Your father opened one of these in 1999. He has been telling you for years that it doubles your money. He is right — and he is also leaving out the most important part of the story.
Kisan Vikas Patra (KVP) is a small savings scheme from the Department of Posts. You put in money today. After a fixed number of months, the government pays you back exactly double. That is the whole promise.
At the rate notified right now, that “fixed number” is 115 months. Nine years and seven months.
That is a long time to lock away money. So let us look at what KVP is, how the doubling number is actually calculated, and — the part most articles skip — who this scheme is really not for.
First, the name is a lie
The scheme is called Kisan Vikas Patra. “Kisan” means farmer. That is the first impression you get.
Nothing in the scheme requires you to be a farmer. There is no land test. No income proof. No ration card check. Any Indian citizen aged 10 or above can open one.
That is the honest first thing to know: KVP is not a farming scheme. It is a government-backed fixed-return deposit with a double-at-maturity promise. The name is a leftover from 1999, and it still misleads people every single day.
How the doubling period is worked out
Here is the bit that makes KVP different from every other savings product in India.
KVP does not compound your money and hope for the best. The government notifies a rate, and that rate determines a fixed maturity period. Your money doubles on that date. Full stop.
The scheme rules say it plainly: the maturity period “shall be determined on the rate of interest applicable at the time of opening the account.” (Kisan Vikas Patra Scheme, 2019, paragraph 5(2), notified vide G.S.R. 920(E) dated 12 December 2019.)
So the rate is fixed when you open the account. If the government cuts the rate next quarter, your account does not change. Your 115 months stays 115 months.
The current notified rate is 7.5% per annum, compounded annually — that is the rate for the quarter from 1 October 2026 to 31 December 2026, notified on 30 September 2026. The National Savings Institute lists it as “7.5 (will mature in 115 months).” Rates are next revised on 31 December 2026.
The maths behind 115 months
Let us do this ourselves. You do not need the table. You need one formula.
If a rate r doubles your money in n years, then:
(1 + r)ⁿ = 2
Take the natural log of both sides:
n = ln(2) / ln(1 + r)
Now plug in r = 7.5% = 0.075:
n = ln(2) / ln(1.075)
n = 0.6931 / 0.0723
n = 9.584 years
Now convert years to months:
9.584 × 12 = 115.0 months
That is 115 months. Nine years and seven months. The notified number falls straight out of the arithmetic. Nobody decided it by committee taste.
What your money does along the way
Say you invest ₹1,00,000 at 7.5% compounded annually:
| Year | Value (approx) |
|---|---|
| 1 | ₹1,07,500 |
| 3 | ₹1,24,230 |
| 5 | ₹1,43,563 |
| 7 | ₹1,65,905 |
| 9 | ₹1,91,724 |
At 115 months the account pays ₹2,00,000. Your ₹1,00,000 becomes ₹2,00,000.
Notice something important in that table. You do not get anything credited every quarter or every month. KVP is a certificate, not a transactional account. The money sits and grows, and the payout comes at maturity.
Why the rate moves with NSC
Small savings rates in India are not set by the market. The Ministry of Finance, Department of Economic Affairs, notifies them every quarter — PPF, Sukanya Samriddhi, Senior Citizens Savings Scheme, National Savings Certificate, KVP, Post Office Time Deposits, all together, in one quarterly exercise.
For the current quarter, that means KVP at 7.5%, NSC at 7.7%, PPF at 7.1%, and the 1-year Post Office Time Deposit at 6.9%.
The rates move in a band. They are benchmarked against government borrowing costs, and they are held steady for long stretches because small savings rates are politically visible. But there is no fixed formula tying KVP to NSC — the government sets each rate as a policy call, and KVP has sat slightly below NSC in recent quarters.
Practically, this means: do not expect KVP’s rate to fall when bank deposit rates fall quickly. Bank FDs reprice in weeks. KVP does not reprice at all once you open the account.
That stability is the real feature. Not the return.
Premature encashment: the good news and the bad news
Here is the good news. Unlike most fixed deposits, KVP lets you encash early.
You can encash after 2 years and 6 months from the date of opening. That is unconditional. You do not have to prove medical emergency or anything else. You just apply in Form-3 at the post office.
Before 2 years 6 months, closure is only allowed in three cases: death of the account holder, forfeiture by the pledgee, or a court order.
What you actually get back
Here is the bad news. The early payout is fixed in a notified table, and the table is brutal in the middle years.
For an account opened on or after 1 April 2023 (KVP Table-5, G.S.R. 324(E) dated 27 April 2023), on a ₹1,000 investment:
| Period held | Amount payable |
|---|---|
| 2.5 to less than 3 years | ₹1,171 |
| 4 to less than 4.5 years | ₹1,286 |
| 6 to less than 6.5 years | ₹1,459 |
| 8.5 to less than 9 years | ₹1,708 |
| 9.5 years to maturity | ₹1,819 |
| At maturity | ₹2,000 |
Read that middle again. Hold for six years, close at ₹1,459 on ₹1,000. You lose ₹541 of your doubling. That is not a rounding difference. That is most of the return gone.
The lesson: KVP’s early exit is a safety valve, not a strategy. If you think you might need the money in year four, KVP is the wrong instrument. Put the money in an FD or a short-duration fund instead.
