Updated on 21 Jan 2020.
Don’t you know about the Money Double Scheme?
I am going to discuss this government-backed investment scheme run by Post Office that makes your money double in a given interval of time.
Let’s reveal more about this scheme.
What is the Post Office Money Double Scheme
Post Office money double scheme is also known as Kisan Vikas Patra (KVP). ( Don’t go after the name ‘Kisan’, it is not for farmers only, anyone can invest in KVP.)
Kisan Vikas Patra is a certification scheme in which invested money gets doubled in around 10 years based on the interest rate.
Under the amendment of the scheme, PAN card proof is compulsory for investments above Rs. 50,000. Also if you are planning to invest Rs. 10 lakh and above, documents like salary slips, ITR documents, and bank statements are to be submitted.
Kisan Vikas Patra caters to even the smallest investor as the minimum deposit is only 100 rs. You can invest only through the post office.
You can also read – Post Office Monthly Income Scheme
Features of Post Office Scheme to Double the Money
- No investment cap
- Kisan Vikas Patra can be bought in any Post Office in denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 10,000 and Rs. 50,000.
- Currently, KVP offers a 7.6% interest per annum. Interest rates are subject to change quarterly based on decisions of the Finance Ministry. This change in the interest rate causes the maturity time to vary slightly in terms of months.
Here is a list of history of interest rates for Kisan Vikas Patra over the years.
|Financial year||April – June||July – September||October – December||January – March|
(maturity – 110 months)
- More flexible plan than PPF or NSC as you can withdraw from KVP scheme after 2 ½ years. You will get the principal and the interest back.
If a withdrawal is between 1 to 2 ½ years, you will get back the principal with a cut in interest earned.
For premature withdrawal within a year, you will get the principal amount but you won’t be given any interest and there is a penalty fee.
- As KVP is a government-backed scheme, returns are guaranteed.
- KVP identity slip is issued on purchasing that includes the Kisan Vikas Patra Certificate, the KVP serial number, the amount, the maturity date and the amount to be received on the date of maturity.
- In case of loss of certificate, an application along with identity slip needs to be submitted to the same Post Office where the certificate was initially bought. On successful verification, a duplicate certificate will be issued.
- KVP does not come under section 80 C and the returns are taxable.
- Payments to purchase the scheme can be made through cash, cheque or Demand Draft. If the payment mode is cash, the KVP certificate is issued on the spot and if it is cheque or DD, a certificate is issued once the cheque/DD is cleared.
3 Types of Kisan Vikas Patra Certificates.
#1. Single Holder Type Certificate
As the name suggests, these certificates are issued to a single individual.
In this type, the individual can open a single holder account in the name of the minor also.
#2. Joint ‘A’ Type Certificate
Joint A type certificate is a certificate issued in case of joint KVP account holding. Type A is issued to two adults.
At the time of maturity, the amount is payable to both individuals. For cancellation, withdrawal, transfer of KVP signature of both account holders is required.
#3. Joint ‘B’ Type Certificate
Joint B type is similar to type A. Here also KVP is issued to both account holders.
The only difference under this scheme is at the time of maturity the account is paid only to one of the account holders.
Pros of Post Office Money Double Scheme
- KVP is a safe investment as it is not subjected to market risks. Double the investment is guaranteed once the tenure ends.
- KVP can be transferred from one person to another person easily.
- It can be used as collateral security in banks against loans.
Cons of Post Office Money Double Scheme
- No tax benefits as compared to PPF and NSC.
- Interest is taxable.
- Deposits to KVP also exempted from wealth tax.
- While premature withdrawal is possible, it is permitted only after 2.5 years prior but you will get some cut on the interest.
- At the time of withdrawal, the amount is transferred to the concerned person’s savings account. No cash withdrawals are allowed.
In summary, Kisan Vikas Patra is a scheme designed to cater to all economic groups.
The current interest rate is 7.6% making the tenure 113 months (9 years and 5 months) to mature. KVP is beneficial for those who are looking to set money aside with decent returns void of market risks.
In order to open a Post Office Account, these are the requirements
- One must be a resident citizen of India.
- He/She must be of 18 years or older
- In case of a minor, he/she has to be at least 10 years old.
- For joint account 2 or 3 individuals are required.
The following are the simple steps to open a Post Office Savings account.
- Visit the nearest Post Office or the official website of India Post and get the account opening application form.
Below is the account opening form. You can click here to directly download.
Fill up the application form along with the required documents. You will need the following documents.
- Passport size photographs.
- ID Proof (Aadhar card, voter ID, Ration card, Driving License, Etc).
- Address proof (telephone bills ration card, electricity bill, bank passbook, etc).
If the investment is above Rs. 50,000, you have to submit your PAN card.
- After the submission of documents, you need to pay a deposit of Rs 20. If you need a Post Office account with a cheque book, you will have to pay Rs 500.
- After the payment is done, Your Post Office savings account will be created.
- For senior citizens, there is a separate application form. You can click here to download.
How to Encash Kisan Vikas Patra After Maturity
You can encash Kisan Vikas Patra only at the Post Office these were issued. If you are not able to reach out to the same Post Office, you can encash from other Post Office after completing their certain formalities. You must keep the identity slip safe, as it is a must-have document to produce at the time of Kisan Vikas Patra’s encashment. Y
ou have to produce FIR and other details along with duplicate application form (NC-29) to get the duplicate KVP certificate.
That’s all for this Post Office’s Money Double Scheme. In case of any doubts or questions, please feel free to ask in the comments section below, I will try to respond as early as possible.