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Taking the right call in the selection of an investment scheme is not an easy thing to do. While the market is flooded with investment options, most of the schemes come with a certain risk involved. So, the decision-making process becomes difficult and confusing for buyers. If you are someone who is looking for a long term investment option with minimum risk- the Kisan Vikas Patra (KVP) scheme might be an option, you would want to look at. The scheme offered by India Post and several other banks double the investment in its maturity period of 124 months (10 years 4 months). While the scheme was originally introduced by India post in 1988, it was discontinued after the recommendation of the government committee in 2011. The committee had suggested that the scheme could be used for money laundering. However, the KVP was again introduced with several changes including mandatory PAN card verification for any investment over Rs 50,000 and income source certificate for investments of over Rs 10 lakhs. Since the scheme is backed by the government, it offers reliability about the safety of invested amount.
Eligibility and Interest Rate
The scheme comes with a compounding interest rate of 6.9 per cent and any Indian resident adult can open a personal or joint account (maximum 3 adults) under this scheme. Further, any minor over 10 years of age or any guardian on behalf of the minor or on behalf of a person with an unsound mind can also open an account in this scheme with a minimum deposit of Rs 1000. An individual may open any number of accounts under the scheme and there’s no capping on investment under this scheme.
Pledging or transfer of KVP
KVP may be pledged or transferred as security by submitting a request with the concerned post office supported with an acceptance letter from the pledgee. The transfer of KVP can be made to the following authorities
– The president of India or Governor of state
– Banks
– Public or private corporation
– Housing finance company
Account Transfer
Account under KVP may be transferred from one person to another in special conditions that include
– On account holder’s death it may be transferred to the nominee or legal heir
– In case of death of joint account holder, the count may be transferred to the other account holders
– On Order by the court
– By pledging to the specified authorities
Premature Withdrawal
KVP come with a lock-in period of 30 months and account holders can withdraw their money from their account in blocks of six months. In case of premature withdrawal, the account holder will get the principal sum with interest for the period of the account.
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