KVP Scheme – Eligibility Criteria | Benefits and Other Details!

In 1988, India Post launched the Kisan Vikas Patra, a small savings certificate initiative. Its major goal is to instill long-term financial discipline in people. According to the most recent report, the scheme’s duration is presently 115 months (9 years and 5 months).

The minimum investment is Rs.1,000, and there is no maximum. And if you invest a lump sum now, you will receive double as much at the end of the 115th month. Originally, it was intended for farmers to help them save for the long term, hence the name. It is now open to everyone. To deter money laundering, the government made PAN card evidence mandatory for investments over Rs.50,000 in 2014. To deposit Rs.10 lakh or more, you must provide evidence of income (pay slips, bank records, ITR paperwork, etc.).

It is a low-risk savings platform where you may park your money safely for a certain length of time. Furthermore, the account holder’s Aadhaar number must be submitted as confirmation of identification.

Criteria for Eligibility for the Kisan Vikas Patra Program?

To be eligible for the program’s benefits, individuals must satisfy the Kisan Vikas Patra 2023 eligibility requirements listed below:

  • Applicants must be Indian residents.
  • Applicants must be at least 18 years old.
  • Adults can submit applications for minors.

Who Should Participate in the KVP Program?

A Kisan Vikas Patra can be purchased at the closest post office by any Indian citizen who is at least 18 years old. People from rural India who don’t have bank accounts are especially drawn to this. A KVP can also be purchased jointly with another adult or for a juvenile. Don’t forget to provide the minor’s birthdate and the parent or guardian’s name. An HUF or an NRI cannot purchase one; however, a Trust may.

For risk-averse people with the extra cash they might not need in the near future, KVP is a viable option. Your risk tolerance and objectives will all be factors.

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As an illustration, preferable alternatives for those looking for tax-saving plans include Public Provident Fund, National Savings Certificates, and tax-saving bank FD plans. The Equity Linked Savings Scheme (ELSS) is available to you if you are willing to accept a certain amount of risk. Play to your financial advantages as a result.

Aspects and Advantages of Kisan Vikas Patra

Guaranteed yields

Despite market fluctuations, you will receive the guaranteed amount. Priority was placed on encouraging farmers to save for rainy days, as this program was initially designed for the agricultural community.

Capital security

It is a risk-free investment option that is not subject to market volatility. When the term expires, you will receive the investment and any profits.


Depending on the number of years invested in KVP at the time of purchase, the effective interest rate for Kisan Vikas patra fluctuates. The present interest rate is 7.5% p.a. for Q2 FY 2023-24, i.e., the quarter beginning on 1 July 2023 and ending on 30 September 2023, compounded annually. By accumulating interest, you will receive greater returns on your investment.

Achieving Maturity

The maturity period for Kisan Vikas Patra is 115 months, after which the corpus can be accessed. The KVP maturity proceeds will continue to accrue interest until they are withdrawn.

Income tax

It is not deductible under section 80C, and the returns are fully taxable. However, Tax Deducted at Source (TDS) is not applicable to withdrawals made after the maturity date.

Restrictions on premature withdrawal

Despite the fact that the account expires in 115 months, the lock-in period is 30 months (2 years and six months). Except in the case of the account holder’s demise or court order, early redemption is prohibited.

Comfort and affordability

KVP is accessible for investment in denominations of Rs.1,000, Rs.5,000, Rs.10,000, and Rs.50,000. There is no upper bound. Please note that Rs.50,000 denominations are only available at the city’s main post office.

Loan secured by a KVP certificate

For secured loans, you can use your KVP certificate as collateral or security. These loans have comparatively lower rates of interest.

Nomination service

Collect a nomination form from the post office and complete it with the required nominee information. If you are nominating a minor, you must include his or her date of birth.

Certificate issuance for KVP

If payment is made in cash, the KVP Certificate is issued immediately; however, if you pay with a check, demand draft, or money order, you must wait until the amount has been cleared by the post office.

KVP Identity Document

This consists of the Kisan Vikas Patra Certificate, the KVP serial number, the quantity, the maturity date, and the maturity amount.

How to Invest in Kisan Vikas Patra and the Necessary Paperwork?

As shown below, buying Kisan Vikas Patra is straightforward.

  1. Gather Form A, the application, and complete it with the required data.
  2. Send the properly completed form to the bank or post office.
  3. When investing in KVP through a broker, the broker must complete Form A1. These forms are also available online for download.
  4. You must produce a PAN, Aadhaar, voter’s ID, driver’s license, or passport as confirmation of your identity and residence as part of the Know Your Customer (KYC) process, which is required.
  5. You must pay the deposit when the documents have been examined. Cash, locally issued checks, pay orders, or demand drafts written in the postmaster’s favor may be used to make the payment.
  6. A KVP certificate will be sent to you right away if you don’t pay with a demand draft, pay order, or check. Keep this secure since you’ll need to turn it in when you’re mature. You may also ask for the certificate to be emailed to you.

In conclusion, make an investment right away if Kisan Vikas Patra appears like a wise choice and aligns with your financial objectives. It is manageable and easy to open. All you have to do is have the money on hand and go to the postal facility once.

Premature Withdrawal

Individuals are permitted to withdraw their proceeds at maturity or prior to maturity. If a person chooses to withdraw their investment amount within a year of purchase, no interest will accrue. In addition, they would incur a penalty for doing so.

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