Kisan Vikas Patra Scheme: Interest Rate, Features & Benefits
Kisan Vikas Patra (KVP) is one of the popular saving scheme from Indian post office for long term investment.
Kisan Vikas Patra is a small savings instrument that will facilitate people to invest in a long term savings plan. It is a popular investment instrument given that is of low-risk and also guarantees assured returns.
Kisan Vikas Patra Information
Any Indian citizen above the age of 18 years can buy a Kisan Vikas Patra from the nearest post office. People from rural India (with no bank account) find this particularly appealing. You can also buy one for a minor or jointly with another adult. Don’t forget to mention the date of birth of the minor and the name of the parent/guardian. A Trust can also buy one, but not an HUF or an NRI.
KVP is a good choice for risk averse individuals, who have surplus money, which they may not require in the near future. It all depends on your risk profile and goals.
Deposit in Kisan Vikas Patra (KVP)
- Minimum Rs. 1000 and in multiple of Rs. 100, no maximum limit.
- Any number of accounts can be opened under the scheme.
Kisan Vikas Patra Eligibility
Who can open Kisan Vikas Patra
- a single adult
- Joint Account (up to 3 adults)
- a guardian on behalf of minor or on behalf of person of unsound mind
- a minor above 10 years in his own name.
Document Required to purchase Kisan Vikas Patra (KVP)
- Aadhar card
- KVP Application Form
- Pan Card
- Address proof
- age certificate
- passport size photo
- Mobile number and some personal information.
Eligibility Criteria for Kisan Vikas Patra (KVP)
The following are the Kisan Vikas Patra eligibility:
- The applicant must be an adult and a resident Indian.
- The applicant can apply for Kisan Vikas Patra in their own name or on behalf of a minor.
- Trusts are eligible to invest in Kisan Vikas Patra. HUFs (Hindu Undivided Family) and NRIs are not eligible to invest in KVP.
Types of KVP
The Kisan Vikas Patra is of the following types:-
- Single Holder Type Certificate: Issued to an Adult for himself or on behalf of a minor or to a minor.
- Joint A type Certificate: Issued jointly to 3 adults payable to both the holders jointly or to the survivor.
- Joint B type Certificate: Issued jointly to 3 adults payable to either of the holders jointly or to the Survivor.
KVP, when of Type A and Type B, is released to both the combined owners. In case the adulthood is due to both the heir and owners or due to either of the heirs, it is released to combined owners.
- Investment in this instrument is only allowed to Resident Indians and therefore NRI’s cannot invest in this instrument. HUF is also not allowed to invest in this instrument.
- A person interested in purchasing this instrument is required to submit an application in Form A or Form A1 either in person or through an agent of the small savings scheme.
- Form A (No Background Colour Form) is to be used in case of direct investment and Form A1 (Coloured background Form) is to be used in case the investment is made through an Agent.
- If the payment is made through Cash – the Instrument is issued immediately. However, if the payment is made through Cheque/ Pay Order/ Demand Draft – the Instrument is issued on the date on which the payment gets cleared.
<WRAP center round tip 90%>
At the time of issue of the Certificate, the buyer should also request for Identity Slip which would be required in case of loss of the certificate and also required for easy processing of the payment at the time of maturity.
</WRAP>
Kisan Vikas Patra Interest Rate and Maturity Period
The maturity period of the Kisan Vikas Patra is 124 months i.e. 10 years and 4 months and on maturity – the amount invested gets doubled. So if you invest Rs. 1,000 in this instrument – on maturity i.e. after 10 years and 4 months – the amount invested by you will get doubled to Rs. 2,000. And therefore the effective Interest Rate on Kisan Vikas Patra is 6.9%. (Effective from 1st Apr 2020)
Kisan Vikas Patra Benefits
**Guaranteed returns **: Regardless of the market fluctuations, you will get the sum guaranteed. As this scheme was originally intended for the farming community, the priority was to encourage them to save for rainy days.
**Capital protection **: It is a safe mode of investment and not subject to market risks. You will receive the investment and gains when the tenure ends.
KVP Nomination
Collect a nomination form from the post office, and fill up the required information of the nominee. If you are nominating a minor, mention the date of birth.
