Post Office scheme: In order to get guaranteed returns in the long term, post offices in India have launched various schemes an Individual can invest in. Some of these schemes provide more interest to investors in comparison to what fixed deposits (FDs) of many banks has to offer.
Post Office Public Provident Fund (PPF), Sukanya Samriddhi Yojana and Senior Citizen Savings Scheme (SCSS) are some of the schemes that offers more than 7 per cent returns. Whereas, in another popular scheme Kisan Vikas Patra (KVP), one can facilitate to 6.9 percent compound interest annually. Read further to know what is special in the Kisan Vikas Patra (KVP) scheme.
Kisan Vikas Patra (KVP) Scheme:
In this scheme, investors can have their deposited amount doubled in 10 years and 4 months (124 months) at the prevailing interest rate. For example, if one starts a KVP deposit of Rs 1 lakh today, they will receive and increased amount of Rs. 2 lakh in the next 124 months.
The current interest rate on KVP deposits is 6.9% which is higher than that of many bank fixed deposits. Take a look at some of the key features of this small savings scheme:
- Minimum and Maximum Deposit: In KVP, the minimum deposit should be of Rs 1000 and then according to one’s will but in multiples of Rs 100. There is no maximum limit for investment under this scheme. Also, one can open as many KVP accounts as desired.
- Maturity: The amount deposited under KVP matures as per the period prescribed by the Ministry of Finance from time to time, i.e. 124 months. However, premature withdrawal is allowed in special circumstances.
- Transfer : In case of death of the account holder, the KVP account can be transferred to the mentioned nominee/legal heir of the person/to the joint holder of the account. But it requires Court orders and mortgage of the account will be transferred to the Specified Authority.
Why Should One Invest In Small Savings Scheme?
Post office provided small savings schemes like KVP offers guaranteed returns to investors, especially those who cannot afford to lose their hard earned money. Apart from this, as compared banks, post office schemes like PPF, SSY and SCSS OFFER higher interest rates and tax benefits.
On the other hand, if you are one who isn’t afraid of taking risks, investing in market-oriented schemes like mutual funds and stocks could also benefit you. These plans offer higher returns and double the money much faster than in the post office scheme. However, it is advisable to do thorough research and consult a professional financial advisor, before investing in mutual funds or stocks.