Reasons why you should not invest in Kisan Vikas Patra KVP

Finance Minister Mr. Arun Jaitley re launched Kisan Vikas Patra after the discontinue it earlier. Kisan Vikas Patra gives annualized return of 8.7% and money is doubled in 100 months. This option to invest money is reintroduced to stop the public in investing in chit fund or ponzi scheme.
Investing in KVP is not a good option when you have many other options available. Some points are as under.

1-  KVP may be a good option where no banking facility is available. But where banking is available PPF may be the good scheme as rate of interest is almost the same of 8.5%  and offer tax benefits which are not applicable in KVP.

2-  Tax saving FDR with State Bank of India gives 8.75% annualized return compare to 8.7 in KVP. Fixed deposit has the maximum liquidity and you can break it anytime and get your money. However there is a cap of maximum 1 lakh rupees FDR compare to no upper limit in KVP.

3-  If we calculate it with inflation index, KVP is total loss for people come in to 30% tax bracket. KVP gives around 6 % return on investment after deducting tax and inflation is around 6-7 % now a days. So it left lesser money than you invested.

4-  KVP is mainly introduced for gold rush as people treats investing in gold and silver a safe and fruitful investment. Now a day’s gold and silver in red but if we see 5 tears horizon, gold and silver gave a great return compare to KVP.

Gold performance report
Percentage %
1 Month
6 Months
1 Year
5 Years
So we can see gold has given good return in 5 years tenure.
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About Nitin Aggarwal

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