Procedure for Redemption of the Kisan Vikas Patra
Amount of maturity may be repaid to the account holder on an application in Form-2 submitted to the accounts office.
Payment of Kisan Vikas Patra (KVP) on the death of account holder
- In the event of death of the depositor of a single account or of all the depositors in a joint account, the deposit shall be payable to the nominee if a nomination exists or to the legal heir(s).
- Where there are not more than three surviving nominees or legal heirs, they may, at their option continue the account and receive the amount of deposit alongwith interest on maturity in the manner provided for in this scheme, as if they had opened the account themselves.
- On the death of one or two of the account holders in a joint account, the surviving account holder or holders, if any, shall be treated as the owner or owners of the account and such account holder or holders may continue the account or close the account.
Kisan Vikas Patra (KVP) Premature Withdrawal
Kisan Vikas Patra (KVP) account may be prematurely closed by the account holder by making an application in Form-3 to the accounts office, at any time before maturity under the following circumstances, namely:-
- on the death of the account holder in a single account, or any or all the account holders in a joint account;
- on forfeiture by a pledgee, being a Gazetted Officer;
- when ordered by a court.
In the above circumstances, principal amount along with simple interest calculated at the rate applicable from time to time to Post Office Savings Account for the complete months for which the account has been held, shall be payable.
However, if the account holder is alive and wants premature withdrawal of Kisan Vikas Patra (KVP), one must understand that there is a lock-in period of two years and six months from the date of opening of the account. After that, the amount, inclusive of interest shall be payable as specified in the table below:-
TABLE-1
(Table showing premature closure value of account opened between 12th December, 2019 to 31st March, 2020 (both days inclusive) with 1,000 rupees)
| Period from the date of the certificate to the date of its encashment | Amount payable inclusive of interest (Rupees) |
|---|---|
| Two and half years but less than three years | 1173 |
| Three years but less than three and half years | 1211 |
| Three and half years but less than four years | 1251 |
| Four years but less than four and half years | 1291 |
| Four and half years but less than five years | 1333 |
| Five years but less than five and half years | 1377 |
| Five and half years but less than six years | 1421 |
| Six years but less than six and half years | 1467 |
| Six and half years but less than seven years | 1515 |
| Seven years but less than seven and half years | 1564 |
| Seven and half years but less than eight years | 1615 |
| Eight years but less than eight and half years | 1667 |
| Eight and half years but less than nine years | 1722 |
| Nine years but before Maturity of Certificate | 1778 |
| On maturity of certificate | 2000 |
TABLE-2
(Table showing premature closure value of account opened on or after the first day of April, 2020 with 1,000 rupees)
| Period from the date of the account to the date of its pre-mature closure | Amount payable inclusive of interest (Rupees) |
|---|---|
| Two and half years but less than three years | 1154 |
| Three years but less than three and half years | 1188 |
| Three and half years but less than four years | 1222 |
| Four years but less than four and half years | 1258 |
| Four and half years but less than five years | 1294 |
| Five years but less than five and half years | 1332 |
| Five and half years but less than six years | 1371 |
| Six years but less than six and half years | 1411 |
| Six and half years but less than seven years | 1452 |
| Seven years but less than seven and half years | 1494 |
| Seven and half years but less than eight years | 1537 |
| Eight years but less than eight and half years | 1582 |
| Eight and half years but less than nine years | 1628 |
| Nine years but less than nine and half years | 1675 |
| Nine and half years but less than ten years | 1724 |
| Ten years but before Maturity of Certificate | 1774 |
| On maturity of certificate | 2000 |
Tax on Kisan Vikas Patra
- The amount invested in KVP does not offer any tax deductions under **Section 80C. **
- The Interest on Kisan Vikas Patra is not exempted from the levy of Income Tax and Tax would be levied as per the Slab Rates. TDS @ 10% would also be deducted from Interest.
Kisan Vikas Patra Online
- You can not purchase Kisan Vikas Patra online, but you'll be issued e-KVP instead of any paper certificates.
- For that you need to have savings account in post office with internet banking facility.
