FD vs KVP: Best Long-Term Investment Option

Compare Kisan Vikas Patra (7.2% interest) to SBI, HDFC Bank, and PNB Fixed Deposits (6.8%, 7%, and 6.5% interest, respectively) for long-term investments with assured returns.


Long-term investors seeking guaranteed returns can explore various options, including Fixed Deposits (FDs) from top banks like State Bank of India (SBI), HDFC Bank, and Punjab National Bank (PNB), as well as the Kisan Vikas Patra (KVP).

Kisan Vikas Patra 

Kisan Vikas Patra (KVP) is a small savings program provided by the Indian Postal Department, designed to support small and marginal farmers and promote rural economic growth. From January to March 2023, 

KVP features a competitive 7.2% interest rate, subject to quarterly adjustments by the Union Government. Investments in KVP will double in value after ten years. There is no maximum KVP investment limit, with a minimum requirement of Rs 1,000.

Also ReadReasons to Invest your Money in Small Savings Scheme?

It's crucial for investors to stay informed about rate changes, as the government revises rates every quarter. KVP is an excellent way to save money and earn impressive returns.

KVP maturity value 

Kisan Vikas Patra (KVP) is an appealing investment choice for ordinary citizens, allowing an investment of Rs 100,000 to mature into Rs 200,000 after a 10-year period. KVP's maturity value is achieved through annually compounded interest.

This method adds the interest earned each year to the principal, which is then used to compute interest for the subsequent year. Consequently, interest accumulates significantly over time.


SBI, India's largest public sector bank, dominates the financial market and offers competitive interest rates on Fixed Deposit (FD) plans. Currently, SBI provides a 6.8% interest rate for 10-year FDs with deposits under Rs 2 crore.

Also ReadSBI Senior Citizen Savings Scheme

By depositing Rs 1 lakh in an SBI FD for 10 years, you can earn approximately Rs 1,90,555 when interest is compounded quarterly. To accurately determine deposit returns, utilise the SBI FD calculator available on their official website.

HDFC Bank 

HDFC Bank presents an appealing 7% annual interest rate for ten-year deposits below Rs 2 crore. Investing Rs 1,00,000 in an HDFC Bank FD on 23-Mar-2023 will result in a maturity value of Rs 2,00,160 on 23-Mar-2033, with interest earnings of Rs 1,00,160.


PNB delivers a 6.5% interest rate on 10-year deposits under Rs 2 crore. An investment of Rs 1,00,000 will mature to Rs 190,556 by 23-Mar-2033. By applying a 6.5% annual compounding interest rate to the principal over ten years, this secure investment outperforms inflation.

PNB also offers other FD options with varying tenures, granting investors the flexibility to select the most suitable plan.

Bank FD taxatio

Interest earned on fixed bank deposits (FDs) is taxable. PAN users must pay a 10% tax on interest exceeding Rs 40,000, while non-PAN users face a 20% tax. Taxes are deducted at the source (TDS) when interest is credited annually.

It's essential to consider the non-recoverable TDS when evaluating FD options. The bank is responsible for remitting the deducted amount to the government on behalf of the investor.

To Sum Up

When considering long-term investments with guaranteed returns, both Fixed Deposits from leading banks like SBI, HDFC, and PNB and the Kisan Vikas Patra offer competitive interest rates and secure options.

While bank FDs are subject to taxation, it's essential to weigh the overall returns and stay informed about interest rate revisions. By thoroughly examining these investment opportunities, you can make an informed decision that aligns with your financial goals and risk appetite.


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