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Generally when we want to invest money on any investment scheme , we always asks our friends and relatives that where we can invest ? and they suggests the investment schemes which they like most. Then we invest as per their suggestions, that is good as we consider them as our well wisher , But here I want to mention one thing, if we know end to end information of each investment schemes at least it will help us to understand if that investment scheme is good for us or not.
Hence it is better to have a complete idea about each investment scheme where we invest. Therefor this blog will help you to know end to end information of many Indian investment schemes available right Infront of you.
In this blog post I will be explaining my analysis on Kisan Vikas Patra. This will be a complete guide on Kisan Vikas Patra. Please read till end of the blog post to know the complete information about this Kisan Vikas Patra. Lets get started.
Table of Contents
- What is Kisan Vikas Patra (KVP) ?
- What are the features of the Kisan Vikas Patra?
- How Does Kisan Vikas Patra Work?
- Who Can Open The KVP Account?
- Where Do You Open The Kisan Vikas Patra Account?
- How Do You Open The Kisan Vikas Patra Account?
- What is the deposit limit for Kisan Vikas Patra savings scheme?
- Income Tax Benefits of Kisan Vikas Patra savings scheme
- Maturity Period of Kisan Vikas Patra Savings scheme
- KVP Interest Rate %
- Compounding Frequency of KVP savings scheme
- Process of KVP In Online Or Passbook Mode
- Pre-Mature Closure process of KVP Savings scheme
- Account Transfer of KVP Savings Scheme
- FAQ about Kisan Vikas Patra
What is Kisan Vikas Patra (KVP) ?
Kisan vikas patra is a savings scheme certificate that you can purchase from a Bank or Post Office. In this scheme, the deposit amount gets doubled in 10 years and 4 months. So if you want to double your money without any risk then this is the best investment scheme for you. Please read till the end to know more about the Kisan vikas Patra saving scheme.
What are the features of the Kisan Vikas Patra?
- KVP savings scheme is backed by Government of India.
- KVP savings scheme is Safe investment option.
- KVP savings scheme gives you the Guaranteed returns
- KVP certificate can be pledged as a security to get loan from Banks
How Does Kisan Vikas Patra Work?
- You need to deposit a lump sum amount and purchase KVP certificate from bank or post office.
- Your deposited amount will get doubled in 10 years and 4 months.
- At the end of 10 years and 4 months, submit the certificate to the bank or post office from where you purchased the certificate and get the maturity amount (doubled amount).
Who Can Open The KVP Account?
- Only Indian residents can purchase KVP certificates.
- KVP certificate can be purchased by an adult for himself.
- An adult on behalf of a minor or a person of unsound mind of whom he is the guardian.
- Joint account by up to 3 adults.
- You can purchase any number of KVP certificates.
Where Do You Open The Kisan Vikas Patra Account?
You can buy KVP certificate from the following.
- Post Office.
- Nationalised Banks.
- Few commercialised Banks.
How Do You Open The Kisan Vikas Patra Account?
- KVP certificate can be purchased by cash or cheque.
- In case of cheque, the date of realisation of cheque in the account will be the date of account opening.
- You need not have a Savings Bank (SB) account to buy this certificate.
- But, you need to have a Savings Bank (SB) Account to receive the maturity amount.
What is the deposit limit for Kisan Vikas Patra savings scheme?
- Minimum Deposit amount is Rs. 1,000.
- No maximum limit on the deposit amount. That means you can invest as much as you can.
- Deposit amount should be in multiples of Rs. 100. For example, Rs. 1,100, Rs. 1,200, Rs. 1,300, Rs. 1,400 and so on.
Income Tax Benefits of Kisan Vikas Patra savings scheme
- No income tax benefits.
- Deposit amount is not eligible for tax deduction under Section 80C of Income Tax Act.
- Interest received upon maturity is taxable. You need to declare the interest income under “Income from Other Sources” during tax returns and pay the income tax as per your income tax slab.
- No TDS (Tax Deducted from Source) during maturity from Post Office or Bank in this Scheme.
Maturity Period of Kisan Vikas Patra Savings scheme
Currently, the maturity period is 10 years and 4 months. The maturity period is not fixed and it changes from time to time based on the announcement from the Government.
