Kisan Vikas Patra Interest Rate: All You Need to Know

7 min read • Published 30 October 2022
Written by Piyush Mohta
KVP interest rate

Kisan Vikas Patra (KVP) is a savings scheme launched by India Post in 1988. It was initially introduced for Indian farmers, however it was discontinued in 2011 due to the fear of being used for money laundering. The scheme was relaunched in 2014 with curbs to prevent mishaps. However, its renewed form was not just meant for farmers. Currently, anyone can invest in the scheme irrespective of their profession. 

To fulfil its objective of encouraging long-term financial discipline in people, KVP provides fixed returns at low risk. It has the potential to double a one-time investment in a period of approximately 10 years & 3 months (123 months). You can purchase a Kisan Vikas Patra online through any of the 1.5 lakh post offices in the country. Alternatively, you can also visit eligible banks, such as PNB, SBI, etc., to invest in the KVP Scheme.

Continue reading if you want to know more about Kisan Vikas Patra interest rates, the scheme features etc.

KVP Interest Rate

Interest rates on KVP investments, which are not subject to market risks, are regulated by the Ministry of Finance. The government reviews the interest rate every quarter and tweaks it frequently. However, once you invest in the scheme, the same interest rate will apply to you for the whole term. The present KVP interest rate is 7.0%, compounded annually.

The interest rate also impacts the tenure of the KVP, as the latter is determined per the time taken with the prevailing interest rate to double your investment. For example, as per the present interest rate of 7.0% per annum, for Rs. 5000 will get you a corpus of Rs. 10,000 after 10 years and 3 months.

Here is the KVP interest rate chart detailing the last ten years’ interest data in chronological order: 

PeriodKVP Interest RateTenure
01-Oct-2022 to Today7.0%123 months
01-Apr-2020 to 31-Sep-20226.9%124 months
01-Jul-2019 to 31-Mar-20207.6%113 months
01-Oct-2018 to 30-Jun-20197.7%112 months
01-Jan-2018 to 30-Sep-20187.3%118 months
01-Jul-2017 to 31-Dec-20177.5%115 months
01-Apr-2017 to 30-Jun-20177.6%113 months
01-Oct-2016 to 31-Mar-20177.7%112 months
01-Apr-2016 to 30-Sep-20167.8%110 months
23-Sep-2014 to 31-03-20168.7%100 months

Features of KVP

Here are some of the features of the KVP:

  • Eligibility: Any Indian resident aged 18 years or above can purchase a KVP certificate individually or jointly with an eligible person. An adult can also invest on behalf of a minor. People of Hindu Undivided Families and Non-Resident people are not eligible to invest in the same.
  • Interest Rate: The interest rate on KVP is reviewed and updated periodically. The current Kisan Vikas Patra rate of interest is 7.0%, compounded annually. 
  • Premature Withdrawal: You can withdraw prematurely once the lock-in period is over, which is 2 years and 6 months after investing. Encashing the scheme early is not allowed, unless in the case of account holder’s demise or a court order.
  • Minimum and Maximum Investment: You can invest a minimum of Rs. 1000 without any upper limit. Investments in denominations of Rs. 50,000 are available only at the head post office of a city.
  • Nominee: You can appoint a nominee who will receive the maturity amount in case of your untimely death.
  • Transfer: A KVP certificate can be transferred from one post office to another and from person to person.
  • Collateral: You can use your KVPs as collateral to obtain a bank loan.

How to Apply for KVP?

  • You can obtain the application form by visiting the nearest post office or bank branch or downloading it from the official website of India Post.
  • You must fill out this form and attach the relevant KYC documents for ID and address proof.
  • Visit the nearest post office/ authorised bank and submit the Kisan Vikas Patra form and your contribution to the scheme in the form of a Cheque/Demand Draft/Cash/Pay Order. 
  • The post office will then scrutinise the form, and if the payment for the purchase of KVP is in cash, the certificate will be issued immediately.
  • In case a certificate isn’t given, you will receive a provisional receipt, which can be exchanged for the certificate later. 
  • You can also opt to receive your certificate on your registered email ID. There is no limit to your number of Kisan Vikas Patra accounts. 

There is no provision to obtain a Kisan Vikas Patra online without visiting the post office. However, you can reduce the time spent waiting in long queues by downloading the form and visiting the post office after filling it out. 

Here are the documents you need to share along with the KVP application form:

  • Proof of identity such as PAN/driving licence/Aadhar/passport.
  • Proof of address such as PAN/driving licence/Aadhar/passport/rental agreement/electricity bill.
  • 2 passport-size photographs. 
  • In case the account is on behalf of a minor – then their proof of age would be required.
  • If the investment amount is more than Rs. 50000, you must carry your PAN.
  • If the investment amount is more than Rs. 10 lakhs, you will have to take payslips and ITR for the same.

Final Thoughts

The Kisan Vikas Patra is a scheme encouraging long-term investments for a fixed return. Its risk-free nature makes it an ideal choice for people who don’t like taking chances with their investments. It is accessible from even the remotest parts of the country, where there are no bank branches.

However, you must be comfortable with the Kisan Vikas Patra interest rate being lower than the interest rate offered by other instruments. Only if you are reasonably sure that you can afford to lock in your funds for an extended period with shallow risk should you invest in a Kisan Vikas Patra.

FAQs about Kisan Vikas Patra Interest Rate

How can I apply for a duplicate Kisan Vikas Patra certificate?

You can apply for a duplicate certificate at any post office branch, not necessarily the one from which you bought the original one. You will have to submit a form NC-29 along with the below documents:
> Valid ID proof
> Valid residence proof
> FIR copy for the loss of the original KVP certificate
> Identity slip shared at the time of issue of the certificate

How much minimum and maximum amounts can I invest in a KVP?

The minimum amount is Rs. 1000, and there is no maximum upper limit.

Is investment in Kisan Vikas Patra exempted from taxation under section 80 C of the IT Act?

The income invested in KVP is not exempt from taxes under section 80 C of the Income Tax Act. The interest income is taxable, though no TDS is deducted by the bank/post office. The withdrawal amount is entirely exempt from any taxation.

To whom do I address the Kisan Vikas Patra online form?

You have to address the KVP online form to the postmaster of the post office branch from which you want to buy the KVP.

Under what circumstances does my KVP account get transferred?

Your KVP account can be transferred to someone eligible to purchase a KVP in the following situations:
> In the event of your demise, the KVP gets transferred to your legal heir or the nominee for your account.
> In case the court directs such a transfer.
> On the death of account holder to joint holder(s)
> In the event of the account being pledged to the specified authority.

What will happen if I do not encash the certificate at maturity?

In case you do not choose to withdraw your funds at maturity, you continue to receive an interest equal to the interest rate applicable on the post office savings account. However, if you withdraw within one month of maturity, you do not receive this interest.

What are the different kinds of Kisan Vikas Patra certificates I can buy?

There are three main categories of KVP certificates:

1. Single Holder Certificate:
This certificate is given to a single individual, either for themselves or on behalf of a minor.
2. Joint A Certificate:
This certificate is offered to two adults; the proceeds are paid either to both or the one who survives at maturity.
3. Joint B Certificate:
This certificate is issued to two adults, with the proceeds paid to one of them or to the one who survives. 

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Piyush Mohta

Credit Principal
CA with 10+ years of experience in Banking in SME and wholesale/start-up lending. Previously worked with UC inclusive, TATA capital, Kotak Bank. Underwritten/Managed loan book of 2500 Cr+

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