The Kisan Vikas Patra or KVP was first introduced by India Post in the year 1988. Kisan Vikas Patra is a saving certificate scheme wherein the amount that is initially invested, doubles in 100 months i.e. 8 years, 4 months. Although it proved to be a success in its early months, it was closed in the year 2011 after a Government of India appointed committee gave the recommendation that the Kisan Vikas Patra scheme could be misused. When the new government was formed in the year 2014, it decided to relaunch this scheme.
A Kisan Vikas Patra certificate can be purchased by an adult for themselves or on the behalf of a minor, a Trust or two adults can jointly purchase this savings certificate. There is no maximum upper limit set for the purchase of a Kisan Vikas Patra savings certificate, the minimum limit however is Rs. 1000. The Kisan Vikas Patra also has the facility of nomination. You can purchase a this savings certificate from any Departmental Post Office. The certificate can be encashed prematurely after the lock in period of 2 and a half years from the date it was initially issued.
Loan against Kisan Vikas Patra Scheme
Large companies, business groups or other institutions cannot invest in the Kisan Vikas Patra scheme. NRI citizens and Hindu Undivided families cannot invest in this scheme as well. Apart from not qualifying for the Wealth Tax Liability at maturity, the investor also gets full returns on his investment. This is because the interest accrued on the Kisan Vikas Patra income, although taxable, is deducted at source and not at the time of disbursal.
The kisan Vikas Patra scheme does not fetch you rebates under Section 80C, however, it acts as a great collateral against which you can take a loan from banks and other financial institutions.
If you are a Kisan Vikas Patra certificate holder and are looking for a loan, the below details will help you in the process:
Eligibility for Loan - The applicant must have the Kisan Vikas Patra certificate in their own name. You will not be eligible for a loan on someone else savings scheme.
Purpose - The loan on your Kisan Vikas Patra investment can be availed for any personal or business purposes.
Interest Rates and Charges - The kisan vikas patra interest rates and charges keep varying from time to time. Most banks charge a processing fee against the loan and different banks come with different charges as well.
Loan Amounts - Usually, the loan amount depends on the number of years completed from the time the Kisan Vikas Patra was issued. However, these days, it also depends on the rules and policies of the bank where you will be applying.
Repayment Tenure - The loan is required to be liquidated within the savings period or earlier.
Unlike other investments, the Kisan Vikas Patra comes with the benefit of being transferred with ease among various people and various post offices in the country with minimal formalities completed. The process is extremely easy to make a duplicate Kisan Vikas Patra certificate in case you misplace or lose the one you already have. Sometimes it may get accidentally destroyed, defaced or even mutilated because of the long period of time, in this case also, it is very easy to get a duplicate copy of the same.
The Kisan Vikas Patra schemes are Government of India approved and guarantee full return on the investment made. Hence, this savings scheme is the best option for investors who don’t want to take any risks whatsoever. The returns on this savings scheme is much lesser than that of a PPF or an NSC but way higher than the returns on a Fixed Deposit.
The Kisan Vikas Patra savings scheme assures guaranteed returns. If you wish to convert the savings scheme to cash before the date of maturity of the scheme, you can do that easily after completion of the lock in period of two and half years.