HYDERABAD: India Post has been offering several savings schemes for different categories of people and Kisan Vikas Patra (KVP) is one of the prominent saving options offered by Postal Department through post offices (POs).
Kisan Vikas Patra offers an interest rate of 7.3 per cent, which will be compounded annually and promises to double the investment in 118 months (nine years and ten months). For people looking at long time savings with safety, buying KVP can be an apt option.
All the post offices across the country offer KVPs at a minimal amount of Rs 1,000. There is no maximum limit on the amount one can invest in KVPs but should be bought in the multiples of Rs 1,000.“KVPs are one of the popular savings instruments for the people looking at long-term horizon. With 7.3 per cent interest rate which gets compounded annually, the value of KVPs doubles in a span of 9 years and 10 months. As they are offered by post offices there is no fear of safety. But one misconception about KVP among some people is they are only for people from the farming community, which is not right. Any patient investor, with long-term goals, can buy KVPs and get benefitted,” PVS Reddy, Post Master General, Hyderabad.
KVP certificates can be bought by an adult for himself or on behalf of a minor or by two adults. While the maturity period of certificate is 118 months, it can also be encashed after two and half years from the date of issue, if needed.
Another advantage is, KVP certificates can be transferred from one person to another and from one post office to another, thus ensuring flexibility and liquidity for the investors. Facility of nomination is also available.
“KVPs are one of the popular savings instruments offered by post offices. Though the rate of interest on KVPs as of now is lesser than other post office savings schemes like Sukanya Samriddhi Accounts, National Savings Certificates, Senior Citizen Savings Scheme, still it can be regarded as safe and better option for people with long-term financial planning.
The ease of buying them and operating them and the option of transferring from one post office to other, makes it a good option for those in rural areas and not very tech savvy. However one needs to keep in mind that there aren’t any tax benefits from KVPs,” explained Subba Rao, Anupindi, financial adviser.