Rate of interest earned upon Kisan Vikas Patra (KVP) varies depending on total year invested. Amount invested in Kisan Vikas Patra (KVP) dobules in 9 year and 2 months making total interest rate 7.8% (Effective from 1-April-2016).
Let's understand this by taking an example: Mr.X has invested 1 lac rupees in Kisan Vikas Patra (KVP) in Month of november 2016. In this case Mr.X will receive total sum of rupees 2 lac after 86 momths after date of investment.
One thing to note here is that investments made under Kisan Vikas Patra (KVP) does not give any tax benefit, as it does not fall under section 80-C. Also return earned from Kisan Vikas Patra (KVP) is also taxable.
Pre-mature withdrawal of Kisan Vikas Patra (KVP)
Pre-mature withdrawal of Kisan Vikas Patra (KVP) is possible after 2.5 years. And amount also gets paid accordingly. If we calculare pre-mature withdrawal plan for Mr.X who has invested 1lac rupees, it looks as below.
| Investment Period | Amount Payable (Interest Included) |
| Less than 1 year | 100000 (No Interest wld be paid) |
| Min: 2.5 years, Max: 3 years | 120100 |
| Min: 3 years, Max: 3.5 years | 124600 |
| Min: 3.5 years, Max 4 years | 129300 |
| Min: 4 years, Max 4.5 years | 134100 |
| Min 4.5 years, Max 5 years | 139100 |
| Min: 5 years, Max 5.5 years | 144300 |
| Min: 5.5 years, Max 6 years | 149700 |
| Min: 6 years, Max 6.5 years | 155300 |
| Min: 6.5 years, Max 7 years | 161100 |
| Min: 7 years, Max 7.5 years | 167100 |
| Min: 7.5 years, Max 8 years | 173300 |
| Min: 8 years, Max 8 years and 7 months | 179800 |
| On Maturity | 200000 |
I hope you'll get some ideas of interest rates for Kisan Vikas Patra (KVP). Thanks for reading.