Kisan Vikas Patras: Introduction, Benefits, Interest Rates, Various Types

Kisan Vikas Patras: Introduction, Benefits, Interest Rates, Various Types. Kisan Vikas Patra is a saving scheme that was announced by the Government of India. Under this scheme it doubles the money invested in eight years and seven months.

The Directorate of Small Savings Government of India, issues these saving bonds. They are issued by all Post Offices in the country so that the scheme can be accessed by citizens from all over the country.

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Kisan Vikas Patras – a Discussion

Kisan Vikas Patras

Kisan Vikas Patra :

In order to boost up the savings rate in the country Government of India has announced many plans… But most of them are not accessible to below middle class groups and non salaried and irregular income earning groups …..

Kisan vikas patra is a best savings scheme to encourage those who doesn’t have access to regular financial plans that requires regular contribution to for a particular period till it gets closed or matured.

Must Read – Advantages of Kisan Vikas Patra

Benefits of Kisan Vikas Patra (KVP)

  • Amount Invested doubles in 118 months (9 years & 10 months)
  • 7.7 % compounded annually
  • Available in denominations of Rs 1,000, 5000, 10,000 and Rs 50,000. Minimum deposit Rs 1000/- and no maximum limit.
  • Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007
  • Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
  • KVP can be purchased from any Departmental Post office.
  • Facility of nomination is available.
  • Certificate can be transferred from one person to another and from one post office to another.
  • Certificate can be en cash after 2 & 1/2 years from the date of issue.

Interest Rates of Kisan Vikas Patra (KVP)

From 1.10​.2018, interest rates are as follows:- ​

  • 7.7​​​​% compounded annually ​
  • Amount Invested doubles in 112​ months (9 years & 4​ months)

Minimum and Maximum Deposit

Type of AccountMinimum DepositMaximum Deposit
Kisan Vikas Patra (Available in denominations of Rs 1,000, 5000, 10,000 and Rs 50,000.)INR. 1000/-No limit

Is it only for farmers ?

It is a misconception that Kisan vikas patra is for farmers only. The “kisan” in Kisan Vikas Patra does not mean that only farmers can buy these saving certificates but also the amount procured by the government through these Patras is used for uplifting the farmers. Any individual can safely invest and save their money in the form of Kisan Vikas Patra.The are accessible to every individual without any bias.

Must Read – Basic details

Various types of Kisan Vikas Patra :

  1. Single holder type certificate
  2. Joint A type certificate
  3. Joint B type certificate.

Implied rate of return :

Under the new Kisan Vikas Patra scheme, the amount invested by buying KVPs will be doubled in 100 months, or eight years and four months. This indicates that an annual return of 8.67 per cent is earned through ,without any risk. It is available in the denomination of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000.

In my subsequent post I will cover the procedure to apply , benefits and limitations of KVP….

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