As in its previous structure, the relaunched Kisan Vikas Patra (KVP) will double your money in 100 months or eight years and four months. It is likely to have a higher rate of interest, but is unlikely to offer tax benefits, such as by National Saving Certificates (NSCs) or the Public Provident Fund.
The KVPs will be re-launched by Finance Minister Arun Jaitley and Communications Minister Ravi Shankar Prasad on Tuesday to provide another option under the small savings scheme. Jaitley had announced the relaunch of the scheme in his Budget speech this year.
There will be KYC (know-your-customer) norms in this scheme on the lines of NSC, a statement issued by the Finance Ministry said.
KVPs will be available in ₹1,000, ₹5,000, ₹10,000 and ₹50,000 denominations, with no upper ceiling on investment. The certificates can be issued in single or joint names and can be transferred from one person to the other multiple times. The facility of transfer from one post office to another anywhere in India and of nomination will also be available.
KVPs can also be pledged as security to get loans from banks and in other cases where security is required to be deposited. Initially, these will be sold through post offices, followed by public sector bank branches. An investor can en-cash certificates after the lock-in period of two years and six months and, thereafter, in any block of six months on a pre-determined maturity value.
KVP was a popular savings scheme in the 1980s and 1990s, with similar assurance of doubling the money in 100 months. However, following the Shyamala Gopinath Committee report and alleged money laundering, the scheme was discontinued with effect from December 1, 2011.