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This article provides information on how kisan vikas patra works. Read on to know about its investment procedure in Kisan vikas Patra along with its factors and features.

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How to Invest in Kisan Vikas Patra

Kisan vikas patra:-
Financial schemes that double an investment in a reasonable period of time have always attracted people. These schemes can be targeted to situations when money becomes scarce to fulfill needs of a person’s life. Kisan vikas patra is one such scheme from Indian post office that doubles one time investment in a period of 96 months. If a person purchases kisan vikas patra for Rs.5,000 he/she will be getting back Rs.10,000 by the end of 8 years and 7 months.
How kisan vikas patra works:-
Kisan vikas patra works on an interest rate that is compounded annually. KVP certificate has a Lock-in period of 30 months from the date of purchase. Since the interest rate is compounded annually the longer the period of deposit the higher is the earning. By the end of 96 months the amount invested on purchase will be doubled.
Salient features of kisan vikas patra:-
Kisan vikas patra with the backup of Indian government is trusted by people all over the country. The scheme can be accessed from any post office by a person who is above 18 years of age. KVP can be purchased by an adult for self or on behalf of a minor, in a joint name, or by a trust. KVP cannot be purchased by nris and members of a Hindu undivided family.
  • KVP has a maturity of eight years and seven months and during this period KVP can be transferred from one individual to another under standard rules and procedures.
  • The KVP form has to be filled and submitted along with cash/cheque/draft at the post office. An identity slip may be procured from the post office. At the time of maturity, the KVP has to be submitted at the same post office for redemption. However, maturity proceeds can be claimed from any post office by submitting the identity slip received at the time of application of KVP.

    Premature withdrawal:
    If the money is withdrawn before the completion of one year, no interest is payable.
    2. After one year and before the lapse of 2 years 6 months a simple interest is applied to the deposit amount
    3. Any time after 2 years and 6 months, but before the maturity period, interest is calculated as per Government regulations.
  • The maturity proceeds of KVP continue to earn bank interest as specified from time to time till it is withdrawn by the investor.
  • Two or more people can purchase KVP jointly and the conditions of amount payable at the end of period have classifications accordingly.
  • KVP is available in denominations of Rs.100, Rs.500, Rs.1000, Rs.5,000, Rs.10,000 and also Rs.50,000. There is no maximum limit for investments in KVP. Denominations of Rs 50,000 are available only at head post office of a place.
  • Investment in KVP does not enjoy any tax rebate. The interest accrued every year is treated as income and taxed accordingly. No TDS is deducted on the principal amount or interest at the time of withdrawal.
Factors to be considered while purchasing KVP:-
There are few factors that a person needs to be aware of while investing in a KVP.
  • KVP is a certificate that will have the amount invested and amount payable at maturity with date of commencement and date of maturity mentioned. If this certificate is lost during the term then a duplicate certificate can be obtained on application. To be on the safer side a person can ask for a slip that acts as an identity for purchase of KVP from the post office during purchase. This slip can be produced during the application for duplicate KVP in case of loss or mutilation. However these certificates are not available in electronic media as of now which eliminates instances of loss/mutilation/theft, etc.
  • On untimely death of KVP holder, the amount on maturity will be payable to nominee. If there are no nominees then the amount will be payable to legal heir of the KVP holder. At the time of purchase there is a clause in KVP form that gives the person an option to choose nominee during the plan term. A KVP holder can always state a nominee during the term of KVP by signing to this particular clause.
  • Since the investment in KVP is not eligible for deduction under Section 80C, it is most suited for individuals who have completed their requisite investments for qualification under Section 80C. 
Kisan vikas patra serves as a steady income for senior citizens during their retirement years. With minimum conditions and maximum transparency in the scheme, it is easy for a person to understand working of KVP unlike most of the plans (with hidden clause) provided by private organizations.

