Post Office Kisan Vikas Patra (KVP)

Kisan Vikas Patra launched in 1988, is a scheme through which you can double your investment over the specified tenure of the account. KVP scheme is one of the saving options that help individuals accumulate corpus over time without any risk as it is backed by the government. As its name suggests, initially KVP was launched for farmers but now anybody can invest in KVP who fulfils its eligibility criteria.

Main objective of KVP is to encourage people to make their investments for long-term.

Kisan Vikas Patra bears the KVP serial number, the amount, the maturity date and the amount to be received at the time of maturity.

Post Office Kisan Vikas Patra Denomination & Deposit Limits

Minimum of Rs.1000 and then any sum in multiple of Rs.100 can be deposited in an account.
No maximum limit is there for purchase of the certificate.
KVP is available in the following denominations for investment,
1. Rs.1,000
2. Rs.5,000
3. Rs.10,000
4. Rs.50,000

It is important to note that denominations of Rs.50,000 are available only at the head post office of the city.

Types Of Post Office Kisan Vikas Patra Scheme Accounts

Single holder type: Single holding in the name of an adult, an adult on behalf of a minor or an adult on behalf of a person of unsound mind.

Joint A type: KVP is issued in the name of two adults. On maturity, both account holders will receive the maturity payout. However, in the event of the death of one account holder, surviving account holder will receive the maturity payout.

Joint B type: KVP is issued in the name of two adults. Unlike Joint A type accounts, either of the two account holders will receive the maturity payout. However, in the event of the death of one account holder, surviving account holder will receive the maturity payout.

Post Office Kisan Vikas Patra Features & Benefits of KVP

Kisan Vikas Patra scheme was introduced in 1988 as a small saving certificate scheme
Offers assured returns to the individuals
KVP can be purchased from any branch of India Post Offices and selected public sector banks
There are 3 types Of Kisan Vikas Patra Accounts viz. Single holder, Joint A and Joint B
Interest on the invested amount is compounded annually
Loan against KVP certificate is available
One can double his investment over the specified tenure
No TDS is made from the withdrawn proceeds

Post Office Kisan Vikas Patra Eligibility

Kisan Vikas Patra can be purchased by the persons as outlined below,

Applicant must be an Indian citizen
An adult can apply in his own name
An adult can apply on behalf of a minor
A guardian can apply on behalf of a person of unsound mind
Jointly (maximum three adults)

KVP scheme is available to the resident individuals only. NRIs and HUFs cannot invest in Kisan Vikas Patra (KVP).

Post Office Kisan Vikas Patra Maturity Amount

Invested amount doubles on maturity which means that Rs.1 lakh deposited by you will become Rs.2 lakhs on maturity. You will find the maturity value pre-printed on the KVP certificate. Presently, KVP will be doubled in a period of 115 months i.e. 9 years and 5 months. KVP certificate holder can encash KVP at the bank or post office where he is holding his KVP account.

Post Office Kisan Vikas Patra Interest Rate

Currently, the interest rate is 7.50% for KVP investments for the Q4 FY 2023-24, i.e. quarter starting from 1 January 2024 to 31 March 2024.

KVP interest rate is reviewed every quarter by the Government of India. The interest is compounded yearly but paid at the time of maturity. The interest rate in a given quarter of investment made will be locked-in for the entire tenure of the scheme in case of KVP.

Post Office Kisan Vikas Patra Maturity Period

KVP maturity period changes on the basis of the interest rate changes made by the Ministry of Finance. Currently, the maturity period for Kisan Vikas Patra is 115 months and after the maturity the corpus can be withdrawn.

If you do not withdraw the amount on maturity, it will continue to accrue interest until you withdraw the amount.

Documents Required For Post Office Kisan Vikas Patra 2024

Eligible individuals can purchased KVP by submitting following required documents.

Application form for KVP i.e. Form A to be submitted
Application form Form A1 to be submitted, when the application is extended through an agent
KYC documents like Aadhaar Card, PAN card, Passport, Voter's ID, Driving License, etc.

TD account can be renewed after maturity by submitting prescribed application form at concerned post office along with the passbook.

Post Office Kisan Vikas Patra Tax Benefits

No income tax benefit is available under the scheme as investment in KVP does not qualify for the 80C deductions. Even the KVP returns are completely taxable. However, the investment in KVP is exempt from Tax Deduction at Source (TDS) at the time of withdrawal which means that no TDS will be made from the KVP proceeds.

Post Office Kisan Vikas Patra Premature Withdrawal

KVP deposits can be encashed prematurely but only after 2 years & 6 months (30 months) from the date of issue of the KVP.

Encashing the KVP scheme early is not allowed before 30 months from investment. However, the early encashment is only allowed in the account holder's demise, on forfeiture by a pledgee, being a Gazetted Officer, or by court order.

Post Office Kisan Vikas Patra Other Features

Loan against KVP certificate: You can avail secured loans by using your KVP certificate as collateral/security. Also, such loan will carry comparatively lesser interest rate.

Nomination: Nomination facility is available in KVP. You can declare nominee for your investment by filling up a nomination form at the post office. A minor can also be nominated. Single/joint holders can make a nomination by filling up Form C at the time of purchase. If the nomination is not made at the time of purchase, it can be made any time after the purchase of the certificate but before maturity. Remember that nomination cannot be made, if the KVP certificate is applied on behalf of a minor.

How to Transfer KVP from One Post Office to Another?

It is possible to transfer KVP certificate from one post office (from where it was originally purchased) to another post office. At the time of requesting for such transfer, the transferee should hold the eligibility to purchase the Kisan Vikas Patra certificate.

For transferring a Kisan Vikas Patra certificate from one post office to another post office, the account holder needs to submit a written application to the concerned officer at the post office from where KVP was originally purchased by him.

When KVP can be Transferred from One Person to Another Person?

KVP can be transferred from one person to another person in case of following circumstances.

Transfer from one owner to the joint owners
Transfer from joint owners to one of the owners
Transfer from the the deceased owner to his heir
Transfer from the owner to a judge of law and also to other individuals as ordered by a Law Court

For transferring the KVP certificate from one person to another, a written application needs to be submitted to the concerned Post Office/bank where the account holder/s is/are maintaining his/their account.

How to encash Kisan Vikas Patra (KVP)?

Encashment procedure for Kisan Vikas Patra Certificate is very simple. You need to submit following documents at the time of KVP maturity to the post office/ bank from where you have purchased Kisan Vikas Patra (KVP) certificate.

Application for KVP Encashment in Form-2
Original KVP certificate
Identity slip given at the time of issue of the KVP certificate
Proof of Identity (e.g. Valid Indian Passport, Indian Driving License etc.) of the holder.

The KVP holder is required to sign at the back side of the KVP Certificate as a receipt for amount received on encashment.

If KVP Certificate was purchased on behalf of a minor who has attained majority at the time of maturity, then the KVP Certificate is to be signed by the minor attained majority himself but his signature should be attested either by the person who is known to the Post Master.