Kisan Vikas Patra (KVP) is a small savings scheme launched by the India Post. It is mainly targeted at sections of society and farmers who have limited means or access to financial investment options or those looking beyond National Savings Certificate (NSC) and Public Provident Fund (PPF). It was first launched in 1988 and was discontinued in 2011 by the previous government to prevent misuse of the scheme for purposes like money laundering. It was then reintroduced in 2014 by the current government to utilize the generated revenue for various schemes entitled for the farmers.
The KVP scheme can be purchased by an Indian adult in his/her own name, or on behalf of a minor; a trust; and two adults jointly.
The certificates shall be of the following types:
The KVP interest rate currently is 7.6% which is subject to periodic revision by the government. The principal amount invested will be doubled in a period of 9 years and 5 months (maturity period). For instance, the amount payable on encashment of certificate during maturity is Rs. 2000 for denomination of Rs. 1000, and similarly at proportionate rates for other denominations.
KVP certificates have a lock-in period of 2 ½ years. Thereafter, investors can redeem in every six months interval. However, a certificate may be prematurely en-cashed any time in any of the following circumstances:
KVP certificates can be purchased from any departmental post office and designated bank branches, by filling up the application form and depositing money in cash, or by cheque or demand drafts. Banks will then issue a KVP certificate along with an identity slip for future reference.
The scheme is available for a minimum deposit of Rs. 1,000 and no maximum limit. It is available in denominations of Rs. 1,000, Rs. 5,000, Rs. 10,000 and Rs. 50,000.
If a KVP certificate is lost, stolen, destroyed, mutilated or defaced, the KVP holder can write to the post office of issue requesting for a duplicate certificate. One needs to attach the identity slip that was given at the time of certificate issue which proves ownership of KVP.
The KVP certificate issued to the beneficiary can be transferred from one person to another and from one post office (or bank) to another. People can utilize the facility in case of emergency or according to any other need. In order to transfer the certificate, the holder will have to submit a handwritten consent to the officer at the post office or bank. The transferee must be a resident Indian and eligible to purchase the KVP certificate. One needs to provide ID and address proof to avail the same.
A certificate can be en-cashed at the post-office or the bank where it was issued. It can also be en-cashed at another post-office or bank provided the issuing authority is satisfied with the verification of the identity and other details of the KVP holder.
Some of the benefits for investing in the KVP scheme are as follows:
Individuals will have to conform to KYC norms and furnish an identification proof (Passport, Pan Card, Driving Licence, Voter ID Card, etc.) and an address proof (Telephone bill, Electricity bill, Bank or PO statement, Ration Card, etc.). For investments over Rs. 50,000 PAN Card proof is mandatory. For investments exceeding Rs. 10 lakh, a proof for income source is compulsory. [irp]