- If you don't want / have internet banking facility, you can opt for passbook mode, where entries of Kisan Vikas Patra payment / information will be printed.
How to Transfer Kisan Vikas Patra Account?
KVP can be transferred from one person to another and from one post office to another.
KVP can be transferred in two ways –
- Transfer of KVP from one Post Office to another
- Transfer of KVP from one person to another
Transfer of KVP from One Post Office to another Post Office
A Kisan Vikas Patra certificate can be transferred from one post office, from where it was originally bought to another post office. In order to transfer a KVP certificate, the investor must submit a handwritten consent to the officer at a concerned post office. The transferee must be a resident Indian and must be eligible to purchase the KVP certificates.
Transfer of KVP from One Person to another Person
A KVP certificate can be transferred from one person to another person in the following instances –
- A KVP certificate can be transferred or exchanged if approval is sought from the Head Postmaster and the Sub Postmaster, where both belong to the Post Office where the certificate was initially released.
- A KVP certificate can be transferred from the company to its worker on behalf of whom the certificate was initially bought.
- A KVP certificate can be transferred from The Cooperative Financial Institution or Community, The Planned Financial Institution or The Reserve Financial Institution of India to its customer or participant.
- A KVP certificate can be transferred from a Gazetted Government Officer and/or from the regional power to any system/finance/individual and on behalf of whom this certificate was organized and when this certificate was not released in the name of whom it was organized (system/finance/individual).
- A KVP certificate can be transferred from the deceased owner’s name to their heir.
- A KVP certificate can be transferred from the judge of law and/or to another individual under the orders of the law court.
- A KVP certificate can be transferred from one owner to a set of combined owners.
- A KVP certificate can be transferred from combined owners to the name of one of the combined owners or the remaining owner.
Pledging of Kisan Vikas Patra (KVP)
- KVP may be pledged or transferred as security, by submitting prescribed application form at concerned Post Office supported with acceptance letter from the pledgee.
- Transfer/pledging can be made to the following authorities.
* The President of India/Governor of the State.
* RBI/Scheduled Bank/Co-operative Society/Co-operative Bank.
* Corporation (public/private)/Govt. Company/Local Authority.
* Housing finance company.
Loan Against Kisan Vikas Patra (KVP)
A holder of Kisan Vikas Patra can avail a loan against the same. The following are the conditions for availing a loan against KVP:
- The loan applicant must have a Kisan Vikas Patra under his own name.
- The loan against KVP can be availed for business or personal purposes only. The loan cannot be availed for any speculative ones.
- Different banks have different charges and interest rates for loans against KVP. The charges vary from time to time and select banks may charge processing fee for loan grant.
- The loan should be repaid within the tenure of KVP.
- The margin and loan amount will be decided by the bank based on the KVP investment and maturity.
How to Get KVP Duplicate Certificate
If the Kisan Vikas Patra (KVP) is lost, stolen, destroyed, mutilated or defaced, the rightful owner of such KVP may apply for the issue of a duplicate KVP to the Post Master of post office, where the certificate is registered or issued.
Documents You Need to Get Duplicate Kisan Vikas Patra Certificate
- Filled Form-NC29 for the Issue of Duplicate KVP
- Statement or Photocopy showing the details of KVP – such as number, amount and the date of KVP and the circumstance attending such loss, theft, destruction, mutilation or defacement.
- Bond of Indemnity – In case of mutilated or defaced certificates, no indemnity bond is required. But for lost, stolen, destroyed, you also need to submit bond of indemnity. You also need to furnish an indemnity bond in the prescribed form with two sureties or with a bank guarantee is required.
- A- Bond of Idemnity ([[https://docs.investmentkit.com/pdf-download/idemnity-bond-form-nc-54a-for-duplicate-kisan-vikas-patra|Form NC-54(a)]])
- This form is used for issuance of a duplicate KVP in lieu of lost, misplaced, spoiled or mutilated certificates.
- B- Bond of Idemnity ([[https://docs.investmentkit.com/pdf-download/idemnity-bond-form-nc-54b-for-duplicate-kisan-vikas-patra|Form NC-54(b)]])
- This bond of indemnity is to be executed for the issue of a duplicate KVP in lieu of lost, misplaced, spoiled or mutilated certificates with a Bank guarantee.
