Kisan Vikas Patra (KVP) is a government saving scheme, was specifically designed for the benefit of farmers. Now, it is welcoming to all the citizens. 

This scheme was one of the most popular among farmers, intending to help farmers by offering them to double their investment in 124 months. 

The KVP was first originated in 1988 as a saving certificate for farmers. It was, but, suspended in 2011, as people were misusing it for money laundering purposes. 

To avoid misuse of the scheme, the Government made a few modifications to the guidelines of KVP in 2014. If you need to invest more than Rs. 50,000, your PAN Card is mandatory. If you desire to invest Rs10 Lakh or more further, then presenting all income proofs related documents is compulsory.

Types of KVP certificate options available: 

  1. Single holder type- you can avail of this type of certificate if investing individually for yourself or on behalf of a minor.  
  2. Joint A type – This type of certificate is available to those investing jointly (two individuals). Both investors would get the return. But in case of death of any holder, the only survivor will be eligible to receive the same.
  3. Joint B type – This type of certificate be given jointly to two individuals. Unlike Joint A type, at maturity, either of the two holders or the survivor would get the amount.

Here are the key highlights and benefits of the KVP scheme:

  • Eligibility criteria:
    • A person must be an adult and a resident of India.
    • Hindu Undivided Family and Non-residential Indian are not eligible to invest in KVP.
  • Easy purchasing of the certificate

       You can acquire the certificate from any post office around the country.

  • The interest rate on the scheme 

For the current financial year, investment in KVP carries interest at the charge of 6.9 percent. For instance, the amount invests in KVP certificates get double in 124 months.

  • Limits of Investment 

A person needs to invest a minimum of Rs1, 000 in the scheme. There is no maximum limit for investment in the scheme.

  • Easy Withdrawal procedure:

One can withdraw the total amount after the maturity time. In case you withdraw the funds prematurely, you will not get any interest and will bear a penalty for the same.

If you withdraw the amount after a year, prior to the maturity date, will not suffer from any penalty but earn less interest. Withdrawal after 2.5years will not ask for any fines or penalties. You will receive the whole principal amount with the guaranteed interest.

  • Turning certificate into cash:

One can encash the KVP certificate at the bank branch or post office from where you bought the certificate. However, In case of urgency, can easily encash it at another post office or bank branch, with the consent of the post head or manager of the branch.

  • Taxability of the Scheme

KVP is not meant for investors looking to avoid tax. The principal sum and interest do not have any tax discounts. Yet, it still extends many advantages to investors.

  • Loan against a certificate

People can easily get a loan against their stake in the Kisan Vikas Patra. The KVP certificate will act as a guarantee while applying for a loan. 

Easy steps to invest in KVP: 

  1. Get the application form, and fill the form with the basic information.
  2. Submit the form to the post office or bank.
  3. If you are investing in KVP through an agency then, the agent will help you in filling up the form. You can arrange these forms from the internet.
  4. The Know Your Customer, also known as KYC, evaluation is compulsory and, you need to submit the ID and address proof.
  5. After the verification of documents, you need to deposit the money. 
  6. You will receive a KVP certificate promptly unless you make the payment by cheque or demand draft.
  7. Keep this certificate safe as you will require submitting this at the time of maturity. You can also get your certificate by email.