Kisan Vikas Patra (KVP)

Scheme Introduction: A Brief Overview

Saving money for the future is one of the most important financial habits, but many people prefer investment options that are safe, government-backed, and free from market risks. To encourage long-term savings among citizens, the Government of India offers the Kisan Vikas Patra (KVP) Scheme, a popular small savings scheme that provides guaranteed returns on investment.

Kisan Vikas Patra is a fixed-income savings scheme available through Post Offices and authorized banks across India. The scheme is designed for individuals who wish to invest their money for the long term and receive assured returns without worrying about fluctuations in the stock market. One of the biggest attractions of KVP is that the invested amount doubles after a specified maturity period determined by the applicable interest rate at the time of account opening.

Currently, Kisan Vikas Patra offers an interest rate of 7.5% per annum, compounded annually, and investments mature in approximately 115 months. Investors can start with a minimum investment of ₹1,000 and invest any amount thereafter in multiples of ₹100. There is no upper limit on investment, making the scheme suitable for both small and large investors.

The scheme is open to resident Indian individuals, including adults, minors above the age of 10 years, and guardians investing on behalf of minors or persons of unsound mind. Investors can open single or joint accounts and may hold multiple KVP accounts simultaneously.

Apart from providing guaranteed returns, the scheme also offers nomination facilities, account transfer options, premature closure under specified circumstances, and the ability to pledge the account as security for obtaining loans. Due to its government backing and simple investment process, Kisan Vikas Patra continues to be one of the most trusted savings schemes available in India.

While Kisan Vikas Patra is a suitable option for individuals seeking guaranteed returns and long-term wealth creation, investors may also explore other government-backed savings schemes based on their financial goals. For example, the Sukanya Samriddhi Yojana (SSY) is designed to build a secure financial future for girl children, the Mahila Samman Saving Certificate Scheme provides an attractive short-term savings option for women, and the Gold Monetisation Scheme enables individuals to earn returns on idle gold holdings. Exploring these schemes alongside KVP can help investors choose the most suitable savings and investment option for their needs.

Scheme Benefits and Key Features

• Earn an annual interest rate of 7.5% compounded yearly.
• The invested amount doubles in 115 months (9 years and 7 months).
• There is no maximum investment limit under the scheme.
• The account can be pledged as security for obtaining loans from eligible institutions.
• Kisan Vikas Patra (KVP) can be transferred between eligible individuals and Post Offices as per scheme rules.
• The scheme provides a nomination facility for financial security of family members.
• Premature encashment is permitted after 2 years and 6 months, subject to the prescribed conditions.
• The scheme is backed by the Government of India, ensuring safety and reliability of the investment.

Eligibility Criteria

The following persons are eligible to open a Kisan Vikas Patra account:

• Resident Indian individuals.
• An adult in his or her own name.
• A minor who has attained the age of 10 years.
• A guardian on behalf of a minor.
• A guardian on behalf of a person of unsound mind.

Joint Account Eligibility

Joint accounts can be opened by up to three adults under the following categories:

• Joint A Type Account: The account is payable jointly to all account holders or the surviving account holders.
• Joint B Type Account: The account is payable to any of the account holders or the surviving account holders.

Important Eligibility Notes

• An individual can open multiple KVP accounts.
• There is no restriction on the number of accounts that can be held.
• Upon attaining 18 years of age, a minor account holder must submit a fresh Account Opening Form and KYC documents to convert the account into an adult account.
• Accounts can also be opened through e-Banking facility.
• It is to be noted that Post Office Savings Account is a prerequisite for availing internet banking facility.

Transfer of Account

An account may be transferred from one individual to another, subject to the condition that the transferee is eligible to open an account under this Scheme, in following conditions only :

• a. On the death of account holder(s) to nominee/legal heirs
• b. On the death of any of account holders in joint account to surviving holder(s)
• c. On the order of the court d. On pledging of account

Required Documents

Applicants may be required to submit the following documents:

• Identity proof (Aadhaar Card
• Address proof
• PAN Card
• Passport Size Photograph
• Bank account details
• Mobile Number

Additional documents may be required depending on the applicant category.

Steps to Apply

• Offline Process
  • Visit the nearest Post Office or authorized bank offering Kisan Vikas Patra services.
  • Obtain the Kisan Vikas Patra Account Opening Form and fill in the required details.
  • Provide personal information, investment details, and nominee details in the application form.
  • Attach the required KYC documents such as Aadhaar Card, PAN Card, photograph, and address proof.
  • Deposit the desired investment amount along with the application.
  • Submit the completed form and supporting documents to the concerned official.
  • The submitted application and documents will be verified by the Post Office or bank.
  • Upon successful verification, the Kisan Vikas Patra account will be opened.
  • A passbook or account details will be issued as proof of investment.

Payment On Maturity

• The maturity period for accounts opened between 12 December 2019 and 31 March 2020 (both days inclusive) is 9 years and 5 months.
• The amount deposited in the account will double on maturity, and the maturity proceeds will be payable to the account holder.
• For accounts opened on or after 1 April 2020, the maturity period is 10 years and 4 months.
• The amount deposited in the account will double on maturity.
• The maturity period of a Kisan Vikas Patra account is determined based on the interest rate applicable at the time of opening the account.

Payment Procedure

• The investment amount can be paid in cash at the Post Office or authorized bank.
• Payment can also be made through a locally payable cheque, pay order, or demand draft drawn in favour of the Postmaster or the concerned bank.
• Investors may use funds from their Post Office or bank savings account by submitting a duly signed withdrawal form, cheque, passbook, or other prescribed documents.
• The chosen payment mode must comply with the rules applicable at the concerned Post Office or bank branch.

Issuance of Certificate

• A Kisan Vikas Patra certificate is generally issued immediately after the payment is received.
• When payment is made in cash, the date of issue of the certificate is usually the same as the date of payment.
• If payment is made through a cheque, pay order, or demand draft, the certificate is issued only after the payment instrument has been successfully cleared.
• In such cases, the date of issue of the certificate will be the date on which the cheque, pay order, or demand draft is realized.
• If the certificate cannot be issued immediately, a temporary receipt may be provided to the investor.
• The temporary receipt can later be exchanged for the actual certificate.
• In such cases, the date mentioned on the temporary receipt will be treated as the official date of issue of the certificate.

Premature Closure of Account

• The account may be closed before maturity by submitting the prescribed application form to the Accounts Office under the following circumstances:
  • Upon the death of the account holder in a single account, or the death of any or all account holders in a joint account.
  • Upon forfeiture of the account by a pledgee who is a Gazetted Officer.
  • When closure is ordered by a competent court.
• In the above cases, the account holder or eligible claimant will receive the principal amount along with simple interest calculated at the rate applicable to Post Office Savings Accounts for the period the account was held.
• However, if the account is closed after the completion of 2 years and 6 months from the date of opening, the amount payable, including interest, will be calculated according to the prescribed premature closure value applicable under the scheme.
• The premature closure value depends on the period for which the account has remained active and is determined as per the rates notified under the Kisan Vikas Patra Scheme.

Relevant Links

• Official Website of Indian Post Office
• Post Office Saving Scheme Page
• National Saving Institute NSI official Poratl
• Kisan Vikas Patra Scheme Details in the NSI Page
• Kisan Vikas Patra Froms and Other Details
• Kisan Vikas Patra Scheme Details
• Form -1
• Form -2
• Form -3
• Form -4

Contact Information

• Centre For Excellence in Postal Technology, Bengaluru, Karnataka, 560001
• E-mail : [email protected]
• Indian Post Office Toll Free Number: 1800 266 6868