- C- Bond of Indemnity ([[https://docs.investmentkit.com/pdf-download/idemnity-bond-form-nc-61-for-duplicate-kisan-vikas-patra|Form NC-61]])
- This bond of indemnity is to be executed at the time of discharge of original certificates or Issue of duplicate certificate(s) in lieu of lost, misplaced, spoilt, destroyed, defaced or mutilated certificate (s), where original application for purchase is missing.
- Identity slip (if any)
- Copy of FIR – If the Certificate is lost, stolen, destroyed.
- ID Proof – Driving Licence / Voter ID Card / Passport / Ration Card
- Residence Proof – Driving Licence / Voter ID Card / Passport / Ration Card / Telephone Bill
- Recent Passport Size Photograph
- Identification Document of Surety – e.g. Valid Indian Passport, Indian Driving License, Salary Certificate of the Surety.
- Payment Receipt of Fees for Issue of Duplicate Certificates
If the Post Master of post office of registration is satisfied of the loss, theft, destruction, mutilation or defacement of the certificate, he shall issue a duplicate certificate on the application.
FAQs on KVP
In what ways can the Kisan Vikas Patra be transferred?
The Kisan Vikas Patra or KVP can be transferred from either one Post Office to another or from one person to another.
If the owner of the KVP certificate is deceased, who will the certificate get transferred to?
If the owner of the KVP certificate is deceased, the certificate can be transferred from the deceased owner’s name to their heir.
If the KVP certificate was initially owned by one person, can it transferred to more than one individual?
Yes. A KVP certificate transferred from one owner to a combination of combined owners. The certificate can also be transferred from a set of combined owners to the name of one of the combined owners or the remaining owner.
If my company purchased the KVP certificate on my behalf, can I get it transferred to my name?
Yes. A KVP certificate bought by a company can be transferred to its worker on behalf of whom the certificate was initially bought.
When I want to transfer my KVP certificate, whose approval will I need to get?
You can transfer your KVP certificate if you have sought the approval of the Head Postmaster and the Sub Postmaster, both of whom belong to the Post Office where the certificate was initially released.
I have lost my KVPs. What is the process to obtain a duplicate certificate?
To obtain a duplicate KVP certificate, you need to write to the Post Office of KVP issue requesting a duplicate certificate and attach the identity slip that was given at the time of issue. The identity slip will prove your ownership of KVPs. If you have lost or misplaced the identity slip, please contact the Post Office of issue for further instructions.
Can I invest Teachers’ Provident Fund in Kisan Vikas Patra scheme?
No, Teachers’ Provident Fund are not eligible to be invested in KVPs.
I have shifted to a different city. Can I encash my KVPs at the Post Offices here other than the Post Office of issue?
Kisan Vikas Patra can be encashed at any Post Office if your identity slip is accepted and if it is confirmed by the Post Office that you are the rightful owner. Ideally, it would be a lot easier for you if you could encash your KVP at the Post Office of issue.
Are Co-operative Societies and Co-operative Banks allowed to invest in Kisan Vikas Patra (KVP)?
No, Co-operative Societies and Co-operative Banks are not allowed to invest in Kisan Vikas Patra (KVP).
Can NRIs and HUFs invest in the KVP scheme?
No, KVP scheme is open only for resident individuals. NRIs and HUFs are not eligible to invest in Kisan Vikas Patra.
Are there any restrictions in terms of the amount that can be invested in Kisan Vikas Patra?
No, there are no restrictions in terms of the investment amount. There is, however, a minimum limit, which is Rs.1,000. Which means that one must invest a minimum of Rs.1,000 in the scheme. Thereafter, one can invest in denominations of Rs.1,000, Rs.5,000, Rs.10,000, and Rs.50,000. Also, there is no limit put on the number of certificates that an individual can hold.
What is the maturity period of Kisan Vikas Patra (KVP)?
The maturity period depends on the interest rate at which KVP is issued. It changes from time to time from Govt. of India. Please refer to the official website of Indian Post Office for latest information.