KVP Interest Rate %
Current annual interest rate is 6.90%. Interest rate (on the day of account opening) will remain the same throughout the tenure of KVP. It will not change even if there are changes to the interest rate thereafter. From 01-Apr-2016 onwards, the interest rate of this scheme has been announced on a quarterly basis. Note that this used to be on a yearly basis earlier.
Compounding Frequency of KVP savings scheme
This scheme follows yearly compounding frequency from 01-Apr-2016 onwards. Note that it used to be on half-yearly compounding frequency earlier.
Process of KVP In Online Or Passbook Mode
- Before 01-July-2016, when you invest in KVP, you used to get physical certificate.
- From 01-July-2016 onwards, the Government has decided to discontinue the physical certificates. Instead, you will be given the option to keep KVP in the following formats.
- e-mode (Online Mode).
- Passbook mode.
The details are given below.
- e-mode (Online): After purchasing KVP, you can view the details of your purchase through Online. For this facility, you have to have a Savings Bank (SB) Account and Internet Banking facility. Note that you can only view the certificates that you purchased. It means that you can’t purchase certificates through online Banking. You still need to go to Bank or Post Office for the purchase or investment.
- Passbook Mode: This is similar to the passbook of the Savings Bank (SB) account. After purchasing KVP, the entries will be made (either printed or manually) in the passbook.
Your Options: You can choose either Online or Passbook mode or both. The choice is yours. If you opt for Passbook initially and later on you want to switch to Online mode, it is possible. In that case, you have to surrender your Passbook.
Pre-Mature Closure process of KVP Savings scheme
- KVP certificate can be closed pre-maturely after two and a half years (2.5 years or 30 months) from the date of issue.
- Earlier, you had to surrender the physical certificate to close your KVP pre-maturely.
- For the KVP purchased after 01-July-2016, you have to surrender the KVP Passbook to close your KVP pre-maturely.
- The concerned Bank or Post Office will collect the Passbook and make an entry for delivering the final amount to you.
- If you had opted for Online mode for viewing KVP purchases, your online access will be removed.
Account Transfer of KVP Savings Scheme
- KVP certificate can be transferred from one person to another person. It can be done as many times as possible.
- KVP certificate can be transferred from Post Office to Bank and vice versa.
- Earlier, the physical certificate of the old owner used to be given to the new owner during the transfer process.
- But, to transfer the KVP purchased after 01-July-2016, the new owner will receive the mode that the old owner had opted for.
- For example, if the old owner had online access, then his access will be removed and new owner will get online access to the KVP.
- If the old owner had Passbook mode, then old owner should submit the Passbook. The concerned Bank or Post Office will strike out the entries belonged to the old owner and issue the same Passbook to the new owner in his name.
FAQ about Kisan Vikas Patra
What will happen in case Loss Of Kisan Vikas Patra Certificate?
If you lose or lost the certificates that you purchased before 01-July-2016, then you can apply for the duplicate certificate. But, instead of a certificate, you will get Passbook and it will have the certificate number of the old lost certificate. If you lose the KVP Passbook that you purchased after 01-July-2016, then you can apply for and get duplicate Passbook by paying required fees.
Is there any Loan Facility available from Kisan Vikas Patra Saving Scheme?
You can use KVP certificate as a collateral security to get Loan from the Banks. Earlier, you had to submit or pledge the certificate in the Bank to get the Loan. But, for the KVP purchased after 01-July-2016, you can submit in Passbook mode only. The online mode will not help in this case.
Is there any Nomination Facility available in Kisan Vikas Patra Saving Scheme?
Yes Nomination facility is available. You can nominate either at the time of buying the certificate or after buying the certificate (but before maturity).
Can NRIs invest in the KVP scheme?
No, KVP scheme is open only for resident individuals.
Where can one encash a Kisan Vikas Patra (KVP)?
A kisan Vikas Patra can be encashed by the certificate holder at the bank or post office where the certificate was issued.
How will the maturity amount be paid?
On maturity of the scheme, the payable amount shall be credit directly to the bank/post office savings account of the certificate holder. Therefore, it is important that the certificate holder have a savings account when they are looking to encash their certificate.
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