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KVP Kisan Vikas Patra: A Comprehensive Guide to Investment

Team AckoMay 23, 2024

Kisan Vikas Patra (KVP) is a government-issued savings plan designed specifically for farmers and those with modest incomes in India. This scheme has been active since 1988 and underwent revisions in 2014 to enhance its appeal to investors.

Whether you are a new investor or someone looking to diversify your investment portfolio, KVP Kisan Vikas Patra offers an attractive avenue for long-term savings. So, let's explore the world of KVP Kisan Vikas Patra and uncover its potential.





What is the Kisan Vikas Patra scheme?

Kisan Vikas Patra is a savings certificate scheme introduced by India Post in 1988. Its main goal is to promote long-term financial discipline among individuals. Its duration has been updated to 115 months (9 years and 5 months).

The investment amount is Rs.1,000, with no maximum limit. If you invest a lump sum today, you will receive double the amount at the end of the 115th month. Initially designed for farmers to encourage long-term savings, it is now available to everyone.

In 2014, the government made it mandatory to provide a PAN card for investments above Rs.50,000 to prevent potential money laundering. For deposits of Rs.10 lakh and above, income proofs such as salary slips, bank statements, and ITR documents are required.

Kisan Vikas Patra offers a low-risk savings platform where you can securely invest your money for a specific period. Additionally, it is compulsory to provide the Aadhaar number as proof of the account holder's identity.

How does KVP Kisan Vikas Patra work?

To invest in KVP Kisan Vikas Patra, an individual needs to purchase a certificate from the post office. The certificate has a fixed maturity period, typically 9 years and 5 months. The interest rate for KVP Kisan Vikas Patra is set by the government and is subject to change from time to time. The interest is compounded annually and reinvested with the principal amount, allowing your investment to grow steadily over time.

Types of Kisan Vikas Patra Certificates

The different types of Kisan Vikas Patra accounts available for investors are as follows:

  • Joint A Type: Within this category, a KVP certificate is issued in the names of two grown-ups. If the account matures, both holders will receive the payment. If one holder passes away, only the other will be eligible to receive the payment. 

  • Joint B Type: In this type of account, a KVP certificate is issued under the names of two adults. Unlike Joint A accounts, the payment will be made to the surviving holder or one of the two holders upon maturity.

  • Single Holder Type: An adult is allocated a KVP certificate in this category. An adult can also acquire a certificate on behalf of a minor, which will be issued in the minor's name.

Features of KVP Kisan Vikas Patra

Here are the features of Kisan Vikas Patra.

  • Security: KVP Kisan Vikas Patra is a secure investment option as it is backed by the government of India. The scheme offers a guaranteed return on investment, providing investors with peace of mind.

  • Fixed Maturity Period: The maturity period for KVP Kisan Vikas Patra is fixed at 9 years and 5 months. This long-term investment tenure allows individuals to grow their savings and achieve their financial goals.

  • No Maximum Limit: Unlike some other investment options, KVP Kisan Vikas Patra does not have a maximum investment limit. This makes it an attractive choice for individuals looking to invest large sums of money.

  • Transferability: KVP Kisan Vikas Patra certificates can be easily transferred from one person to another, allowing individuals to gift or transfer their investment to their loved ones.

Advantages of investing in KVP Kisan Vikas Patra

Investing in KVP Kisan Vikas Patra offers several advantages that make it a popular choice among investors. Let's explore some of these advantages.

  • Guaranteed Returns: KVP Kisan Vikas Patra provides investors with guaranteed returns, making it a reliable investment option.

  • Long-Term Savings: With a fixed maturity period of 9 years and 5 months, KVP Kisan Vikas Patra encourages individuals to save for the long term and build a substantial corpus over time.

  • Tax Benefits: The interest earned on KVP Kisan Vikas Patra is taxable, but there is no tax deducted at source (TDS) on the interest. This allows investors to have better control over their tax liabilities.

  • Flexibility: KVP Kisan Vikas Patra certificates can be transferred from one person to another, providing flexibility and ease of ownership.

  • Low Risk: As a government-backed scheme, KVP Kisan Vikas Patra carries a low risk, ensuring the safety of your investment.

Eligibility Criteria for KVP

If you are wondering who can invest in Kisan Vikas Patra, check out the eligibility criteria below:

  • The individual must be a citizen of India. 

  • The individual must be at least 18 years old. 

  • A legal guardian can submit an application on behalf of a minor or an incapacitated individual. 

  • Hindu Joint Family (HUF) and NRIs are not permitted to invest in KVP.

Who should Invest in KVP?

Any citizen of India over 18 years old can purchase a Kisan Vikas Patra from the closest post office. Those living in rural areas of India without a bank account often find this to be a very attractive opportunity. 

Acquiring a KVP for a minor or jointly with another adult is also possible. Remember to include the minor's date of birth and the name of their parent or guardian. A Trust can also purchase one, but not a Hindu Undivided Family (HUF) or a Non-Resident Indian (NRI). 

KVP is a wise choice for individuals who are cautious about taking risks and have extra money that they may not need in the near future. Your decision will ultimately depend on your risk tolerance and objectives. 