What will be the tax benefits for investing in Kisan Vikas Patra?
The returns received from the Kisan Vikas Patra are not eligible for any tax deductions under Section 80C of the Income Tax Act. However, withdrawals made after the maturity of the scheme are exempt from Tax Deducted at Source (TDS).
How long does it take for the Kisan Vikas Patra to be issued?
If an applicant has purchased a Kisan Vikas Patra by making payment for it in cash, they will be issued the certificate immediately. But, if the purchase has been made by cheque, pay order, or Demand Draft, then the date of issue of the certificate will be the date on which payment made using any of these instruments has been realised. However, if, despite making the payment, you have not been issued your KVP certificate, you will be provided with a provisional receipt for the same. When the actual certificate is issued at a later date, the applicant must exchange the provisional receipt with the KVP certificate. In such cases, the date of issue of the KVP shall be the date on which the provisional receipt had been issued.
Can Kisan Vikas Patra be transferred from one person to another?
Yes, a Kisan Vikas Patra can be easily transferred from one person to another. This can be done by providing a written letter of consent to the Post Master. In order to transfer, the original certificate holder should submit the original KVP certificate. The new certificate that is issued will bear the name of the transferee i.e. the person in whose name the certificate has been transferred. Transfer of certificate from one person to another will not be permitted if the Certificate is held either on behalf of a minor (till they are alive) or by a minor themselves.
What happens if the certificate is not encashed after the scheme reaches maturity?
In case the certificate is not encashed after the scheme reaches maturity, then the scheme holder will be entitled to the post office savings interest, at the rate applicable on the entire payable maturity amount, at the given time. If the certificate is encashed within a month after maturity of the scheme, no interest shall be paid.
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.
Historic Interest Rates of Kisan Vikas Patra (KVP)
| Quarter/Financial Year | 2016-2017 | 2017-2018 | 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 |
| April-June | 7.8% (will mature in 110 months) | 7.6% (will mature in 113 months) | 7.3% (will mature in 118 months) | 7.7% (will mature in 112 months) | 6.9% (will mature in 124 months) | 6.9% (will mature in 124 months) |
| July-September | 7.8% (will mature in 110 months) | 7.5% (will mature in 115 months) | 7.3% (will mature in 118 months) | 7.6% (will mature in 113 months) | 6.9% (will mature in 124 months) | 6.9% (will mature in 124 months) |
| October-December | 7.7% (will mature in 112 months) | 7.5% (will mature in 115 months) | 7.7% (will mature in 112 months) | 7.6% (will mature in 113 months) | 6.9% (will mature in 124 months) | Yet to announce |
| January-March | 7.7% (will mature in 112 months) | 7.3% (will mature in 118 months) | 7.7% (will mature in 112 months) | 7.6% (will mature in 113 months) | 6.9% (will mature in 124 months) | Yet to announce |
Kisan Vikas Patra Forms
Kisan Vikas Patra (KVP) Purchase Form A Download
Form NC-29 to get duplicate Kisan Vikas Patra Certificate
Idemnity Bond Form NC-54a for Duplicate Kisan Vikas Patra
Idemnity Bond Form NC-54b for Duplicate Kisan Vikas Patra
Idemnity Bond Form NC-61 for Duplicate Kisan Vikas Patra
Summary of Kisan Vikas Patra (KVP)
- Rate of Interest: 6.9% w.e.f 01.01.2022 –to- 31.03.2022 (GOI revises the eKVP rate of interest on every quarter).
- Tenure: 124 months w.e.f. 01.01.2022 –to- 31.03.2022 .
- Minimum of Rs. 1,000 and in multiples of Rs. 100 with no maximum limit.
- Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
- All branches are authorized to issue e-KVP.
- Nomination facility available.
- Lock in period of 2 years 6 months. Premature closure before 2 years 6 months is allowed only:
* On the death of the holder or any of the holders in the case of joint holder.
* On forfeiture by a pledge being a gazetted government officer.
* When ordered by a court of law.
Useful External Links
Kisan Vikas Patra (KVP) on Wikipedia
Kisan Vikas Patra (KVP) Official Rules 2019