Kisan Vikas Patra (KVP) Small Savings Scheme: Top things to know before you invest

There are around nine government-sponsored small savings schemes and Kisan Vikas Patra is one of them. People seeking to grow wealth invest in KVP certificates in a post office to get an interest on a compound basis. Also according to India Post's website - www.indiapost.gov.in the amount invested in a KVP account in a post office doubles in a period of 112 months. There is around 1.5 lakh post offices under India Post network, across India. It was restructured in 2015-16 and according to new regulations, PAN card is mandatory for making an investment into the Kisan Vikas Patra scheme worth Rs 50,000 paid in cash. 

The rate of interest given on Kisan Vikas Patra (KVP) depends on the announcements made by the Finance Ministry. The current interest rate applicable to KVP is 7.7% per annum which will double your investment in 9 years and 4 months or so. Kisan Vikas Patra is completely taxable or not covered in 80C of Income Tax Act.

Here are five key details about investment in India Post's Kisan Vikas Patra savings scheme:

1. Kisan Vikas Patra eligibility:

A Kisan Vikas Patra account can be opened by any individual above 18 years of age, for self or on behalf of a minor or by two adults (jointly). The KVP can be bought from at any departmental post office. The KVP certificates can be transferred from one person to another, and from one post office to another.

2. Kisan Vikas Patra investment limit:

As per the India post website, a minimum of Rs. 1,000 can be invested in a KVP account in the multiples of Rs 1,000. However, there is no upper limit applicable.

3. Kisan Vikas Patra interest rate:

The investors can get an interest rate of 7.7 per cent on Kisan Vikas Patra accounts and the interest is compounded annually. Also, the sum invested gets doubled in 112 months.

4. Kisan Vikas Patra income tax benefit:

One more benefit is that the investments made under the Kisan Vikas Patra save your tax as it qualifies for income tax benefit under Section 80C of the Income Tax Act.

5. Kisan Vikas Patra maturity period:

According to the India post, the KVP certificates can be encashed after 30 months from the date of issue.