Following are the benefits of Kisan Vikas Patra, a saving scheme that provides guaranteed returns to the depositor.
Capital Protection: Unlike other saving schemes such as mutual funds, stocks and securities, Kisan Vikas Patra offers you risk-free returns. The investment amount will not get affected at any cost. Though the interest rate may vary based on the revision, the invested amount remains intact.
Long-term Saving Plan: This is a long-term saving scheme that has the tenure of up to 9 years and 10 months. The invested amount doubles after 9 years and 4 months. This is an ideal investment plan that can help you get a lump sum for bigger financial commitments.
Tax - Benefits: There is no tax deducted on the interest earned through the scheme. But the investment made in this scheme cannot be used to claim tax deduction.
Investment Amount: One can open this saving scheme with the minimum of Rs. 1000. Also, the deposits can be done only in multiples of 1000, 2000, 3000, etc. This is a drawback to the plan as lesser amount cannot be invested. There is no ceiling on the upper amount for investment which makes this scheme an ideal plan for bigger financial goals.
Interest Rate: The interest rate on Kisan Vikas Patra is determined every financial quarter. Hence there is no fixed interest rate on the scheme. Generally, the interest rate on this scheme ranges between 7.1% to 7.9%, depending on the prevailing market situations.
There is no limit on the maximum amount to be invested, which makes it an attractive saving option for various individuals.
Additional Reading: Kisan Vikas Patra (KVP) - Features and Benefits