Kisan Vikas Patra (KVP) is a government-backed savings scheme in India, designed to encourage long-term investment habits among citizens. Launched in 1988, KVP offers a secure and guaranteed return, making it an attractive option for risk-averse investors. As of 2025, the scheme has undergone several updates to enhance its benefits and accessibility.
What is Kisan Vikas Patra?
Kisan Vikas Patra is a fixed-income investment scheme where the invested amount doubles over a predetermined period. The scheme is available through designated post offices and public sector banks across India. It is particularly favored by individuals seeking a low-risk investment avenue with assured returns.
Key Features of Kisan Vikas Patra 2025
- Interest Rate: As of the fourth quarter of the financial year 2024-25, KVP offers an annual interest rate of 7.5%, compounded annually. At this rate, the invested amount doubles in approximately 115 months (9 years and 7 months). paisabazaar.com
- Minimum and Maximum Investment: The minimum investment required is ₹1,000, with no upper limit on the amount that can be invested. business-standard.com
- Maturity Period: The maturity period for KVP is 115 months. Upon maturity, the invested amount doubles. For instance, an investment of ₹10,000 will yield ₹20,000 at the end of the maturity period.
- Premature Withdrawal: Premature encashment is allowed after a lock-in period of 2.5 years (30 months) from the date of issuance. However, premature withdrawals before this period are permitted only under specific circumstances, such as the death of the certificate holder or a court order.
- Taxation: Investments in KVP do not qualify for deductions under Section 80C of the Income Tax Act. Additionally, the interest earned is taxable as per the investor’s income tax slab. TDS (Tax Deducted at Source) is not applicable on the interest; however, investors are required to declare the interest income and pay taxes accordingly.
Eligibility Criteria
- Residency: The scheme is open to Indian residents.
- Age Limit: Individuals aged 18 years and above are eligible to invest.
- Minor Investment: Investments on behalf of minors can be made by parents or legal guardians.
- Non-Eligibility: Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to invest in KVP.
Types of KVP Accounts
- Single Holder Type Certificate: Issued to an individual adult for self or on behalf of a minor.
- Joint ‘A’ Type Certificate: Issued jointly to two adults, payable to both holders jointly or to the survivor.
- Joint ‘B’ Type Certificate: Issued jointly to two adults, payable to either of the holders or to the survivor.
How to Invest in Kisan Vikas Patra
Offline Investment Procedure
- Obtain Application Form (Form A): Visit the nearest post office or authorized bank to collect the KVP application form.
- Fill in the Details: Provide necessary information such as the applicant’s name, address, and the amount to be invested.
- Submit Required Documents: Attach identity proof (Aadhaar card, PAN card, etc.) and address proof along with the application form.
- Make Payment: The investment amount can be paid via cash, cheque, or demand draft.
- Receive KVP Certificate: Upon verification and processing, the KVP certificate will be issued to the investor.
Online Investment Procedure
Some banks offer the facility to invest in KVP through their online banking portals. The process generally involves logging into the net banking account, selecting the KVP option, filling in the required details, and making the payment online. The e-KVP certificate is then generated and can be downloaded for records.
Benefits of Kisan Vikas Patra
- Assured Returns: Being a government-backed scheme, KVP offers guaranteed returns, making it a safe investment option.
- No Upper Investment Limit: Investors can invest any amount starting from ₹1,000, with no maximum limit, allowing flexibility based on individual financial goals.
- Ease of Transfer: KVP certificates can be transferred from one person to another and from one post office or bank to another, facilitating flexibility and convenience.
- Loan Facility: KVP certificates can be used as collateral to avail loans from banks and financial institutions, providing liquidity without premature withdrawal.
Comparison with Other Savings Schemes
While KVP offers assured returns, it’s essential to compare it with other savings schemes to make an informed investment decision.
| Scheme | Interest Rate (2025) | Maturity Period | Tax Benefits |
|---|---|---|---|
| Kisan Vikas Patra (KVP) | 7.5% | 115 months | No tax benefits; interest is taxable |
| Public Provident Fund (PPF) | 7.1% | 15 years | Tax deduction under Section 80C; interest is tax-free |
| National Savings Certificate (NSC) | 6.8% | 5 years | Tax deduction under Section 80C; interest is taxable |
| Fixed Deposits (FDs) | 5.5% – 7.5% | Varies (7 days to 10 years) | Tax deduction under Section 80C (5-year FD); interest is taxable |
*Note: Interest rates are