Double your money by investing in this government-backed small saving scheme
The Kisan Vikas Patra certificates can be encashed after two and half years or 30 months from the date of issue. The facility of nomination is available. Also, the certificate can be transferred from one person
New Delhi: With Bank FD interest rates falling, conservative investors are looking for other alternatives that offer better interest and guaranteed return. Small savings schemes backed by the government are some of the most popular investment options in India aside from bank FDs. India Post offers nine such small savings schemes such as Public provident fund (PPF), National Savings Certificates (NSC), Recurring Deposit (RD), Kisan Vikas Patra (KVP), Sukanya Samriddhi Scheme, etc.
Kisan Vikas Patra (KVP) Scheme has a maturity period of 124 months. Kisan Vikas Patra claims to double your invested money in 124 months (10 years & 4 months). Earlier, the invested amount doubled in 113 months (9 years and 5 months). Note that after investing in this Post Office scheme, the investor gets a guarantee from the government that their money is secured and that their investment will offer guaranteed returns.
Kisan Vikas Patra interest rate 2020:
The annual interest rate on the Post Office Kisan Vikas Patra account is 6.9 per cent. Since it is a central government-backed scheme, after investing in this Post Office scheme, the investor gets a guarantee from the government that their investment is secured with a guaranteed return meaning the interest is fixed throughout the investment period at the annual interest rate available at the time of account opening.
For example, if someone had opened the Post Office Kisan Vikas Patra account in January to March 2020 quarter this year, they will continue to get an annual interest rate of 7.6 per cent till. The new rate of 6.9% will be applicable to the new accounts getting opened in the April to June 2020 quarter.
Any Indian citizen who is over 18 years of age can invest in this scheme and buy a certificate. There is no upper age limit for the scheme, which means senior citizens, too, can invest in the scheme. The scheme also allows minors to invest and purchase a KVP certificate. However, the account has to be held by an adult. Minors can only invest in the case consenting adult purchases the certificate on behalf of them.
Only those Indians residing in India are eligible to purchase a KVP certificate. Non-resident Indians are not allowed to invest in a KVP scheme. Apart from NRIs, Hindu-Unified Families can’t purchase a KVP certificate. The scheme allows trusts to purchase a KVP but companies cannot purchase a KVP certificate.
Money doubled by maturity:
New maturity period of the KVP account is 124 months means 10 years and four months. If a person invests Rs 1 Lakh in one's Post Office KVP account today, this Rs 1 lakh will become around Rs 2 lakh at the time of maturity. Investors should know that there is no limit on the maximum amount to be invested in the Post Office KVP account. The minimum amount to be invested is Rs 1,000 and the amount has to be in the multiple of Rs 100 only. KVP will be issued in the shape of Passbook.
The maturity value calculated based on the current rate of interest is pre-printed on your KVP certificate at the time of purchase. This means that even if the rate of interest has changed at the time of maturity, your returns will not be affected by the change. You will get what you were promised, even if interest rates have dropped. This is why the KVP is considered one of the safest investment options.
KVP Certificates can be purchased by:
- (i) a single adult
- (ii) Joint A Account (Maximum 3 adults)
- (ii) Joint B Account (Maximum 3 adults)
- (iv) Minor above 10 years of age
- (i) An adult on behalf of a minor.
- (ii) A guardian on behalf of a person of unsound mind
The Kisan Vikas Patra certificates can be encashed after two and half years or 30 months from the date of issue. The facility of nomination is available. Also, the certificate can be transferred from one person to another and from one post office to another.
KVP Premature Withdrawal:
Unlike many other long-term saving schemes, the KVP allows investors to make premature withdrawals. However, if you withdraw within one year of purchasing the certificate, not only will you lose the interest, you’ll also have to pay a penalty. If you withdraw between one year and two and a half years since purchasing the certificate, there will be no penalty, but your interest will be reduced. Withdrawal any time after two and half years is allowed and doesn’t attract any penalty or reduction in interest.