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Kisan Vikas Patra Scheme


Kisan Vikas Patra Scheme

The Kisan Vikas Patra is a long-term investment scheme which was launched in 1988 by the Government of India and was re-launched in the year 2014 after equipping it with updated features. Kisan Vikas Patra certificates are available in the denominations of Rs.1000, Rs.5000, Rs.10000 and Rs.50000. The minimum amount that can be invested under the Kisan Vikas Patra scheme is Rs.1000. However, there is no upper limit on the purchase of Kisan Vikas Patra certificates.

Reason to Invest in Kisan Vikas Patra

The amount invested in KVP doubles in 112 Months (9 Years and 4 Months). The reason behind the KVP scheme’s success is because of its easy processing and vast availability at post offices across India. Any resident Indian can invest in the Kisan Vikas Patra scheme jointly or as an individual. It is mandatory to submit the PAN Card proof for investments over Rs.50,000 and income source proof for investments exceeding Rs.10 lakh. After the new scheme was introduced in 2014, the interest rate was revised to 8.7% per annum and hence, the principal doubles faster when compared to the old KVP scheme.

Who can Invest in Kisan Vikas Patra

The following types of persons and entities are eligible to invest in Kisan Vikas Patra scheme:

  • Adult Indian Citizen who is a Resident India.
  • A Parent or Guardian can invest on behalf of a minor.
  • Trusts are eligible to invest in Kisan Vikas Patra.
  • HUFs (Hindu Undivided Family) and NRIs are not eligible to invest in KVP.

Types of Kisan Vikas Patra Certificates

There are different types of Kisan Vikas Patra schemes. These schemes are intended for different purposes as below:

Single Holder Type Certificate

This type of KVP is issued to an adult, or a minor, or to an adult on behalf of a minor.

Joint A Type Certificate

This is issued to two adults jointly and is payable to both the owners and the survivor.

Joint B Type Certificate

This Type B Kisan Vikas Patra is issued jointly to two adults and is payable to either of the KVP holders jointly or to the survivor. KVP, when of Type A and Type B, is released to both the combined owners.

Obtaining Kisan Vikas Patra Certificates

To apply for the Kisan Vikas Patra certificate, an application form along with the relevant information and proofs of the owner should be submitted. The application form must be inclusive of the following details:

  • The method of payment which can either be in cash or cheque
  • Type of KVP certificate, whether it is single or joint “A” or joint “B”
  • The name of combined owners if KVP type is not single
  • In case of a minor, the date of birth of the minor and his guardian who can deposit and withdraw the KVP amount.
  • Name of all nominees with full address and date of birth.

Loan Against Kisan Vikas Patra Certificates

One can avail a loan by using Kisan Vikas Patra Certificates as collateral for personal use. Following are the steps and requirements to apply for a loan in the Kisan Vikas Patra Scheme:

  • The loan applicant must have a Kisan Vikas Patra under his own name.
  • The loan against KVP can be availed for business or personal purposes only. The loan cannot be availed for any speculative ones.
  • Different banks have different charges and interest for loans against KVP. The charges vary from time to time and select banks may charge a processing fee for loan sanctioning.
  • The loan should be repaid within the tenure of Kisan Vikas Patra, which is 8 years and 4 months.
  • The margin and the loan amount will be decided by the bank based on the Kisan Vikas Patra certificates investment amount and maturity.