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Features
- Investment in KVP can be made through Post offices.
- Present tenure of investment is 8 years 7 months, investment become double
- KVP are issued in denomination of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10000.
- Face value and maturity value mentioned in each certificate
- Minimum investment allowed is Rs 100, there is no maximum limit
- Can be held singly or jointly
- Nomination facility available
- Transferable to various post offices
Advantages/Disadvantages - Safety: Safe investment as KVP are issued by Govt of India
- Liquidity: Facility of encashment from 2 and ½ years period. Can be pledged to obtain loans from banks
- Capital Appreciation: No capital appreciation. At maturity, the total of principal and cumulative interest are paid to the holder.
- Returns: Preset rate of interest 8.5%, so Rs 10000 become Rs 20000 at the end of 8 years and 7 months. Interest compounded every six month, however, the rate of interest will not change throughout the investment period. Maturity proceeds not drawn are eligible for saving account interest for a maximum of two years from date of maturity.
- Tax benefits: Wealth tax exempt. No exemption for income tax.
Live Examples - Present rate of interest 8.5%, compounded every six month.
- If you buy KVP of Rs 1000 today say, on April 1, 2009, you will get Rs 2000 on October 31, 2017 as maturity proceeds.
- You have to pay income tax on the Rs 1000 earned by you.
Documents and other requirements - Prescribed application available in post offices
- Application for purchase of KVP
- Application for issue of duplicate certificate
Problems and Solutions - Death before maturity- In case of death of the holder before maturity of the certificate, the same is closed and the proceeds are given to the nominee.
- Lost, stolen, destroyed, etc- Holder should apply for duplicate certificate in a prescribed form in case lost/stolen/destroyed certificates. The holder may have to furnish a indemnity bond, approach the post office for the procedure to be followed.
Complaints - 1st recourse- Complaint can be addressed to the Post Master from where the KVP have been purchased.
- 2nd recourse- National Savings Institute (NSI) is an institute working under Union Ministry of Finance, Department of Economic Affairs, Govt of India which is entrusted with task of mobilizing small savings, providing to the ministry for redressal of information queries and grievances
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