The Kisan Vikas Patra provides interest income similar to bonds and provides better liquidity by virtue of the exit option after two and half years from the date of allotment. The instrument suits those looking for a safe investment without the need for a regular income. Unlike many of the other PO scheme, the Kisan Vikas Patra does not provide any tax relief to the investor.

RATE OF RETURN:
9.5 per cent, compounded annually

MODE OF ACCOUNT-HOLDING:
The certificates will be sold to individuals and trusts only. Individual will include:
a. single adult
b. two adults in joint names
c. as adult, whether parent/guardian or not, on behalf of a minor and
d. a minor directly

Note:
KVPs are not issued to Hindu Undivided Families.
When a certificate is purchased by a person other than parent/guardian on behalf of a minor, the maturity proceeds would be payable only to the parent/guardian, if at the time of maturity the person in whose name the certificates were purchased is still a minor.

NOMINATION:
There is a provision of nomination to both single and joint holders. The nomination can be made either at the time of purchase or at any time thereafter.

INVESTMENT LIMITS:
Certificates are available in denominations of Rs.100, Rs.500, Rs.1,000, Rs.10,000 and Rs.50,000. The denomination of Rs.50,000 will be sold through head post offices only.
There is no limit on holding of these certificates. Any number of certificates can be purchased.

TENURE:
The maturity period of these certificates is seven years and three months. .

PREMATURE ENCASHMENT:
A certificate may be prematurely encashed in any of the following circumstances:
i. On the death of the holder, or any of the holders in the case of joint holders
ii. When ordered by a court of law

If the premature encashment takes place within a period of one year from the date of purchase of the certificate, only the face value of the certificate shall be payable and no interest shall be payable.

After the expiry of one year, but before the expiry of two years and six months from the date of certificate, face value of the certificate, together with simple interest calculated at the rate applicable from time to time for the completed months for which the certificate has been held, shall be payable.

If a certificate is encashed any time after expiry of two-and-a-half years, the amount payable is as specified by the Government from time to time.

ENCASHMENT AT MATURITY:
The KVP matures after seven years and three months. The certificate shall be encashed at the post office of issue. The certificate can also be encashed at any other post office on the production of the identity slip if the post-master is satisfied about the identity of the investor; otherwise, after verification from the post office of issue.

LOSS OF CERTIFICATE:
If a certificate is lost, stolen, destroyed, mutilated or defaced, a duplicate certificate can be issued on payment of a prescribed fee.

TAX CONSIDERATIONS:
The interest earned does not qualify for any tax concessions. There is no TDS on interest.