Certificate Types
According to the National Savings Institute, KVP certificates can be categorised as follows:
- In the ‘Single Holder’ type, a KVP certificate is issued to an individual under his name. Also, an individual can furnish a KVP certificate for a minor, wherein the certificate will be issued under the individual’s name
- In the ‘Joint A' type, a KVP certificate is issued to two adults investing jointly, wherein, upon maturity, the amount will be paid to both holders jointly or to the survivor
- In the ‘Joint B' type, a KVP certificate is issued to two adults investing jointly; however, in this case, when the investment matures, the amount will be paid to either one of the account holders or to the survivor
Eligibility
In this scheme, any Indian citizen who is above 18 years can invest and buy a certificate; however, it also allows minors, through aid of an adult, to invest and avail a KVP certificate. Moreover, the scheme does not have an age limit for investors and thereby, proving to be beneficial for senior citizens.
Documents Required
To avail benefits of the KVP scheme, citizens are required to submit the following documents:
- Identity proof for the KYC process (Aadhaar card/PAN/Voter ID card/Driving License/Passport)
- KVP application form
- Address proof
- Birth certificate
Kisan Vikas Patra Interest Rate
The Ministry of Finance regulates/decides the interest rates, which are not subject to market risks, on KVP investments. Also, the government reviews the interest every quarter and tweaks it frequently. As of April 01, 2020, the KVP interest rate was fixed at 6.9% compounded annually.
Kisan Vikas Patra Withdrawal Rules
Unlike numerous other long-term saving schemes, KVP allows investors to make premature withdrawals; however, it comprises certain limitations such as the scheme has a minimum lock-in period of 30 months or two and a half years. Any encashment before two and a half years could either invite penalty or lead to reduced interests.
KVP Progress
Consolidated KVP Savings Collections (2017-18)
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Institute
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Gross
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Net
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Department of Post
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Rs. 24,638.39 crore (US$ 3,822.87 million)
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Rs. 24,588.76 crore (US$ 3,815.17 million)
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Banks
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Rs. 28.66 crore (US$ 4.45 million)
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Rs. 28.46 crore (US$ 4.42 million)
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Total
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Rs. 24,667.05 crore (US$ 3,827.32 million)
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Rs. 24,617.22 crore (US$ 3,819.58 million)
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According to government data, between 2018 and 2019, 30.18 lakh KVPs were sold, with deposits worth Rs. 26,478.36 crore (US$ 3,788.57 million), while between 2019 and 2020, 21.43 lakh KVPs were sold, with investments of Rs. 19,730.16 crore (US$ 2,799.00 million). Under the KVP scheme, the outstanding balance stood at Rs. 123,736.61 crore (US$ 17,553.78 million), as of March 31, 2020; 8.02 crore certificates were registered until November 2020.
To promote digitalisation, the government discontinued physical KVP certificates and introduced e-mode certificates (w.e.f. 01.07.2016). In compliance to its policies, the Indian government ensured the availability of small savings schemes to investors through authorised commercial banks, wherein Bank of Baroda launched e-Kisan Vikas Patra on August 16, 2018. This facility is also available at the Union Bank of India and Axis Bank, with other key commercial banks joining the bandwagon in the near future.