Kisan Vikas Patra – Invest 50,000 Rs, Get Return 1 Lakh – Money Doubling Scheme

Kisan Vikas Patra

Kisan Vikas Patra (KVP) is one of the most reliable and secure investment schemes offered by the Indian government through the Post Office. Launched in 1988, KVP was initially aimed at farmers to encourage long-term savings and financial security. However, the scheme has since been opened to all Indian citizens, making it a popular choice for those looking to invest their money safely with guaranteed returns. In this comprehensive guide, we will explore the various aspects of KVP, including its features, benefits, eligibility criteria, and application process, and provide a detailed analysis of why it is considered one of the best long-term investment options available.

Understanding Kisan Vikas Patra

What is Kisan Vikas Patra?

Kisan Vikas Patra is a savings certificate scheme offered by the Indian government through Post Offices across the country. It is designed to provide a secure and guaranteed return on investment over a long-term period. The primary objective of KVP is to promote savings among individuals by offering attractive returns and the assurance of doubling the invested amount within a specified time frame.

Interest Rate and Returns

As of the current scheme, KVP offers an interest rate of 7.5% per annum. The unique selling point of KVP is its promise to double the investment amount in a fixed period. As per the latest terms, an investment in KVP will double in 115 months, which translates to 9 years and 7 months. This makes KVP an attractive option for those seeking a safe and predictable investment with long-term benefits.

Key Features of Kisan Vikas Patra

1. Guaranteed Returns: One of the most significant advantages of KVP is the guaranteed doubling of the investment amount. The fixed interest rate ensures that investors can predict the exact returns on their investments.
2. Flexible Investment Amount: Investors can start with a minimum investment of Rs. 1000. There is no upper limit on the amount that can be invested, making it accessible for both small and large investors.
3. Long-Term Investment: KVP is ideal for those looking for a long-term investment option. The maturity period of 115 months allows for substantial growth of the invested amount.
4. Transferability: KVP certificates can be transferred from one person to another. This feature adds to the flexibility and convenience of the scheme.
5. Nomination Facility: Investors can nominate beneficiaries for their KVP investment, ensuring that the proceeds are passed on to their chosen nominees in the event of their demise.
6. Premature Withdrawal: Although KVP is designed for long-term savings, premature withdrawals are allowed after a lock-in period of 2 years and 6 months. This provides some liquidity in case of emergencies.

Also Read… Invest 100 Rs and Earn Form Post Office Schemes

Eligibility and Documentation

To invest in Kisan Vikas Patra, certain eligibility criteria and documentation are required:

1. Eligibility:
   • Any Indian citizen above the age of 18 years can invest in KVP.
   • Minors can also invest through their parents or guardians.
   • KVP accounts can be opened individually or jointly.
   • Non-Resident Indians (NRIs) are not eligible to invest in KVP.
2. Required Documents:
   • Aadhaar Card
   • Age proof certificate (e.g., birth certificate, school leaving certificate)
   • Passport-size photographs
   • PAN card (mandatory for investments above Rs. 50,000)
   • KVP application form
   • Additional documents like salary slips, Income Tax Returns (ITR), and bank statements may be required for higher investment amounts to comply with anti-money laundering regulations.

How to Invest in Kisan Vikas Patra

Investing in Kisan Vikas Patra is a straightforward process. Here’s a step-by-step guide to help you get started:

1. Visit the Nearest Post Office: KVP certificates are available at all Post Offices across India. Visit your nearest Post Office to start the investment process.
2. Obtain the KVP Application Form: Collect the KVP application form from the Post Office. Alternatively, the form can be downloaded from the official Post Office website.
3. Fill Out the Application Form: Complete the application form with accurate details. Ensure that all the required fields are filled correctly to avoid any delays in processing.
4. Submit Required Documents: Along with the completed application form, submit the required documents such as Aadhaar Card, age proof certificate, passport-size photographs, and PAN card (if applicable).
5. Make the Investment: Pay the desired investment amount in cash, cheque, or demand draft at the Post Office. For cash investments above Rs. 50,000, providing a PAN card is mandatory.
6. Receive the KVP Certificate: Once the payment is processed, you will receive the KVP certificate. This certificate serves as proof of your investment and contains details such as the investment amount, date of issue, and maturity date.

Benefits of Investing in Kisan Vikas Patra

1. Security and Reliability: KVP is backed by the Government of India, ensuring complete security and reliability of the investment. Investors can have peace of mind knowing that their money is safe and will yield guaranteed returns.
2. Attractive Returns: With an interest rate of 7.5% per annum, KVP offers attractive returns compared to many other fixed-income investment options. The assurance of doubling the investment amount within 115 months adds to its appeal.
3. Tax Benefits: While the interest earned on KVP is taxable, the amount invested is exempt from Wealth Tax. This can provide some relief to investors in higher tax brackets.
4. Easy Transfer and Nomination: The transferability of KVP certificates and the availability of nomination facilities make it a flexible investment option. Investors can easily transfer the certificates to another person or nominate beneficiaries.
5. Premature Withdrawal Facility: The option to withdraw the investment prematurely after a lock-in period of 2 years and 6 months provides liquidity and flexibility in case of emergencies.

Case Study: Maximizing Returns with Kisan Vikas Patra

To illustrate the benefits of KVP, let’s consider a case study:

Mr. Sharma, a 40-year-old businessman, decides to invest Rs. 5 lakh in Kisan Vikas Patra. Given the current interest rate of 7.5%, his investment will double in 115 months, which is approximately 9 years and 7 months. At the end of the maturity period, Mr. Sharma will receive Rs. 10 lakh.

This substantial return on investment highlights the effectiveness of KVP as a long-term savings tool. By choosing a secure and guaranteed scheme like KVP, Mr. Sharma ensures that his money grows steadily over time, providing financial stability for his future needs.

Comparison with Other Investment Options

To better understand the advantages of KVP, let’s compare it with other popular investment options:

1. Fixed Deposits (FDs): Fixed Deposits are a common investment choice for risk-averse individuals. While FDs offer guaranteed returns, the interest rates are often lower than those of KVP. Additionally, the premature withdrawal penalties on FDs can be more restrictive compared to KVP.
2. Public Provident Fund (PPF): PPF is another long-term investment scheme with tax benefits. However, the maturity period for PPF is 15 years, which is longer than KVP’s 115 months. KVP offers more flexibility with premature withdrawals and transferability.
3. Mutual Funds: Mutual funds provide higher returns potential but come with market risks. Unlike KVP, mutual funds do not guarantee returns, and the investment value can fluctuate based on market conditions.
4. Equity Investments: Investing in equities can yield significant returns, but the associated risks are also higher. KVP offers a safer alternative with guaranteed returns and no market risk.

Important Considerations

While Kisan Vikas Patra offers numerous benefits, there are some important considerations to keep in mind:

1. Taxation: The interest earned on KVP is taxable under “Income from Other Sources.” Investors need to factor in the tax implications while calculating the net returns.
2. Lock-In Period: Although KVP allows premature withdrawals, there is a lock-in period of 2 years and 6 months. Investors should be prepared to keep their funds invested for the entire duration to maximize returns.
3. Inflation Impact: Like all fixed-income investments, KVP returns may be affected by inflation. Investors should consider the real rate of return after accounting for inflation.

Conclusion

Kisan Vikas Patra is an excellent investment option for individuals seeking a secure and guaranteed return on their investments. With its attractive interest rate, flexible investment amount, and guaranteed doubling of the investment within 115 months, KVP stands out as a reliable long-term savings scheme. The ease of transferability, nomination facilities, and premature withdrawal options add to its appeal.