What is the Kisan Vikas Patra Scheme and why should you know about it?

Akshita Maheshwari
March 6, 2023
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What is the Kisan Vikas Patra Scheme?

Kisan Vikas Patra is a small-savings certificate programme launched by India Post in 1988 with the motive of inculcating the habit of long-term investment discipline in people. As per the most recent update, the scheme’s duration is now 124 months, i.e., 10 years & 4 months. Initially, the scheme was targeted towards farmers, hence the name, but today anybody who fulfils the eligibility criteria can avail of the scheme. KVP is a safe and secure option that the Government of India guarantees.

Why was the Kisan Vikas Patra Scheme launched?

At the time of its launch, India was largely an agrarian and rural society. Unfortunately, most of the rural population did not have access to formal banking services due to a lack of infrastructure, low financial literacy, and the high cost of accessing these services. This is why the government launched the Kisan Vikas Patra scheme in 1988 to enable the farming population to save without risking their funds and still earn a good return.

Since KVP was made available at post offices nationwide, it was much easier for people in rural areas to invest in it. Moreover, this scheme was designed for long-term investing because a majority of the rural population did not have retirement funds or pension plans. By investing in KVP, individuals could support themselves in their old age.

What are the eligibility criteria for Kisan Vikas Patra Scheme?

  • A candidate must be 18 years or older.
  • A candidate must be a citizen of India.
  • Adults may apply on behalf of minor applicants.
  • Adults may apply on behalf of a person of unsound mind.
  • Non-Resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to invest in KVP.

What is the investment amount required for Kisan Vikas Patra Scheme?

  • The minimum investment amount needed is Rs.1000, with no upper limit.
  • In 2014, the Government of India made PAN card proof necessary for investments above Rs.50,000. This was done to prevent money laundering.
  • If depositing Rs.10 lakh or above, the applicant must submit income proofs, including ITR documents, salary slips, bank statements, etc.

What are the different types of KVP certificates?

There are three types of KVP certificates:

  1. Single Holder Type – This certificate is furnished to an adult. An adult can also obtain the certificate for a minor, where it will be issued in their name.
  2. Joint A Type – In this case, the certificate is issued to two adults who will both be receivers of the pay-out at the end of the tenure. However, if one of the account holders dies before maturity, then the amount will be given to the second holder.
  3. Joint B Type – In this type, the certificate is again issued in the name of two adults, but the difference is that the pay-out is given to only one of the two certificate holders or to the one who survives till maturity

What is the current interest rate of the Kisan Vikas Patra Scheme?

As announced on December 30, 2022, KVP deposits made in the first quarter of 2023, i.e., January to March, will earn an annual compounded interest rate of 7.2%. This means that if you invest in a lump sum in KVP right now, your money will double by the end of 120 months.

It is important to note that the Kisan Vikas Patra interest rate is revised every quarter by the Union Government, with the next revision scheduled around the end of March 2023.

What are the documents required for availing of a KVP certificate?

  • Form A must be duly submitted to the nearest post office or one of the designated banks.
  • Form A1 is required when applying through an agent.
  • KYC documents like Aadhar Card, PAN Card, Passport, Voter’s ID, Driving License, etc., as identity proofs.

How to apply for Kisan Vikas Patra online?

  1. Log in to your DOP internet banking account.
  2. Click on General Services > Service Requests > New Requests
  3. Under “New Requests,” choose “KVP Account.”
  4. Enter the KVP minimum deposit amount and choose the debit card linked to your Post Office Savings account.
  5. Agree to the terms and conditions, enter your OTP, and click “Submit” to view/download your deposit receipt.

What are the rules regarding premature withdrawals in the KVP Scheme?

  • If the withdrawal is made within 1 year, no interest will be given. Moreover, the investor will also have to pay a penalty as per the regulations of the scheme.
  • If the withdrawal is made after 1 year but before 2.5 years, the investors will receive interest but at a reduced rate.
  • If the withdrawal is made after 2.5 years, the investor will not have to pay any penalty and will also receive interest at the applicable rate.


The Kisan Vikas Patra is one of the safest options for investment, with profitable returns guaranteed by the government and protection from market risks. The scheme provides financial security for the long term and thus benefits people with low-risk tolerance.


  1. Can the KVP certificate be used as collateral for securing a loan? Yes.
  1. Is KVP eligible for deductions under Section 80C? No.
  1. Is KVP taxable? Yes, the returns from KVP are completely taxable. However, the withdrawals made after the scheme’s maturity are exempt from Tax Deducted at Source (TDS).
  1. Can the KVP certificate be transferred to another person? Yes, it can be transferred from one person to another in some cases with the consent of an officer of the post office or bank.
  2. Can the KVP be transferred from one post office/bank to another? Yes, it can be transferred to another post office/bank by filling out and submitting Form B.
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