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Nov 23, 2018

All About Kisan Vikas Patra from Account Opening to Death Claim

Kisan Vikas Patra (KVP) is a small savings scheme for interest. Government regulates Kisan Vikas Patra investment scheme in which the principal money gets doubled during the tenure of investment. KVPs are available at Post Office branches.

Originally introduced in 1988, KVP became very popular due to easy availability, no paper work, ease of transfer, sovereign protection, attractive rate of interest at the inception.

People used to treat it a valuable gift item as the maturity amount was payable to the holder of the certificate.

Kisan Vikas Patra was used rampantly for money laundering and cases of theft of KVP certificates also started rising due to easy transferability and lack of paper work. As KVP had became a money laundering instrument, it was withdrawn in 2011 following recommendation of a government committee.

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KVP has been reintroduced in 2014. KYC norms are mandatory now for stopping money laundry cases

Here are some of the features of the new Kisan Vikas Patra KVP.

  1. To invest in KVP, you don’t have to open any account. You have to visit a nearby Post Office and pay the amount you want to invest.
  2. KVPs are available in the denominations of Rs 1000, Rs 5000, Rs 10,000 and Rs 50,000, and have no maximum limit on investment.
  3. To invest Rs 50,000 or more in KVP, you have to submit proof of your PAN card.
  4. Currently, the rate of interest on KVP is 7.7 per cent per annum, which will make your principal amount double in 112 months, that is in 9 years 4 months.
  5. Investor can withdraw money after lock in period of 2.5 years.  KVP allows to withdraw money after lock in period before maturity.
  6. Nomination facility is also available in Kisan Vikas Patra. In the case of demise of the investor during the investment period, the nominee or the legal heir has to fill a claim application form, asking the Postmaster for settlement of the dues.
  7. The principal amount is completely safe as KVP bears sovereign guarantee of the Government of India.
    All About Kisan Vikas Patra from Account Opening to Death Claim
  8. Government Declares interest rate on Kisan vikas patra on quarterly basis with guaranteed payout.
  9. Tax benefits are not available in KVP. Income tax is payable on investment under Kisan Vikas Patra. Principal and interest both are taxable.
  10. KVPs may be used as a collateral to avail secure loans, which are cheaper than unsecured loans.