Kisan Vikas Patra (KVP) is an investment scheme which was first launched by Govt. of India in 1988. Its objective is to encourage small savings for longer period. A person having even INR 1,000/- can invest in KVP. Its features are:
- KVP can be purchased in the denomination of INR 1000, 5000, 10000 and 50000.
- There is no upper limit on investment amount.
- Minimum amount required is INR 1,000/-
- It can be held in single and joint names (max two).
- Only individuals can subscribe to this Scheme.
- Nomination facility is also available.
- It can be pledged as security for loan from banks.
- Lock in period is 2 years and six months.
- Money will get doubled in 100 months.
- 8.70% interest compounded annually.
- To provide liquidity, KVP can be encashed after 2 years and 6 months and thereafter in the block of six months as per table given at the end of this post.
- KVP is available at all post offices and nationalized banks.
- KVP can be transferred from any post office/ bank to another post office/ bank.
- No deduction is available u/s 80C for investment in KVP.
- Interest earned is not subject to TDS under this Scheme. One need to deposit tax to Govt. if his total income exceeds to maximum amount chargeable to tax.
Table for Maturity Value of INR 1,000
| Period | Encashed Amount (INR) |
|---|---|
| 2 years 6 months or more but less than 3 years | 1,201 |
| 3 years or more but less than 3 years 6 months | 1,246 |
| 3 years 6 months or more but less than 4 years | 1,293 |
| 4 years or more but less than 4 years 6 months | 1,341 |
| 4 years 6 months or more but less than 5 years | 1,391 |
| 5 years or more but less than 5 years 6 months | 1,443 |
| 5 years 6 months or more but less than 6 years | 1,497 |
| 6 years or more but less than 6 years 6 months | 1,553 |
| 6 years 6 months or more but less than 7 years | 1,611 |
| 7 years or more but less than 7 years 6 months | 1,671 |
| 7 years 6 months or more but less than 8 years | 1,733 |
| 8 years or more but before maturity | 1,798 |
| At maturity | 2,000 |
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