What are the Kisan Vikas Patra Maturity rules? What are KVP rules? Kisan Vikas Patra or KVP was introduced by India Post in 1988 as a small savings certification scheme. Its main purpose is to promote long-term financial discipline for the people. Originally, it was intended to give farmers a chance for long-term savings, hence the name.
Kisan Vikas Patra is now available to every Indian resident and is a low-risk savings scheme, where an investor can safely invest his money for a certain period. The maturity period for KVP is ten years and four months i.e. 124 months.
The scheme was discontinued in 2011 after being used for money laundering purposes. The KVP was re-launched in 2014 with amendments to prevent misuse.
To prevent the misuse of the scheme government makes the PAN Card proof compulsory to invest more than Rs. 50,000. One must submit income proof (salary receipts, bank statement, ITR document, etc.) for depositing Rs. 10 lakh and above in this scheme.
Kisan Vikas Patra Maturity Rules
Kisan Vikas Patra’s maturity period is 124 months i.e. ten years and four months. Thus, the invested amount in the Kisan Vikas Patra scheme matured in ten years and four months. The central government recently reviewed the maturity date of the KVP scheme.
The maturity period of the scheme was revised in September 2017. Previously, the maturity period of the KVP scheme was 118 months i.e. 9 years and 10 months. The government revised the scheme and made several changes to the program.
Govt. revised the Kisan Vikas Patra maturity rules, and the maturity period is now 124 months. The interest rate is 6.9 percent per year from April 2020. The KVP plan can double your investment amount in ten years and four months. At maturity, you can enchase the certificate at the post office where you purchased it.
Lock-in Period
The Lock-in period for the KVP scheme is at least 30 months i.e. two and a half years. Certificate holder of KVP scheme if decides to withdraw the invested money in the scheme after two and a half years after purchasing the certificate, no penalty will be imposed. Interest generated on the invested money will also be paid to the investor.
If the investor of the scheme withdraws his funds before two and a half years this may result in a penalty or reduction in interest. In case the investor withdraws his money within a year of purchase, he will be penalized and will not receive any interest. If the scheme holder withdraws money after a year, but before two and a half years, there is no penalty, but the interest he receives will be reduced.
Both the interest rate and maturity may differ depending on the prevailing market interest rates.
The Facility of Loan against Kisan Vikas Patra
Kisan Vikas Patra scheme subscribers are entitled to receive lower interest rate loans by using KVP certificates as security or collateral. This means that anyone who has a KVP certificate in their name can apply for a loan. KVP certificate is accepted by every bank as a security or collateral provided that the name on the KVP certificate is the same as the name of the applicant.
Loans will be provided for personal and commercial purposes only, such as business expansion or child marriage. Most banks do not consider speculative purposes as justified reasons for lending.
The amount of loan an applicant can receive against KVP depends on various factors such as the size of the KVP investment and the age of the certificate. The minimum amount of loan varies from one bank to another bank.
For example, the minimum loan that can be obtained from Allahabad Bank against KVP is Rs 10,000. While the minimum loan amount that Baroda Bank offers to the KVP certificate is Rs 3,000.
Some banks also have restrictions on lending to KVP certificate holders. The margin is usually determined by the amount invested in the KVP scheme.
Also Read: Indian Post Office NSC Scheme
Interest on the Loan
Loan interest rates given against the KVP certificate are slightly lower than normal bank loan interest rates. But, these interest rates vary from bank to bank. For different ages of KVP certificates, the banks can also offer different interest rates.
Several banks have variable interest rates on KVP loans. In the event of a change in interest rates, the borrower will be notified. Several banks charge processing fees for loans under KVP certificates.
The loan must be repaid before the KVP maturity. This means that it does not matter when you take out the loan, the loan amount must be paid before the maturity of KVP.
Kisan Vikas Patra Rules and Instructions
For those who seek or possess a KVP certificate, the following rules and guidelines must be followed:
Application
KVP certificate cannot be purchased online. The certificate application form is available online. This form is known as Form A download the form and fills in the information. You can submit the completed Form A to the nearest post office near you or any other post office or you can also submit the form in one of the banks offering the KVP scheme. You can request Form A from the post office or bank designated for KVP.
Certificate
After you submit Form A and make the payment, you will receive a KVP certificate. The KVP is governed by the regulations according to the Government Savings Certificate Act of 1959. The yield promised to you at the time of maturity is an indication of the Govt. guarantee for KVP. You have to save it and take care of it and produce it at the time of maturity.
Account Types
Three types of accounts can be opened under the KVP scheme. The first account type is the “single holder” type, where the certificate is issued in the name of an adult or in a minor’s name.
The second type of account is “Joint A” where two adults can jointly acquire a certificate on their names. After the maturity of the certificate, both account holders will receive money or the one which survives.
The third type of account is “Joint type B” KVP certificate is issued in the name of two adults. But in this case, either of the two is eligible to get the money or the one who will survive.
Investments
Rs. 1,000 is the minimum amount by which you can buy a KVP certificate. There is no upper limit for investment in the KVP scheme. It must be a multiple of Rs. 1,000. Certificates are issued in the value of 1,000, 5,000, 10,000 and 50,000. All investments above Rs. 50,000 require the investor’s PAN details.
Nomination
Investors can nominate a family member, friend, or any other person as a nominee for his certificate. The nominee will become a certificate holder in the event of the death of the main certificate holder. The nominee will receive all the money upon the maturity of the certificate.
Maturity
Kisan Vikas Patra Maturity period is 124 months i.e. ten years and four months. After this period the certificate becomes fully matured and you can claim your matured funds.
KVP Withdrawal Rules
You can withdraw your invested amount at maturity. You can also withdraw your amount before maturity. If you withdraw funds within one year of purchasing the KVP certificate, you will not receive interest and will be penalized.
In case you withdraw after one year, but before 30 months (two and a half years) after purchasing the certificate, there is no penalty, but the interest you receive will be reduced.
No charges or penalties will be imposed if you withdraw after two and a half years from the purchase of the KVP certificate. You receive interest.
Certificate Encashment
KVP certificate can be enchased from the post office or branch of the bank where you purchased the certificate. However, in the event of an emergency, you can also encash it at any other post office or branch with the consent of the post office administrator or branch manager.
Loss of Certificate
In the event of loss, damage, wear and tear of the KVP certificate the holder of the certificate can apply for a duplicate copy. The holder must know the certificate number and maturity date prior to applying for a duplicate copy.
Applications can be submitted at the branch where the KVP was purchased. Duplicate application form can be downloaded from indiapost.gov.in.
Conclusion
Kisan Vikas Patra Maturity is 124 months i.e. ten years and four months. Kisan Vikas Patra Maturity Rules are easy to follow, the lock-in period for the KVP scheme is at least 30 months. You can take a loan against the KVP with low interest rates. Also, you can choose a nominee for the certificate.
There are three types of accounts for KVP certificates i.e. single holder, joint A, and joint type B.
