Kisan Vikas Patra: Change in Interest Rate for KVP

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Central Government has announced change in interest rate on Kisan Vikas Patra for 3rd quarter (2022-23) i.e. January-March (2023). Deposit made in Kisan Vikas Patra(KVP) will now gate interest at the compounded rate of 7.2% per annum from 7% per annum.

Kisan Vikas Patra 1
Kisan Vikas Patra

Kisan Vikas Patra- Overview

The Kisan Vikas Patra (KVP) is a savings scheme that was introduced by the Indian government in 1988 to encourage small farmers and rural citizens to save money for their future needs. The scheme is administered by the Department of Posts and is available through post offices across the country.

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The KVP certificate is a government-backed investment option that offers a fixed rate of interest. The minimum investment amount is Rs. 1000 and there is no maximum limit. The investment can be made in multiples of Rs. 1000. The interest rate on KVP is currently 6.9% per annum, compounded annually but payable on maturity. The maturity period for KVP is 124 months (10 years 4 months).

Name of SchemeKisan Vikas Patra
Managed By Department of Post
Tenure of Investment124 Months
Interest Rate7.2% (January-March 2023)
Lock-in Period 2 Years 6 Months
Minimum Amount₹ 1000
Official Websitehttps://www.indiapost.gov.in/

Kisan Vikas Patra- Important Features

Kisan Vikas Patra is have many benefits which make it very attractive investment. Some of the features are-

Pro

  • Collateral Loan -KVP scheme can be used as collateral for loans. This means that individuals can use their KVP certificate as security to obtain a loan from banks and other financial institutions. This feature can be particularly beneficial for small farmers and rural citizens who may not have access to other forms of collateral.
  • Ease of Investment- Another advantage of the KVP scheme is that it is relatively easy to invest in. Investors can purchase a KVP certificate from any post office and the investment can be made in cash, by cheque, or by money order. Additionally, the scheme allows for easy transfer and encashment of the certificate.

Con

  • Low Interest Rate- One of the main disadvantages is that the interest rate on KVP is lower compared to other fixed income investments such as Public Provident Fund (PPF) and National Savings Certificate (NSC).
  • No Tax Benefit- The scheme is not eligible for tax benefits under Section 80C of the Income Tax Act, unlike PPF and NSC.

Kisan Vikas Patra- Through out Years

The Kisan Vikas Patra (KVP) scheme, introduced by the Indian government in 1988, has seen a steady growth over the years. The scheme is aimed at encouraging small farmers and rural citizens to save money for their future needs and has been administered by the Department of Posts through post offices across the country.

In the initial years, the scheme did not see much participation as people were not aware of it and also the interest rate offered was not very attractive. However, over the years, the government has made several changes to the scheme to make it more attractive to investors.

In 2014, the government reintroduced the scheme after a gap of several years and made changes such as reducing the maturity period from 120 months to 112 months, and increasing the interest rate from 8.5% to 8.7%. This led to an increase in the number of people investing in the scheme.

Data from the government shows that in the financial year 2014-15, the total investment in the KVP scheme was around Rs. 2,900 crores. This number increased to around Rs. 3,600 crores in 2015-16 and further to Rs. 4,600 crores in 2016-17.

The trend of growth continued in the subsequent years as well, with investment in the KVP scheme reaching Rs. 6,500 crores in 2017-18 and Rs. 8,500 crores in 2018-19.

