Kisan Vikas Patra: Small savings schemes run by the government are very beneficial for those people who want to invest money without taking any risk. They give good returns and the money is also safe. For this reason, the common man invests more in these schemes. Kisan Vikas Patra is also one of these schemes.
Kisan Vikas Patra has been a favorite of small savers for the last 37 years. Currently, Kisan Vikas Patra is giving 7.5% annual returns. This scheme gives the benefit of compounding. That is, interest on interest. Therefore, the money invested in it grows rapidly.
Kisan Vikas Patra, as the name suggests, is only for farmers. But that is not the case at all. Any Indian can invest money in this scheme. There is no maximum investment limit, but you have to invest at least Rs 1,000.
The age of the person investing in Kisan Vikas Patra should be at least 18 years. Apart from a single account, there is also a joint account facility. Minors can also join this scheme, but their parents will have to supervise it.
The maturity period of Kisan Vikas Patra is 10 years. The lock-in period of KVP is two years and six months. This means that you cannot withdraw money from this scheme before two and a half years under normal circumstances.
If you invest Rs 1 lakh in Kisan Vikas Patra, then at the current interest rate of 7.5 percent, it will take 9 years and 5 months for your money to double. That is, during this time, the value of your investment of Rs 1 lakh will become Rs 2 lakh.
Kisan Vikas Patra offers compound interest. If you have invested Rs 1 lakh in this scheme, then at the end of the first year you will get an interest of Rs 7500. This interest will be added to the principal and the total amount will be ₹ 1,07,500. In the second year, you will get interest on ₹ 1,07,500.
In the second year you will get interest on this ₹1,07,500, which will be ₹8062. This amount will now be added to your principal and will become ₹1,15,562 for the third year. Similarly, interest will be added to the principal every year and your money will continue to grow.
If you want to invest to save income tax, then investing in Kisan Vikas Patra will not be right. By investing in this scheme, you do not get the benefit of income tax exemption.
