is that it requires only a one-time investment. Upon completion of the tenure, the invested amount doubles. Currently, the scheme offers an interest rate of 7.5% on the invested amount. It has a maturity period of 115 months—equivalent to 9 years and 7 months. Additionally, the scheme offers several benefits. Let us explore the details.
Start investing with just ₹1,000.
You can start investing in the Post Office’s Kisan Vikas Patra scheme with as little as ₹1,000. There is no upper limit on the investment amount. Any Indian citizen aged 10 years or older can open an account under this scheme. For minors, a guardian can open the account and deposit the funds.
Deposit ₹2,000 and get ₹4,000.
If you invest ₹2,000 in the Kisan Vikas Patra scheme, you will receive ₹4,000 upon the completion of the 115-month (9 years and 7 months) maturity period. This results in a gain of ₹2,000 over the initial investment, with that ₹2,000 representing the income earned from interest.
Deposit ₹3,000 and get ₹6,000.
If you deposit ₹3,000 in the Kisan Vikas Patra scheme, you will receive ₹6,000 after 115 months. This means you earn an additional ₹3,000, which represents the income generated from interest. The final amount differs if you close the account prematurely.
Tax benefits available under the scheme
Investors in the Kisan Vikas Patra (KVP) scheme are liable to pay tax on the interest earned. However, the government offers tax benefits under Section 80C of the Income Tax Act. Therefore, if you plan to invest in this scheme, it is advisable to familiarise yourself with the relevant tax implications.
Loan facility for investors
Investors may sometimes face a sudden need for funds without wanting to make a premature withdrawal, as early withdrawal entails a financial loss. In such cases, the KVP certificate can be pledged to a bank or an authorised institution to avail of a loan. This requires filling out a specific form linked to the post office, after which the bank or institution approves the loan. This allows you to secure a loan without incurring a financial loss.
Circumstances allowing premature account closure
While the KVP scheme generally does not allow for premature closure, exceptions are made in cases such as the account holder’s death, a court order, or other specific circumstances. If the investment has been held for at least 2.5 years, the rules allow for the withdrawal of the full amount, including interest, upon closure. Different rules apply for closures prior to this period.
Facility to transfer the account to another person
A key feature of the Kisan Vikas Patra is the ability to transfer the account to another person. Additionally, the scheme supports joint accounts, allowing up to three individuals to hold an account together. It is essential to designate a nominee when opening the account; this ensures a smooth process for claiming the funds in the event of the account holder’s death.