Kisan Vikas Patra Account
Kisan Vikas Patra (KVP) is a savings scheme offered by the Government of India. It is a safe and secure investment option for those looking to earn a fixed return on their savings. One of the attractive features of KVP is that an investment of Rs. 1 lakh can earn Rs. 2 lakh at the end of the lock-in period of two and a half years.
The interest rate on KVP is currently fixed at 6.9% per annum, and the interest is compounded annually. This means that the investment amount will double in approximately 10 years and four months. However, it’s essential to consider the impact of inflation, which can reduce the effective rate of return over the long term.
KVP can be purchased from post offices or banks and has a minimum investment amount of Rs. 1,000. The scheme is open to individuals, joint accounts, and minors. The investment can be made in multiples of Rs. 1,000 and has no upper limit.
The investment in KVP is also eligible for tax benefits under Section 80C of the Income Tax Act, up to a limit of Rs. 1.5 lakh. However, the interest earned on the investment is taxable as per the individual’s tax slab.
KVP is a suitable investment option for those who have a low-risk appetite and are looking for a secure investment option. It’s also an excellent option for those who don’t have access to internet banking facilities and prefer to invest in a traditional way.
However, it’s important to note that KVP doesn’t offer the flexibility and liquidity of other investment options such as mutual funds or stocks. The investment is locked in for a period of two and a half years, and premature withdrawals are subject to certain conditions and penalties.
In conclusion, Kisan Vikas Patra is a safe and secure investment option for those looking to earn a fixed return on their savings. While an investment of Rs. 1 lakh can earn Rs. 2 lakh at the end of the lock-in period, it’s important to consider the impact of inflation and explore other investment options for higher returns and better inflation-adjusted returns over the long term.
Let’s Check Shortly…
-> Investors who aim to double their money can opt for this scheme.
-> Both individual and joint accounts can be opened in Kisan Vikas Patra.
-> 3 adults can open joint account.
-> Anyone can open account irrespective of age limit.
-> Parents can open accounts for children below 10 years of age. Those who have completed 10 years of age can also open an account in their own name.
-> Can make unlimited investment from Rs.1,000 onwards. The investment should be raised in multiples of Rs.
-> The interest rate of Kisan Vikas Patra has been revised from 1st April 2023.
-> Interest rate is 7.50 percent. At this rate of interest, the investment will double in 115 months (9 years and 7 months).
-> Account can be closed on death of account holder in Sing. In a joint account, the account can be terminated on the death of one or all members.
-> A person who invests Rs.5 lakh will get Rs.10 lakh in 115 months.
-> 5 lakhs can be earned as interest. A person who invests Rs 50 lakh can earn Rs 1 crore.