Due to the current low-interest-rate rule, small savings options seem to be attractive. Kisan Vikas Patra is also a small saving instrument available at all of the post offices in the country. According to this scheme, your money gets doubled in 8 years and 7 months.
Basic Features Of KISAN VIKAS PATRA:
1.East to buy: This scheme is available in different denominations of Rs 100, Rs 500, Rs 1000, Rs 5000, Rs 10,000 and Rs 50,000. This scheme is available for no account opening hassles. The process is very simple. A person will have to visit the post office first to fill the form. You will have to hand over the cash or cheques / DD, and you are done. There is no limit on the number of KVP certificates and the maximum amount you invest.
2. Post-tax Yield: The whole interest is taxable on an annual basis, and no TDS is involved. The post-tax yield from Kisan Vikas Patra (KVP) depends upon the marginal tax that is applicable to you.
3. Premature Encashment is possible just after 2 years and 6 months and it is very expensive too. You can see it on the table:
|
Period |
Yield |
Reduction in yield |
|
Up to 2.5 years |
N.A |
N.A |
|
2.5 years to 3 years |
6.5% |
1.91% |
|
3.5 years to 4.5 years |
7.0% |
1.41% |
|
5 years to 6 years |
7.5% |
0.91% |
|
6.5 years to 8 years |
8.0% |
0.41% |
|
8 years to 7 months |
8.4% |
NIL |
4. The personal loan facility is also available against KVP by pledging it with the bank. In other words, invest in KVP if you’re done with your tax-saving investments and further exhausted your PPF investment limit (including your spouse & children) but make up your mind that you’ll remain invested till the maturity because if you make a premature exit, your effective yield will be considerably lower (the facility of making an early exit can be exercised in an emergency by sacrificing some returns).
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