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Kisan Vikas Patra - Interest Rate, Scheme, Features & Eligibility

Kisan Vikas Patra is a small savings instrument launched for farmers to help them save for long term. Read on to know more

<div class="paragraphs"><p>Source: Image by Freepik</p></div>
Source: Image by Freepik

Kisan Vikas Patra is an Indian government-backed guaranteed return program that promises to double your money after a certain amount of time. If your Kisan Vikas Patra interest rate is higher, your money will double in value faster; if it is lower, it will take longer to double your investment. But before you invest your money, it is essential to learn about the characteristics of the Kisan Vikas Patra scheme including the tax benefits, eligibility, etc.

Continue reading to learn about the scheme, current KVP interest rates, features, eligibility, and more.

What Is The Kisan Vikas Patra Scheme?

The Kisan Vikas Patra is a flexible investment product backed by the government of India and is available as certificates. It is a fixed-rate small savings plan that will double your investment after a specific amount of time. The program provides the nation's farmers with a strong long-term savings mechanism because it is supported by the government. It can be opened by an adult farmer or on behalf of a juvenile through an adult guardian and is only intended for the farming community.

KVP Interest Rate

There is little risk associated with the Kisan Vikas Patra program. Like other savings plans, the interest on this one is compounded annually. You can earn interest on the principal plus interest from the prior year thanks to compound interest. Simply said, the compound interest allows you to earn more on your deposits than simple interest. For the year 2022, the Kisan Vikas Patra scheme is offering an interest rate of 6.9% p.a. Up until September 2022, the KVP interest rate will be in effect. Under the scheme, it will take roughly 10 years or 124 months for your money to double.

Kisan Vikas Patra Eligibility

Read on to know the eligibility of the Kisan Vikas Patra scheme:

  • The candidate must be an Indian citizen

  • The candidate must be above 18 years of age

  • Some trusts are also allowed to purchase/invest in KVP

  • A minor is not allowed to purchase KVP. But a person who is at least 18 years old can buy KVP certificates on behalf of a minor

  • Kisan Vikas Patra can be obtained under various types of certificates in the applicant's name, on behalf of a minor, or jointly by two people

  • Hindu Undivided Families (HUF) and NRIs (non-residents of India) are unable to invest in KVP.

Features Of The KVP

In addition to the high KVP interest rate, there are many other features and benefits of this scheme. Let us take a better look at each of the features of KVP:

  • Being a government-sponsored savings plan, KVP guarantees a significant return on investment over a considerable amount of time. This indicates that the account holder will get the collected funds as a maturity benefit at the completion of the scheme's term.

  • The scheme accepts deposits in set amounts of Rs. 1,000, Rs. 5,000, Rs. 10,000, and Rs. 50,000. Subject to using the denominations indicated above, there are no restrictions or upper limits on the amount that may be invested.

  • KVP certificates have a 30-month or 2-and-a-half-year lock-in period during which you are not allowed to withdraw money from the account without incurring penalties.

  • The age required to invest in this program is 18 years old.

  • NRIs are not eligible for the scheme, whether they are doing so individually or as a unit of a Hindu Undivided Family (HUF).

  • There are no tax benefits offered by this KVP scheme. The interest is paid annually and is subject to taxation as "Income from Other Sources." Additionally, TDS is deducted from the interest. But the total amount due at maturity, however, is not deductible for tax purposes.

  • You will obtain an identity slip after making a deposit, and you must present it when requesting a withdrawal or transfer.

  • To make deposits under the Kisan Vikas Patra scheme, you do not require a PAN card.

Disclaimer: The interest rates mentioned in this article are recorded at the time of writing and are subject to change. BQ Prime does not endorse any of the interest rates mentioned above. Please invest at your own discretion.