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Kisan Vikas Patra Basics

Details about who all can and how can one invest in to KVPs along with other benefits


28 Dec 2010

Kisan Vikas Patras (KVPs) - Discontinued w.e.f. December 1, 2011


Kisan Vikas Patras (KVPs) are available at all Head Post Offices and authorized post offices throughout India. The KVPs are measured as the most safe investment tool, as it has the backing of the Government of India. The principal is assured (guaranteed) and it is deemed to be a safe avenue for investing your money.


KVP is suitable for an increase in investment as it accumulates money at a fixed rate, and money doubles at the end of the specified period. It is for those looking for guaranteed returns.


Who Can Purchase

KVP can be purchased by an adult who is a resident in India. It can also be bought jointly or by an adult on behalf of a minor

Investment Amount

There is No investment limit on investment. Certificates are available in denominations of Rs.. 100/-, Rs.. 500/-, Rs.. 1000/-, Rs.. 5000/-, Rs.. 10,000/-, in all Post Offices and Rs.. 50,000/- in all Head Post Offices.

Maturity period

Money doubles in 8 years 7 months.

Interest Rate

8.40 per cent per annum compounded yearly.

Nomination facility

Nomination facility is available. The nomination can be made or changed any time during the investment tenure.


The certificates are transferable to any post office in India as well as can transfer one person to another but before maturity.


KVPs can be encashed at the Post Office of its issue. These can also be encashed at any other Post Office if the Officer-in-Charge of that Post Office is satisfied with the production of Identity Slip or on verification from the Post Office of issue that the person presenting the certificate for encashment, is entitled thereto.

Premature Encashment

A Certificate can be encashed after two years and six months and the interest paid will be as the rules announced by the Govt. Of India from time to time


Facility for premature encashment as per the table given below (for the KVP purchased on or after 1st March 2003).

Deduction u/s 80C

No Income Tax Exemption under section 80 C is available for KVP.

Interest Taxability

 Interest accrued on yearly basis will be taken as income for Income Tax purposes, but no TDS will be deductible.

Other features

Deposits are exempt from Wealth tax.

KVP can be pledged as security against a loan to Banks/Govt. Institutions.

KVPs can be purchased in Demat Form from select Post Offices.

On written request duplicate certificate can be issued in case of lost, stolen, destroyed, Mutilated or defaced certificate.

KVP can be purchased or reimbursed through power of attorney also.

The Govt. of Maharashtra has declared the KVP as a Public Security under the provision of Mumbai Public Trust Act. 1950.





Kisan Vikas Patra could be a better option in a low interest rate regime as it's safe and offers high returns with liquidity. But it's meant for only those who are not looking for regular income and are done away with their tax planning for the current year so far.



Extra points :


Kisan vikas patra (KVP) is a very good investment purpose plan which doubles your money in eight years and seven months. It can be encashed after two and half years with the condition of interest forfeited. The features of kisan vikas patra are as follows.



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