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The new 2014 Kisan Vikas Patra

Union finance minister Mr. Arun Jaitley on 18 November relaunched Kisan Vikas Patra (KVP), a scheme which was discontinued few years ago in 2011. Finance minister had promised to launch it during his budget speech earlier this year. In the budget speech he had outlined launch of KVP and the rational behind it. This is what he had to say in in para 27 of his budget speech

“Kisan Vikas Patra (KVP) a very popular instrument among small savers will be reintroduced The instrument will encourage people, who may have banked and unbanked savings to invest”

Read along to find out all about the new 2014 Kisan Vikas Patra

History of Kisan Vikas Patra?

Kisan Vikas Patra (KVP) – a certificate savings scheme was originally launched by the Government of India on 1st April, 1988. The original KVP was a scheme where money doubled in 5 ½ years. It had become quite popular and in the year of its closure, the scheme secured gross collections of Rs. 7575.95 crores (April 2011 to November 2011).

All you need to know about the NEW 2014 Kisan Vikas Patra (KVP)

Money doubles in 100 months (8 years and 4 months)
There is no upper limit on amount you can invest in this scheme.
The re-launched Kisan Vikas Patra (KVP) will be available to the investors in the denomination of Rs. 1000, 5000, 10000 and 50000
KVP can be issued in single or joint names.
KVP can be transferred from one person to any other person as many times as desired.
KYC norms are applicable, however PAN card is not a mandatory requirement as in other post office schemes.
It can be transferred from one post office to another post office in India
Nomination facility is available.
Investors can liquidate their certificates after the lock-in period of 2 ½ years and thereafter in any block of six months on pre-determined maturity value.
It will initially be sold in post offices but government plans to rope in nationalized banks later for the sale.
The certificate can also be pledged as security to avail loans from the bank or other institutions.

Return on Investment on the new 2014 Kisan Vikas Patra

Money doubles in 100 months (8 years and 4 months). Effective pre-tax rate of return is 8.67%. Please read the chart below to see the income tax implication.

Return on the new 2014 Kisan Vikas Patra

Divya (62 Posts)

Divya is a Financial Advisor at DivyaAdvisor.com. She has MBA(Finance) from BIT,Mesra,Ranchi and authorized distributor of financial products listed below. Products: LIC of India, Star Health, Shares and all Mutual Funds Houses in India Others: Tax Free Bonds and Real Estate Advisory