This Post Office Program Lets You Double Your Money – Check Interest Rate, Features, Withdrawal Rules
The Post offers different types of deposit systems, which are very popular with investors. This is mainly because they are guaranteed – backed by the government. Some of these schemes also enjoy tax benefits under Section 80C of the Income Tax Act. Therefore, many investors prefer to have these plans in their portfolio.
The multiple savings plans include the Postal Term Deposit Account (TD), the Postal Monthly Income Account (MIS), the Seniors Savings Plan (SCSS), the Postal Savings Account, National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Sukanya Samriddhi Accounts, 5-Year Post Recurring Deposit Account (RD) and Public Provident Fund (PPF) account. However, these programs are aimed at different types of investors with different objectives.
Therefore, investors planning to save for the long term might consider investing in Kisan Vikas Patra (KVP). Not only is the amount of capital invested safe because it is backed by a government guarantee, but the interest earned by the investor is also completely safe. With KVP certificates, an individual can make a minimum investment of Rs 1000, with no upper limit. The current interest rate offered is 6.9 percent pa compounded annually.
Experts say that the main goal of the program is to encourage long-term financial discipline in people. Currently, the duration of the plan is 10 years and 4 months (124 months) according to the last update. The popularity of this program is due to the fact that it is known to double a one-time investment in around 10 years. For example, after investing 5,000 Rs in the KVP certificate system, you will get a corpus of 10,000 Rs post-maturity. So after investing a lump sum today, you can get double at the end of the 124th month.
There are different types of Kisan Vikas Patra certificates available;
– Single holder type certificate, which is issued to an adult for himself. It is also issued in the name of a minor or to a minor.
– Joint type “A” certificates are issued jointly to two adults, payable to both holders jointly or to the survivor.
– Type “B” joint certificates are issued jointly to two adults, payable to one of the holders or to the survivor.
Industry experts say KVP is an ideal choice for risk-averse people with excess cash, which is not needed anytime soon. However, be aware that it all depends on your risk profile and your goals. As investors looking for tax saving programs can opt for options like PPF (Public Provident Fund), NSC (National Saving Certificates), FD Tax Saving Bank Schemes or Equity Linked Savings Scheme ( ELSS) if one is open for certain level of risk exposure.
Another advantage of Kisan Vikas Patra is its guaranteed returns. Thus, whatever the fluctuations of the market, we will obtain the guaranteed sum. Even though the current maturity period of this certificate is 124 months, the maturity proceeds will continue to accumulate interest until the investor withdraws the amount.
In addition, even if the account matures after 10 years and 4 months, the blocking period is 30 months. Therefore, one can prematurely close KVP before maturity, but only after 2 years and 6 months. To withdraw the amount at maturity, the account holder must submit a request form-2 to the accounts office.
With an invested amount of Rs 1000, if one withdraws just at the end of the blocking period, two and a half years but less than three years, he will obtain Rs 1154. While after five years but less than five and half years, we will obtain Rs 1332. After seven and a half years but less than eight years, we will obtain Rs 1537. After 10 years but before the maturity of the certificate, Rs 1774 will be payable to the investor and at maturity, l investor will get Rs 2000.