A small savings certificate scheme offered by India Post since 1988, Kisan Vikas Patra promises to double your lump sum investment over its full 9.5-month (115 month) tenure. While it was originally launched as a scheme for farmers, the long-term plan is now available to all Indian citizens 10 years and older.
Notably, for minors (post office account holders below 18 years of age), the account has to be opened by a parent or legal guardian and then transferred into a major account once majority is attained.
Today, we look at how investors can apply for the KVP scheme at their nearest post office branch:
How to apply for Kisan Vikas Patra at post office: Stepwise guide
- Visit your nearest post office to collect and fill Form A.
- Once filled, you can submit the completed Form A, along with required know-your-customer (KYC) documents including Aadhaar, PAN, and address proof.
- Deposit the investment amount through cash, cheque, demand draft, or pay order.
- After verification, the post office will issue a KVP certificate showing the investment amount and maturity details.
- You can also nominate a beneficiary at the time of opening the account to ensure smooth transfer of funds in case of untimely death of account holder.
- You can also download Form A from the official post office website here — https://www.indiapost.gov.in/banking-services/savings
Kisan Vikas Patra: Key highlights of the scheme
- The scheme has a minimum start investment of ₹1,000, with no upper cap and Aadhaar as proof of identity.
- However, since 2014, investments above ₹50,000 require PAN Card proof, while for deposits of ₹10 lakh and more investors must show income proof.
- Interest rate on KVP is 7.50% for the April-June 2026 quarter.
- The money doubles on maturity and interest earned is taxable.
- There is no deduction under Section 80C, but the account can be transferred to another user and can have up to three joint holders.
- Further, TDS is deducted at 10% every year on the Interest credited.
- Notably, Hindu Undivided Family (HUF) and Non-Resident Indians (NRIs) are not eligible to invest in KVP, as per a Clear Tax report.
- It added that you can use your KVP certificate as collateral or security to avail secured loans.
Can you close Kisan Vikas Patra prematurely?
According to the official website, the account may be closed prematurely at any time before maturity under the following circumstances:
- Death of account holder of a single account, or any or all the account holders in a joint account
- Forfeiture by a pledgee, being a Gazetted officer
- When ordered by court
In case of premature closure of account, the account holder or nominee will receive the principal amount along with simple interest calculated at the rate applicable from time to time to Post Office Savings Account for the complete months for which the account has been held.
Also, for accounts closed any time after two years and six months from the date of opening, the amount, inclusive of interest shall be payable.
In the event of death of the depositor of a single account or of all the depositors in a joint account, the deposit shall be payable to the nominee if a nomination exists or to the legal heir(s).
Who should consider investment in the Kisan Vikas Patra?
- As per the Clear Tax report, the scheme is a good choice for risk-averse investors looking to park surplus money they do not immediately require.
- Based on risk profile and goals, it added that investors seeking tax-saving schemes are better off investing in the Public Provident Fund (PPF), National Saving Certificates (NSCs) and tax saving bank fixed deposit (FD) schemes.
- Those open to even more risk can also consider Equity Linked Savings Scheme (ELSS), it added, advising investors to “play to your financial strengths”.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.