A good news for all the investors who does not want to take lots of risks but want to see their money grow by two fold over time. They can invest in this small savings scheme called Kisan Vikas Patra (KVP), which is backed by the government and governed by the Department of Posts under the direction of the Ministry of Communications. There are nine small savings plans available from the Department of Posts, each with unique features and advantages. Because KVP is a guaranteed-to-double investment product with a 124-month maturity time, investors with long-term financial goals but lack market awareness can use it to produce risk-free long-term gains.
Calculate Kisan Vikas Patra
The Ministry of Finance kept the same interest rates available for the quarter ending September 2022. KVP will thus provide a 6.9% yearly compound interest rate. Investors should be aware, nevertheless, that the government modifies the interest rates of Post Office Small Savings Accounts on a quarterly basis. A minimum investment of Rs. 1000 and deposits in multiples of Rs. 100 with no maximum limit are required to invest in KVP for a period of 124 months (10 years and 4 months). Therefore, if you stay invested for the entire duration without taking any withdrawals, your money will double thanks to the compounding effect. Therefore, if you invest Rs. 5 lakhs at a 6.9% interest rate, you would receive Rs. 10 lakhs at maturity, which will include the total interest earned of Rs. 5 lakhs. The investment return would be ₹1 Cr if an investor invested ₹50 lakh in KVP over the duration of 124 months.
Features of Kisan Vikas Patra
A single adult, a joint account (up to 3 adults), a guardian on behalf of a minor or a person of unsound mind, a minor under 10 years old in his own name, and any number of accounts can be established under the plan are all eligible for opening Kisan Vikas Patra (KVP) accounts. Tax-savers should be aware that this plan offers no tax benefits, and the earned interest is subject to taxation as “income from other sources.”
Premature withdrawals from a Kisan Vikas Patra (KVP) account are permitted in the following circumstances: in the event of the account holder’s death; upon forfeiture by a pledge who is a Gazette official; upon court order; or after two years and six months have passed from the date of deposit. In the situations mentioned above, a Kisan Vikas Patra (KVP) account can also be transferred from one individual to another.
