Kisan Vikas Patra is one of the best long term investment plan belongs to saving scheme that anyone can buy by investing lowest amount. Government initially introduced this policy in 1998 and after some necessary changes and reintroduced this policy in 2014. In 2011, government formed committee recommended that some fraud people may use this policy for money laundering then government proposed this scheme with some minor changes and made PAN card submission mandatory and maximum transaction limit to INR 50000. If someone wants to invest more than 10 lakhs then they have to submit information about their source of income.
KVP can be bought from any post office in across country. These certificates are easy to buy and safe and reliable enough to invest amount. Anyone who wants to take benefits from this sector and tenure of this policy is 100 months or 8 years and 4 months. This policy is beneficial for rural and semi urban areas customers. Interest rate for this policy is stable and finance ministry monitor and as per need change the rate for customer benefits.
1. Single Holder Type Certificate: This type of KVP is allotted to single person where all the processing managed by individual.
2. Joint A Type Certificate: Under this scheme two adult may invest and both will be responsible for all the processing.
3. Joint B Type Certificate: This certificate will be liable equally and will equally share the loss and all the gains, even if one of them is minor.
As per policy applied by the government, eligibility for KVP is outlined below
1. Parent can apply for KVP if main person is not mature enough or minor.
2. Applicant must be sensible and resident of India.
3. NRI and HUFs (Hindu Undivided Family) are not eligible to invest amount under this policy and Trusts are eligible to spend their amount under this scheme.
If anyone is planning to invest their amount under this scheme then they should visit to their nearest post office to buy KVP because online transaction and processing regarding this policy is not availed by the government. Although customers can get information about current interest rate, process to fill application and other necessary and useful information before buying KVP from post office.
As we know that interest rate of KVP change periodically and investor will get higher interest rate as their policy bond gets older. If someone buy KVP worth INR 40000 and hold it for 8 years and 7 month then he will receive maturity amount INR 80000. Locking period of this policy is 2 years and 6 months; after this period amount can be withdraw from KVP. Current interest rate of this policy is 7.8% compare to last year interest rate 8.7%.
To buy KVP, people need to fulfill all the details in the application form to confirm the identity of someone who is going to buy this KVP. As per structured application user need to fill following details in application form:
1. Type of certificate to confirm whether it is for single or Joint KVP.
2. Amount that you are going to invest to buy KVP certificate.
3. Mode of payment regarding this scheme.
4. Confirmation about name of second investor in case of joint account type.
5. Complete details about nominee to make task much easier.
6. In case of minor investor, information about his parents or legal guardian is important.
This form must be verified by the investor including address details, signature and date of birth related information.
1. KVP offers flexibility in certificate and least amount that needs to invest is INR 100 where as maximum price for single certificate that anyone can buy is INR 50000.
2. As per policy customers will get benefits in income tax.
3. If customer earn taxable amount from bonds then tax will be imposed on that amount.
4. KVP can be transfer from one to other person at the same time all applicable benefits will be transferred with that certification to new customer. In all these process approval from post office is mandatory.
5. It is central government policy so no chance of any financial fraud or other respective complication.
6. After complication of locking period amount can be withdrawn from this policy.
7. There is no investment limit and as per budget people can invest amount.
8. On the basis of KVP investor can apply for personal loan.
9. This is one of the robust and safe investment plans that offer higher interest rate without affecting with inflation rate and policy.
Government of has introduced some strict policy and rules with KVP after its relaunching in 2014. Before final investment as a aware investor you must have the all the necessary information related to this policy.
Cash Accepted: Indian currency.
Commencement and Titles: This scheme will be known as Kisan Vikas Patra 2014 and will be effective after publication in official Gazette.
Act: Government Saving Certificate Act, 1959.
Post office: Any main or sub branch of post office offering banking and saving facility.
Form: Associated with rules defined by the government.
Identity Slip: Certificate that give confirmation about investment.
Denomination of certificate: The entire certificate issued by the government regarding denomination and price of these certificate is Rs. 1000, Rs. 5000, Rs. 10000 and Rs. 50000.
Purchase of Certificate: Investor can buy certificate from any authorize post office of any specified amount.
Application of Post Office Saving Certificate Rule, 1960: As per rule all the processing regarding the form will remain the same.
Types of Certificates: Following type of certificate issued by the government
Single Holder Certificate: This certificate is issued to any minor or any adult.
Joint A Type Certificate: This type refers to joint type of certificate and joint investment is necessary.
Joint B Type Certificate: This is also for joint investment but here investment form both investor is not mandatory.
Procedure to Buy Certificate: Applicant presence is mandatory along with all necessary document and application form. Payment can be done via cash, cheque or any other mode at post office in front of postmaster.
Issue of Certificate: The certificate will be issued to respective person after successful completion of payment. Date of payment and date of certificate issuing will be same. If due to any reason any delay in certificate issue then investor will receive his certificate of previous date.
Nomination in Certificate: As per rules of this investment and saving scheme, nominee can be added in KVP that will if in case of sudden death or tragedy of main investor, nominee can settle the policy and claim.
Transferring KVP Certificate from One to Other Person: If someone wants to transfer their certificate then firstly they have to send their request to postmaster and transfer will be possible in circumstances like guardian want to transfer his certificate to his son, single user wishes to switch for joint account or due to any legal action on main investor.
Kisan Vikas Patra Certificate Pledging: After request made by the interested person then postmaster can transfer amount to RBI or any authorize bank or corporative bank, house financing company approved by the central government, president of India, local authority or any state governor.
Interest after Maturity: Generally interest with amount is offered by the respective authority offer interest rate under following circumstances:
a. While paying the due amount, investor can get lump sum amount.
b. In post office saving account, as per rate simple interest rate will be calculated.
c. Interest rate can be calculated for certain period of time.