Kisan Vikas Patra is a saving scheme that was announced by the Government of India that doubles the money invested in eight years and seven months. The Directorate of Small Savings Government of India, sells these saving bonds through all Post Offices in the country so that the scheme can be accessed by citizens from all over the country. A KVP can be encashed after two and a half years from the date of issue at the value it has been bought and the interest accrued for the period.
The “kisan” in Kisan Vikas Patra does not mean that only farmers can buy these saving certificates but means that the revenue mobilized by this scheme will be used by the Government of India in welfare schemes for farmers. Any individual can safely invest and save their money in the form of Kisan Vikas Patra.
1. Eligibility Conditions and Other Restrictions:
a) Minimum Entry Age: 60 years (completed)
b) Maximum Entry Age: No limit
c) Minimum Pension: Rs. 500/- per month
Rs. 1,500/- per quarter,
Rs. 3,000/- per half-year
Rs. 6,000/- per year
d) Maximum Pension: Rs. 5000/- per month
Rs. 15,000/- per quarter,
Rs. 30,000/- per half-year
Rs. 60,000/- per year
Ceiling of maximum pension is for a family as a whole i.e. total amount of pension under all the policies issued to a family under this plan shall not exceed the maximum pension limit. The family for this purpose will comprise of pensioner, his/her spouse and dependants.
2. Payment of Purchase Price:
The plan can be purchased by payment of a lump sum Purchase Price. The pensioner has an option to choose either the amount of pension or the Purchase Price.
The minimum and maximum Purchase Price under different modes of pension will be as under:
Mode of Pension
Minimum Purchase Price
Maximum Purchase Price
The Purchase Price to be charged shall be rounded to nearest multiple of Rs.5/-.
3. Mode of pension payment:
The modes of pension payment are monthly, quarterly, half-yearly & yearly. The pension payment shall be through ECS/NEFT only.
The first instalment of pension shall be paid after 1 year, 6 months, 3 months or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
4. Sample Pension rates per Rs.1000/- Purchase Price
The pension rates for Rs.1000/- Purchase Price for different modes of pension payments are as below:
Yearly: Rs. 93.8069 p.a.
Half-yearly: Rs. 91.7045 p.a.
Quarterly: Rs. 90.6767 p.a.
Monthly: Rs. 90.0000 p.a.
The pension instalment shall be rounded off to the nearest rupee.
These rates are not age specific.
5. Surrender Value:
The policy can be surrendered aftercompletion of 15 years. The Surrender Value payable will be refund of Purchase Price. However, under exceptional circumstances, if the pensioner requires money for the treatment of any critical/terminal illness of self or spouse then the policy can be surrendered before the completion of 15 years and the Surrender Value payable shall be 98% of Purchase Price.
Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
The rate of interest to be charged for loan amount would be determined from time to time by the Corporation.
Loan interest will be recovered from pension amount payable under the policy. The Loan interest will accrue as per the frequency of pension payment under the policy and it will be due on the due date of pension. However, the loan outstanding shall be recovered from the claim proceeds at the time of exit.
Taxes including Service Tax, if any, shall be as per the Tax laws and the rate of tax as applicable from time to time.
The amount of tax payable as per the prevailing rates shall be payable by the policyholder on Purchase Price. The amount of Tax paid shall not be considered for the calculation of benefits payable under the plan.
8. Free Look period:
If a policyholder is not satisfied with the “Terms and Conditions of the policy, he/she may return the policy to the Corporation within 15 days from the date of receipt of the policy stating the reason of objections.
The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty.