Bad news for Post Office scheme subscribers as government takes THIS decision

The interest rate of the Post Office's 32-year-old scheme - Kisan Vikas Patra - has been reduced from the existing 6.9 per cent to 6.2 per cent. The lowering of the interest rate will now result in a longer time for investments to be doubled in value. 

Take, for instance, the investment that doubled earlier in 124 months will now take 138 months.

The Post Office launched the Kisan Vikas Patra in 1988, which was a savings scheme launched for long-term investment. The calculation of interest is on an annual basis. Kisan Vikas Patra, commonly known as KVP is one of the best small savings schemes offered by the Post Office. Meanwhile, for most bank FDs the interest is lower than 6%. Thus the interest rate offered by Kisan Vikas Patra makes it look more attractive.

At a minimum amount of Rs 1,000, the KVP account can be opened and thereafter in multiples of Rs 100. There is no maximum limit. A KVP can be opened at any post office.

Here are more details about Kisan Vikas Patra:

Kisan Vikas Patra: Account opening
1. Single adults can open a Kisan Vikas Patra (KVP) account. Three adults can open a joint account.
2. A guardian on behalf of a minor or on behalf of a person of an unsound mind can also open an account.
3. A minor above 10 years can get his KVP account in his or her own name.

Under this scheme, any number of accounts can be opened.

Premature closure of account:
KVP account can be prematurely closed any time before maturity, subject to the below conditions.

a) If there is the death of a person with a single account or all the account holders in a joint account.

b) On forfeiture by a pledgee being a Gazette officer

c) If court orders

d) From the date of deposit, after 2 years and 6 months

Transfer of KVP

KVP Certificate can be transferred from one person to another and from one post office to another. Certificates can be encashed after two and a half years from the date of issue.

KVP can be transferred under the following conditions-

(i) On the death of account holder to nominee/legal heirs.

(ii) On the death of account holder to joint holder(s).

(iii) On order by the court.

(iv) On pledging of account to the specified authority.