Last updated on February 16th, 2023 at 12:53 am
Kisan Vikas Patra (KVP) is a savings scheme offered by the Government of India. It was introduced in 1988 as a way to encourage small savings and to provide a source of financing for agriculture and rural development. The scheme allows individuals to invest a minimum of INR 1,000 (about $14) and earn interest at a rate set by the government. The investment can be made in the form of a single deposit or multiple deposits, and the certificates can be transferred or encashed after a specified period of time.
The scheme was closed to new investors in November 2014, but existing investments continue to earn interest and can be redeemed as per the terms of the scheme. The interest rate on KVP is currently 7.7% per annum, and the investment doubles in approximately 9 years and 8 months.
Benefits of Kisan Vikas Patra
The Kisan Vikas Patra (KVP) is a savings scheme introduced by the Indian government in 1988. It is aimed at encouraging small investors, particularly farmers, to save money for the long term. The scheme offers a range of benefits to investors, including a high rate of interest and a number of tax exemptions.
One of the main benefits of the KVP is that it offers a relatively high rate of interest compared to other savings schemes. The interest rate is currently set at 6.9% per year, which is higher than the interest rates offered by many other government-backed savings schemes. This means that investors can earn a higher return on their money by investing in the KVP.
Another benefit of the KVP is that it offers a number of tax exemptions. For example, investments up to Rs. 1.5 lakh are eligible for tax deductions under Section 80C of the Income Tax Act. This means that investors can reduce their taxable income by investing in the KVP, which can help them save money on their taxes.
The KVP also offers flexibility in terms of the investment amount and duration. Investors can choose to invest any amount starting from Rs. 1000, and the scheme has a maturity period of 100 months. This means that investors can choose to invest for a short or long duration, depending on their financial goals and preferences.
The KVP also offers the option of partial withdrawal after a certain period of time. This means that investors can withdraw a part of their investment if they need the money for any reason. This flexibility can be useful for farmers who may need to withdraw money to cover their expenses during times of financial hardship.
Another benefit of the KVP is that it is a safe and secure investment option. The scheme is backed by the Indian government, which means that investors can be confident that their money is safe and will be returned to them with interest when the scheme matures.
In conclusion, the Kisan Vikas Patra offers a range of benefits to investors, including a high rate of interest, tax exemptions, flexibility in terms of investment amount and duration, partial withdrawal, and the security of being backed by the Indian government. These factors make the KVP an attractive investment option for small investors, particularly farmers, who are looking to save money for the long term.
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FAQs on Kisan Vikas Patra Benefits
The Kisan Vikas Patra (KVP) is a savings scheme introduced by the Indian government in 1988. It is aimed at encouraging small investors, particularly farmers, to save money for the long term.
The KVP offers a range of benefits to investors, including a high rate of interest, tax exemptions, flexibility in terms of investment amount and duration, partial withdrawal, and the security of being backed by the Indian government.
Yes, the KVP offers the option of partial withdrawal after a certain period of time. This means that investors can withdraw a part of their investment if they need the money for any reason.
Yes, the KVP is a safe and secure investment option. The scheme is backed by the Indian government, which means that investors can be confident that their money is safe and will be returned to them with interest when the scheme matures.
The interest rate for the KVP is currently set at 6.9% per year.
