Kisan Vikas Patra (KVP) was a very popular investment option few years back and it was the only investment option to get your money doubled in 5 years. Yes, in fact I have done few KVPs which were matured last year where I got the money doubled in 5 years & 6 month. This scheme was discontinued with the fear of money laundering few years back. But in 2014, Kisan Vikas Patra (KVP) has been re-introduced. In this article I will share the complete information about this scheme.
Key Features of Kisan Vikas Patra (KVP)
This is a very simple and easy to understand investment scheme that one need not do any kind of research before investing. Here are the simple rules of this scheme.
- One can buy this scheme from Post office and may be few selected list of national banks.
- The amount invested will be doubled in 9 years and 4 months. Which was very less previously. That means if you invest Rs 1000 today, you will get Rs 2000 after 112 months or 9 years & 4 months.
- The current rate of Interest is 7.7%.
- Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
- You can also provide nominee using the facility of nomination is available in post office.
- You can also transfer this certificate in the name of another person or in fact you can transfer KVP from one post office to another post office.
- Pre-mature withdrawal is allowed. Certificate can be encashed after 2 & 1/2 years from the date of issue.
- You can buy KVP in denominations of Rs 1,000, 5000, 10,000 and Rs 50,000. And there is no maximum limit of purchase.
Steps To Open Kisan Vikas Patra (KVP) in Post Office
You have to visit to your nearest post office and ask for opening of Kisan Vikas Patra (KVP) in Post Office. They will provide you the application form to open KVP in post office.
You have to provide your PAN number, identity proof, address proof. There is no need to provide KYC document. Provide the xerox copies providing your signature in every page. also carry the original documents as well.
After verifying all your documents, you have to provide the cash to the post master. He/she will provide you the Kisan Vikas Patra (KVP) certificates. Keep them carefully.
Income Tax Benefits of Kisan Vikas Patra (KVP) in Post Office
There is no such income tax benefit for opening Kisan Vikas Patra (KVP) in Post Office. Means, you are not going to get 80C tax benefit for the money you invest in this scheme. Besides that, on maturity, your interest money will also attract 10% TDS which is one of the disadvantage of this scheme.
How To Withdraw KVP of Other State to a different state post office?
This is also possible now a days and for that you have to visit the CBS or core banking system enabled post office branches. There you have to fill up a form and submit the copies of the KVP scheme. You don’t need to open a post office savings account to get the money. If you have an account, then the money will be transferred to your post office SB account, later you can use the cheque facility. Otherwise, you will get a cheque in your name from post office and you can deposit the same in your savings bank account easily. The entire process may take some depending on the verification process.
So, the effective return on investment from Kisan Vikas Patra (KVP) in Post Office scheme will be much lesser than 7.7% as per their promise. And putting the money for such along period of almost 10 years just get double return is also may not be that much attractive now a days when there are better alternative. At least you can get far better return from PPF account. And if you consider mutual fund way, then 10 year will definitely give you the best return if we have to believe the historical data of stock market. But still, if you want the most secured investment investment option in India and happy with the return then you can open Kisan Vikas Patra (KVP) in Post Office.