Kisan Vikas Patra: Know the Withdrawal Procedure

Kisan Vikas Patra issued by the India Post is one of the most prominent form of investment option available for common man in India. This saving certificate scheme was introduced way back in 1988. But in 2011, the government of India closed it briefly due to the possible misuse of the certificate. In 2014, the NDA led government relaunched the scheme whose maturity tenure is 124 months.

A Kisan Vikas Patra (KVP) can be purchased by an adult either for himself/herself or it can be bought on behalf of a minor. In case of a Trust, two adults can jointly purchase KVP. The minimum purchase value stands at Rs 1000 and there is no maximum limit for KVP.
The KVP has a lock in period of 2 years and 6 months from the date of issue and the certificate can be withdrawn prematurely.

Types of Kisan Vikas Patra

There are three types of accounts which may be opened under Kisan Vikas Patra. They are:
Single Account - It is issued to an adult for self or on behalf of a minor.
Joint A Account - It is issued jointly with a maximum of up to 3 adults. In this case, all the joint holders are eligible to security the maturity proceeds from the scheme.
Joint B Account - It can be opened jointly by a maximum of up to 3 adults. But the proceeds of maturity will go for to only one holder or the survivor.

Benefits of Kisan Vikas Patra

Flexibility of Investment

Parking funds in Kisan Vikas Patra is flexible for investors as investors can put in as low as Rs 1000 initially and in multiples of Rs 100 there-after. With no upper limit on investment, this scheme appeals for all kinds of investors be it a small or a big one.

Compounding Interest

The interest on the KVP gets compounded annually, thus bringing in higher returns to the investors. Investors will stand to earn more return from their investments in long run.

Safest form of Investment

The KVP is backed by the government of India thus returns on the principal amount is guaranteed and is one of the risk-free making it best suited for risk-averse investors.

Easy Process

Investment in Kisan Vikas Patra is easy and quick process as it involves minimal documentation process. All the investor has to do is to walk into the nearest post office near to their house and open an account.

Pre-Mature Withdrawal Available

Though the KVP gets matured after 124 long months, the scheme has an option for pre-mature withdrawal facility. Investor can withdraw the proceeds from the KVP after completion of lock in period of 2 years and 6 months with no penalty or charges. If pre mature withdrawal is made before 2 years and 6 months, then they will have to bear the penalty or charges under the scheme.

Loan against Kisan Vikas Patra

Investors can avail loan against their Kisan Vikas Patra it can be either a business or personal loan by collateralizing the KVP certificate. The loan comes up with an attractive interest rate for borrowers.

Kisan Vikas Patra Pre-Mature Withdrawals

Investors can withdraw funds from the Kisan Vikas Patra or KVP but there are certain limitations for it and are as follows:

If Pre - mature withdrawal is made within a tenure of 1 year, then the investor will not receive any interest. In addition to it, the investor will have to pay penalty charges as per the regulations of the scheme.

If Pre - Mature withdrawal is made after a period of 1 year and up to two and half years, then the investor will receive the interest accumulated so far but at a reduced rate.

If Pre - Mature withdrawal is done after 2 years and 6 months, then it will not attract any penalty or charges for the investor. An interest at the applicable rate will also be earned on KVP.

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