Kisan Vikas Patra Premature Withdrawal
Kisan Vikas Patra (KVP), introduced by India Post in 1988, is a savings scheme where your investment doubles in 100 months (8 years, 4 months). While you can withdraw your KVP certificate at any time, premature withdrawals are subject to penalties depending on when it is cashed out. The scheme is designed for long-term saving with a guaranteed return.
Premature Withdrawal of KVP:
- KVP can be encashed prematurely only after a lock-in period of 2 years and 6 months from the date of issue.
- If the KVP holder wishes to withdraw before maturity, they can do so by giving a written request to the Post Office where the certificate was issued.
Conditions for Premature Encashment:
- If the certificate is prematurely encashed, the holder will receive the principal amount along with interest, but the interest rate will be lower than the full rate.
- KVP can also be prematurely withdrawn in certain situations like:
- Court Orders: If ordered by a court of law.
- Forfeiture: If the certificate is pledged and forfeited by a Gazetted Officer.
- Death: If the KVP holder, or any of the holders in the case of joint KVPs, passes away.
Encashment Procedure
- To encash the KVP, the holder must go to the Post Office where the certificate was originally issued.
- If the KVP holder is unable to go to the issuing Post Office, certain formalities will be required.
- The holder must carry the identity slip provided at the time of purchase.
- A written letter of request must be submitted to the Post Office for encashment.
In summary, KVP offers a simple investment scheme with a guaranteed return that doubles your money in 100 months. Though you can encash it early, the process is subject to certain conditions, and premature withdrawals will be subject to penalties and reduced interest rates.
FAQs on KVP Premature Withdrawal
- What is the Kisan Vikas Patra?
Kisan Vikas Patra is a saving schemes introduced by the India Post where you can purchase a saving certificate that will yield you double the amount invested after the maturity period of 100 months (8 years, 4 months). You can purchase it as an adult for yourself or on the behalf of a minor, if you are part of a Trust, you can purchase it as a Trust or you can purchase it combined with another adult as a joint owner. You can also encash the KVP certificate prematurely for the principal amount and some part of the interest.
- Where can I encash my KVP certificate?
You can encash your KVP certificate at the Post Office where the certificate was initially purchased/ issued.
- When I prematurely encash my KVP certificate, will I receive an interest on the certificate or only the principal amount?
When you encash your KVP certificate, you will receive the entire principal amount invested along with an interest but the interest you receive will be less than the full rate that you would have normally earned after the maturity of the certificate.
- If I cannot encash my KVP certificate at the Post Office where it was issued, how do I encash it?
If under any circumstance you are unable to encash the KVP certificate at the issuing Post Office, you will need to complete certain formalities to do so and you will need to carry your identity slip for the encashment.
- When am I eligible to encash my KVP certificate?
You can encash your KVP certificate after the lock in period of 2 and a half years or 30 months.
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