New Delhi: Kisan Vikas Patra or KVP is one of the most secured instruments of investment which is available in post offices and is technical referred to as small savings instrument. If you’re looking to grow your money any degree of risk, the Post Office’s Kisan Vikas Patra (KVP) scheme could certainly be an option. It’s one of the government’s small savings schemes and offers returns based on a fixed interest rate. At the current interest rate, your KVP investment can double in approximately 9 years and 7 months.
Rate of interest in KVP
Kisan Vikas Patra currently offers an interest rate of 7.5% per annum. This interest is calculated on a compounded basis. This means that the interest earned on your investment also contributes to future interest earnings. This is why the investment amount gradually grows rapidly over time. However, the KVP interest rate is subject to change during the government’s review of small savings schemes.
How much will Rs 1 lakh be in KVP?
If an individual invests Rs 1 lakh in Kisan Vikas Patra and stays invested for the entire maturity period, this amount could grow to around Rs 2 lakh based on current interest rates. This means the investor’s money could double in approximately 9 years and 7 months. During this time, the investor does not have to worry about daily market price fluctuations like with stocks or mutual funds.
Comes with a sovereign guarantee
KVP is one of the small savings schemes issued at post offices of the country. It is backed by the government of India and, therefore, almost no risk compared to any market-linked investment options. Since the risk is negligible, the potential for generating returns is also limited. Therefore, it is important to consider your financial goals and investment horizon before investing.
Is early withdrawal permitted?
Kisan Vikas Patra is a long-term savings scheme. Premature withdrawals are available after investing under certain conditions. However, if the investor maintains the investment for the specified period, they receive the maturity amount as per the scheme’s rules. This lock-in period is 30 months. Therefore, KVP may be particularly useful for those who wish to keep their money invested safely for a long period.
Things to remember
Before investing in KVP, be sure to familiarise yourself with the current interest rates and government regulations. Interest rates on small savings schemes are subject to change from time to time. Overall, at the current interest rate of 7.5%, money invested in Kisan Vikas Patra can double in approximately 9 years and 7 months. This is an option for investors who want to save safely over the long term, while remaining insulated from market fluctuations.