Note:KVP has been withdrawn w.e.f. 01-Dec-2011

  • RJSIN:
    Some time in 2005 Was approached by Post agents and they got my funds invested in KVP and now matured since 2014.......and by this timet it was NRI < came to know NRI not allowed> for KVP investment. What to do in this respect matured KVP FUNDS till date not encashed from POST OFFICE Suggest what to do and how to make wrong right....without ......HOW Can I contact to IT Deptt and ask the process. KVP invested since 2005.......matutred in 2014-15......still not cashed
    RJ SIN < Email >
    28-Jul-2016 07:12 AM
  • sunita agarwal:
    hello mam, mujhe post office me small amount invest karna hai amount double hone ke liye to mujhe koun se scheme or kisan vikas patra me invest karna please guide kare
    21-Jul-2016 04:22 AM
  • T.S.Sethi:
    how to calculate interest on kVPs purchased during 2015-16 for showing interest every year.
    07-Jun-2016 10:51 PM
    i want to buy kvp on line and monytransfar in post office account this facality may use pl guid me .........went post office h.o but ther is no psycical stock....of kvp pl guid me........
    13-Apr-2016 06:31 AM
    pl chang of kvp silebus and update .........that invester can use .........running int. and maturety
    13-Apr-2016 06:14 AM
    13-Apr-2016 06:10 AM
  • Hitesh Nagar:
    Can i purchase the KVP for every month for the period of 8 year?
    17-Feb-2016 06:10 PM
    I have 5 no of KVC of Rs,10000 denomation each purchased on 17-09-2001. Due to sudden sickness of my wife in Canada i had to rush there and had to stay there for all these years. my KVC could not be en cashed on their date of maturity because the post office demanding me to be personally present to receive the amount bring my identity to prove that I am the same person and also that of son who is a joint signatory in the KVCs and is in Canada. Please guide me as to how to deal this case.
    14-Jan-2016 12:12 PM
    Dear Sir,

    I have purchase KVP in year 2007 and its maturity was Nov.this year.I taken this certificate from ROPAR Post office pin code 140001 .
    in mean time I taken transfer from Ropar to Aurangabad Maharashtra I went to Head Post Office Aurangabad for encasement of this certificate post master has told me that this certificate migration no. is not appearing so we are in position to encashment of this certificate .
    please advice for encashment of my certificate .
    23-Nov-2015 05:32 PM
  • Mohd. Maqbool:
    Whether notice on maturity of kvp is a must to be sent from the post office. And whether the proceeds of kvp can be put in savings account without the consent of the investor.

    Thank you.
    06-Mar-2015 11:16 PM
  • Shivi:
    The KVP scheme has been introduced now (November 2014) with interest rate fixed t 8.7% compounded annually. Only interest outgo above Rs 10,000 will be taxed.
    15-Jan-2015 09:53 PM
  • sanjay sharma:
    how to invest in kvp because i am interested in 100000 rupess in partly like 20000 ,15000 as like its benefits please advice me
    06-Jan-2015 07:18 AM
  • melwin dourado:
    how do i calculate interest rate for 8 years and 7 months. and what will be tax for senior citizen
    02-Apr-2014 06:19 PM
  • haresh:
    How do i calculate interest on kvp if i have complete 3 years and 6 month?
    17-Jul-2013 11:04 PM
  • chandra sekhar das:
    can any of the joint holder can close and withdraw money from premature kvp?
    21-Mar-2013 09:41 PM
  • mrs, suhasini soorian:
    hope kvp is still existing. Which are the other schemes? where i can invest for one time?
    06-Mar-2013 03:26 PM
    • sumiti: where we can invest one time. .what is the best scheme like kisanpatra
      18-Apr-2016 10:46 PM
  • anu:
    How to i calculate interest on kvp if i have complete 3 years and 6 month
    25-Jan-2013 04:59 PM
  • PL Hariharan:
    suppose if i invest 10000 INR now in KVP after 8 years and 7 months , i will get double like 20000 INR.
    How much tax will be deducted for this ?
    10-Jan-2013 09:36 PM
  • satyabrata behera:
    please let me know about that on telephonic call. if they of executive call me and say something about that matter then i should be deeply grateful to you.
    08-Dec-2012 04:43 PM
    I am wishing to buy KVP online . How can I do that from Post offices . Please assist.
    25-Nov-2012 06:21 PM
    • Sophia: I am working in Dubai. I like to purchase KVP. How I can. Please guide me
      09-Dec-2014 10:49 PM
      10-Dec-2014 03:08 PM
  • omistry:
    why has KVP been discontinued w.e.f. Dec 2011?
    01-Nov-2012 07:12 PM
  • kamlesh:
    excellent article
    11-Jul-2012 03:38 PM