The Kisan Vikas Patra (KVP) is a 115-month investment scheme designed for Indian citizens aged 10 and over, allowing deposits starting from ₹1,000. According to reports from Mint, this post office investment scheme was started in 1988 as an initiative to help farmers save for the long term, but is now available to all Indian citizens above the age of 10 years. The scheme offers a minimum investment of ₹1,000 with no upper cap, and all deposits require Aadhaar as proof of identity.
As reported by Mint, the KVP currently offers an interest rate of 7.5% for this quarter. The money invested doubles on maturity, but interest earned is taxable with no deduction under Section 80C. For investments above ₹50,000, PAN Card proof is required, while for deposits of ₹10 lakh and more, investors must also show income proof. Additionally, TDS is deducted at 10% every year on the interest credited. According to the latest Finance Ministry notification, the rate has remained unchanged for 14 quarters since April 1, 2023, with the doubling period staying at 115 months.
According to the official website cited in Mint reports, the account may be closed prematurely at any time before maturity under specific circumstances. These include death of account holder(s), forfeiture by a pledgee being a Gazetted officer, and when ordered by court. For premature closure, the account holder or nominee receives the principal amount along with simple interest calculated at the rate applicable to Post Office Savings Account for the complete months held. Accounts closed after two years and six months from opening are payable inclusive of interest.
As detailed in Mint reports, account transfer is allowed only when the transferee is eligible to open an account under this scheme. This occurs on death of account holder(s) to nominee/legal heirs, death of any account holder in joint account to surviving holder(s), court order, or pledging of account. Transfer/pledging may be made to the President of India/Governor of a State, RBI/Scheduled Bank/Co-operative Society/Co-operative Bank, corporations, government companies, local authorities, and housing finance companies approved by National Housing Bank. KVP certificates are highly recognized by Indian banks and can easily be pledged as security/collateral to secure personal or business loans.
According to Mint reports, the scheme allows account transfer to another user and can have up to three joint holders. For minors (below 18 years of age), an adult can open the account and then transfer it once they attain majority age. The scheme is a low-risk small savings certificate guaranteed by India Post with no deduction under Section 80C, making it accessible to a wide range of investors seeking long-term savings options. As per the latest Finance Ministry notification, KVPs can be bought singly or jointly, and on behalf of minors, and any future revision would only change the doubling period on fresh certificates.
