- Date : 15/11/2022
- Read: 3 mins
Latest changes in the Kisan Vikas Patra
Various small saving schemes are backed by the Indian Government, like the Public Provident Fund (PPF), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), etc. The Government reviews these schemes every quarter and, if needed, makes changes in the scheme details.
In the latest round of changes, the government has hiked the interest rates and reduced the investment tenure for the Kisan Vikas Patra. These changes will be applicable from the third quarter of the financial year 2022-23, i.e., the October – November – December 2022 quarter. Here’s a look at the Kisan Vikas Patra scheme and what’s changed.
What is the Kisan Vikas Patra scheme?
The Kisan Vikas Patra is a fixed-income small saving scheme that doubles your investment over the investment tenure. You must invest once and then receive a lump sum on maturity. The minimum investment is Rs.1000 and thereafter in multiples of Rs.100.
The interest of the scheme is fixed by the government and is also reviewed every quarter.
In a recent round of changes, the government has changed the interest rates and investment tenure of the Kisan Vikas Patra.
Earlier, the interest rate of the scheme was 6.9% compounded annually. However, from the October-December 2022 quarter, the interest rate has been hiked by 10 basis points to 7%. So, investors can now enjoy increased interest rates which have become effective from 1st October 2022.
Regarding the investment tenure, earlier, the tenure was 124 months. However, now the investment tenure has been reduced by one month. Effective from 1st October 2022, investments will only be available for 123 months.
Other details of the Kisan Vikas Patra scheme
If you want to capitalize on the latest changes and want to invest in the Kisan Vikas Patra scheme, here are some details that you should know about –
- The interest rate when the account is opened will be considered when calculating the maturity tenure.
- A single or a joint account can be opened
- Premature withdrawals are allowed only under specified circumstances. These circumstances include the following-
1.Death of the account holder (s)
2.If a Gazetted Officer is a pledgee and he forfeits the account
3. If the court orders such closure
4.In the case of premature closure, the interest rate applicable for the post office savings account will be calculated on a simple interest basis.
The bottom line
If you are looking for a fixed-income instrument that doubles your investment over a long-term tenure, the Kisan Vikas Patra scheme can be a suitable choice. Know the changes made and then invest in the scheme if it aligns with your goals and needs.