Document Required for KVP

You will have to submit the following documents to invest in this scheme:

  • Form A

  • Form A1 if you are submitting an application through an agent

  • KYC documents

You will receive your KVP certificate after submitting all the documents. If you lose this certificate or it gets damaged somehow, you can get a duplicate copy from the post office where you got it initially. 

How to Invest in KVP Kisan Vikas Patra

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

Visit your nearest post office that offers KVP Kisan Vikas Patra.

Fill out the application form for KVP Kisan Vikas Patra and submit the required documents, including identity proof and address proof.

Deposit the desired amount for investment and purchase the KVP Kisan Vikas Patra certificate.

Keep the certificate in a safe place as it will be required at the time of maturity or if you decide to transfer the ownership.

How to Invest in KVP Online

The steps to invest in Kisan Vikas Patra online are as follows:

  • Access your online banking account through the Department of Posts website. 

  • Navigate to the “New Requests” tab under “Service Requests” located in the “General Services” category. 

  • Select the option to open a KVP Account. 

  • Enter the required minimum deposit for the KVP account and choose the debit account linked to your PO Savings account. 

  • Review and accept the terms and conditions and submit your application. 

  • Input your transaction password and finalize the process by clicking the “Submit” button to view or download your deposit receipt.

Transferring Your Kisan Vikas Patra Account

You can transfer your KVP account from one post office to another. You will have to submit a handwritten consent letter to the officer at the post office from where you originally bought it. You will be able to transfer the account only if you are an Indian and qualify under the criteria to purchase a KVP certificate. 

You can also transfer your KVP account from one individual to another. You need to submit a written letter to the Post Office for the same. The transfer of ownership of a KVP certificate is possible in the following ways:

  • From a deceased person to their heir

  • From one owner to joint owners

  • From joint owners to one individual

  • From the owner to a judge or other individuals according to legal orders

KVP Calculator

You can use an online Kisan Vikas Patra scheme calculator to determine the maturity amount after a certain period of time from the issuance date. Enter the deposit amount and your investment date to get the details. Remember that the Kisan Vikas Patra interest rate 2023 -2024 is 7.5% per annum. 

Kisan Vikas Patra Income Tax Benefits

Unfortunately, there is no Kisan Vikas Patra tax benefit. Interest is available on a yearly basis and is categorized as "Income from Other Sources." A TDS of 10% is applicable to the interest. But no tax is deducted from the Kisan Vikas Patra maturity amount. 

Withdrawal Rules Under Kisan Vikas Patra

Investors have the flexibility to retrieve their funds from the scheme at any point. However, it is important to note that certain limitations exist: 

  • No interest will be accrued on premature withdrawals occurring within the first twelve months. Investors will also have to bear charges for premature withdrawals within a year.

  • A reduced interest rate will be applied to withdrawals made between one to two and a half years. 

  • Premature withdrawals will not incur penalties beyond two and a half years, although they will still be subject to the prevailing interest rate.

Wrapping up

KVP Kisan Vikas Patra is an excellent investment scheme for individuals looking to save money and generate long-term wealth. With its guaranteed returns, flexible investment options, and low risk, KVP Kisan Vikas Patra offers a compelling avenue for individuals to grow their savings.

By investing in KVP Kisan Vikas Patra, you can take a step towards securing your financial future and achieving your goals. So, visit your nearest post office today and start your journey towards financial prosperity with KVP Kisan Vikas Patra.

Frequently Asked Questions

Here are some common questions about KVP.


What is the minimum investment amount for KVP Kisan Vikas Patra?

The minimum investment amount for KVP Kisan Vikas Patra is Rs. 1,000.

Is there any maximum investment limit for KVP Kisan Vikas Patra?

No, there is no maximum investment limit for KVP Kisan Vikas Patra. Investors can invest any amount they desire.

Can I prematurely withdraw my investment from KVP Kisan Vikas Patra?

Yes, premature withdrawal is allowed after completing 2.5 years from the date of investment. However, there will be certain deductions and penalties levied on premature withdrawals.

Can I avail a loan against KVP Kisan Vikas Patra?

Yes, you can avail a loan against KVP Kisan Vikas Patra certificates. The loan amount will depend on the prevailing rules and regulations set by the post office.

Is the interest earned on KVP Kisan Vikas Patra taxable?

Yes, the interest earned on KVP Kisan Vikas Patra is taxable. It is important to include the interest income in your annual tax return.

Can I transfer my KVP Kisan Vikas Patra certificate to someone else?

Yes, KVP Kisan Vikas Patra certificates can be easily transferred from one person to another. The transfer process can be initiated at the post office where the certificate was issued.

Where can I encash my Kisan Vikas Patra certificate?

You can encash the KVP amount at the post office or bank where it was originally obtained. Alternatively, it may be redeemed at a different post office or bank as long as the issuing entity approves the verification process from both the original location and the individual possessing the certificate.

Can I add a nominee to my KVP certificate?

KVP investors have the option to nominate individuals when making their purchase by filling out Form C either individually or jointly. The benefits will be passed on to the nominee in the unfortunate event of the sole or joint holder passing away. If a nomination was not made during the initial purchase, it can still be done after acquiring the certificate but before it reaches maturity. A completed Form C must be submitted to the individual who registered the certificate at the post office.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.


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