Interest rate over years is as follows-

YearInterest Rate
Q3 FY 2022-237.0%
Q2 FY 2022-236.9%
Q1 FY 2022-236.9%
Q4 FY 2021-226.9%
Q3 FY 2021-226.9%
Q2 FY 2021-226.9%
Q1  FY 2021-226.9%
Q4 FY 2020-216.9%
Q3 FY 2020-216.9%
Q2 FY 2020-216.9%
Q1 FY 2020-216.9%
Q4 FY 2019-207.6%
Q2 FY 2019–207.6%
Q1 FY 2019–207.7%
Q4 FY 2018-197.7%
Q3 FY 2018-197.7%
Q2 FY 2018-197.3%
Q1 FY 2018-197.3%

The government has also introduced several new features to the scheme over the years to make it more accessible to the public. For example, in 2019, the government announced that the KVP scheme can be purchased online through the India Post Payments Bank (IPPB) app. This has helped to increase the reach of the scheme and made it more convenient for people to invest.

Kisan Vikas Patra- Types of Accounts

On applying to the Accounts Office in Form-1, the following different types of accounts can be opened under the scheme- 

  • Single Holder Type Account– This is single person
  • Joint A-Type Account– For two adults, and at the time of maturity both will be eligible for maturity amount or whom ever is alive till maturity.
  • Joint B Type Account –  For two adults, and only one person can withdraw maturity amount or whom ever is alive till time of maturity.

Kisan Vikas Patra- How to Apply

If you want to apply for Kisan Vikas Patra, you need to follow below mentioned steps-

  • Step 1- Login to DOP Internet Banking
  • Step 2: Click on ‘Common Services’ > Service Request > ‘New Request’. 
  • Step 3: After that click on NSC account. Here you will get the link to open NSC account and KVP account to open KVP account.
  • Step 4: Enter the amount for which NSC is to be opened with a minimum of Rs 1000 and in multiples of 100.
  • Step 5: Select the PO savings account linked to the debit account. 
  • Step 6: Click on the ‘Submit Button’ to read the terms and conditions and accept the terms and conditions. 
  • Step 7: After that deposit the money online. 
  • Step 8: Enter transaction password and submit. 
  • Please login again to view the details of NSC opened through the account. 

Kisan Vikas Patra- Calculator

Time Period15 January 2000 to 28 February 20011 March 2001 to 28 February 20023 March 2002 to 28 February 2003After 1 March 2003
YearAmount Deposited
1NANANANA
2NANANANA
2 Years 6 Months₹ 1246₹ 1209₹ 1195₹ 1170.51
3 Years₹ 1302₹ 1274₹ 1256₹ 1207.95
3 Years 6 Months₹ 1407₹ 1327₹ 1305₹ 1267.19
4 Years₹ 1478₹ 1409₹ 1382₹ 1310.8
4 Years 6 Months₹ 1585₹ 1470₹ 1439₹ 1355.9
5 Years₹ 1668₹ 1572₹ 1534₹ 1435.63
5 Years 6 Months₹ 1779₹ 1644₹ 1602₹ 1488.49
6 Years₹ 1874₹ 1770₹ 1672₹ 1543.3
6 Years 6 Months₹ 2000₹ 1857₹ 1800₹ 1649.13
7 YearsNANA₹ 18831713.82
7 Years 3 MonthsNA₹ 2000NANA
7 Years 6 MonthsNANANA1781.06
7 Years 8 MonthsNANA₹ 2000NA
8 Years 7 MonthsNANANA₹ 2000
More Than 8 Years 7 Months NANANANA

Kisan Vikas Patra- Conditions for Transfer to Another person

Kisan Vikas Patra transfer can be done under following conditions.

  1. To the nominee/legal heir on the death of the account holder.
  2. On the death of the account holder(s) of the joint holder(s).
  3. On the orders of the court.
  4. On pledging the account with a gazette authority.

FAQ-Kisan Vikas Patra

Ques- What is new interest rate for Kisan Vikas Patra?

Ans- Interest rate for Kisan Vikas Patra have been increased from 7% to 7.2%.

Ques- What is Maturity period for Kisan Vikas Patra?

Ans- Maturity period for Kisan Vikas Patra is 124 Months.

Ques- What is Lock-in period for Kisan Vikas Patra?

Ans- Lock-in period for Kisan Vikas Patra is 2.6 Years.

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