If you close before 2 years 6 months under one of the three allowed grounds, you get principal plus simple interest at the Post Office Savings Account rate, for complete months only.
Can you hold more than one KVP?
Yes. This one surprises people, because so many other small savings schemes cap you at one.
Paragraph 4(2) of the scheme sets no maximum deposit limit — not for an account, and not across all your accounts. Paragraph 4(3) is blunter still: “An individual may open any number of accounts.”
So if you want ₹2,00,000 parked in KVP, open two ₹1,00,000 accounts. Each gets its own doubling date, its own notified rate locked at opening, and its own premature closure table. There is no rule forcing you into a single account, and no ceiling on how much you can put in.
The one account rule people often mix this up with is the PPF’s — only one PPF per person is permitted. KVP has no such restriction.
Pledging: getting a loan without breaking the account
You do not have to break the KVP to borrow against it.
The scheme rules (paragraph 7) let you pledge or transfer an account as security. You apply in Form-4 with an acceptance letter from the bank. The authorised officer endorses the account with “Transferred as security to …” and the pledgee is treated as the depositor until it comes back.
The transferee must be one of a limited list: the President of India or a Governor, the Reserve Bank of India, a Scheduled Bank or Cooperative Society, a public or private corporation or Government company, a local authority, or a housing finance company approved by the National Housing Bank.
Note what is not in the scheme rules: any notified percentage for how much you can borrow. The loan-to-value ratio is the lender’s policy, not a KVP rule. Banks price the loan off the KVP rate — for example, Bank of Baroda lists KVP advances at 1.25% over the KVP rate. So ask your bank for their current terms instead of trusting a number from a blog.
Kisan Vikas Patra is genuinely useful here. It is government-backed, non-callable, and predictable. That combination is rare in India.
What happens when you die
This part is well designed, and few people know it.
For a single account: the deposit goes to your nominee if you made a nomination, otherwise to your legal heirs.
If there are not more than three surviving nominees or legal heirs, they can choose to continue the account and collect the doubled amount at maturity as if they had opened it themselves. If they do not want that, the account closes and they get principal plus interest as per the closure table.
For a joint account: if one holder dies, the survivor or survivors become the owner outright. They can continue or close.
One caution. Make your nomination. Rule 14(1) of the Government Savings Promotion General Rules, 2018 (G.S.R. 1003(E) dated 5 October 2018, as amended) lets you nominate “one or more individuals as nominee but not exceeding four individuals.” You also record in the form whether the nominee receives the money as a beneficiary with absolute ownership, or as a trustee for the legal heirs. Nomination as absolute owner is far cleaner than a will, because it bypasses probate and legal heir proving. It can be varied later by a fresh Form 10.
The tax reality nobody mentions first
KVP interest is fully taxable. The interest exemption in Schedule II covers savings certificates and deposits notified by the Central Government, and KVP is not one of the notified entries, so no exemption applies to it. There is also no deduction on the principal: section 123 of the Income-tax Act, 2025, read with Schedule XV, lists provident fund contributions, notified security or deposit schemes such as PPF and SSY, and savings certificates such as NSC. KVP is not in that list.
Declare the interest under “Income from other sources,” usually on an accrual basis year by year even though you receive it at maturity. India Post does not deduct TDS on KVP maturity, so nothing comes off automatically.
On section 153 of the Income-tax Act, 2025, for senior citizens: the section allows a ₹50,000 deduction on interest from deposits with a banking company, a co-operative banking society, or a Post Office as defined in the Post Office Act, 2023. Post offices are named explicitly, so do not assume post office interest is outside the deduction.
Whether KVP interest specifically qualifies is the open question, and the weight of expert opinion leans firmly against it. When the Economic Times put this to tax practitioners in 2023, three of five said no — the strongest reasoning being that KVP is administratively a bond-like certificate rather than a deposit, which is why it was excluded from the deduction in the first place. Two said yes. No notification has settled the point since.
Treat this as going against the grain. If you claim it, be ready to defend it.
Who this scheme is and is not for
Let us be blunt.
KVP is a good fit if you want a guaranteed return with zero market risk, you have money you genuinely will not need for ten years, you want a specific known maturity date, or you want to use it as collateral for a loan while keeping the account alive.
KVP is a poor fit if you are in the 30% tax bracket. After tax, your effective return on 7.5% is roughly 5.25% pre-inflation. A good debt fund can beat that after tax with near-zero lock-in. If you are in the 5% or 20% bracket, the calculation is more forgiving.
KVP is the wrong fit if you need the money before year ten. Not “might need” — need. The closure table will take a large bite.
KVP is not for farmers specifically, despite the name. It is not for anyone expecting a high return either. Seven and a half percent is a slow, steady, low-risk number, and it should be judged that way.
KVP is also not for a first-time investor who needs to check the mechanics. You will want your passbook entries and closure details to hand. The passbook download and password guide covers that — it includes KVP in the schemes you can view online through POSB ePassbook, IPPB mobile banking, and Dak Sewa.
What to do today
Pick one number and write it down. That is the single most useful thing.
Decide how much money you can put in KVP and leave untouched for ten years. If the answer is a real, comfortable number, open the account at your nearest post office or authorised bank with ₹1,000 and multiples of ₹100. There is no maximum limit, and no restriction on how many accounts you may hold — so split it across accounts if that gives you more than one maturity date to aim at.
If the honest answer is “I might need this in four years”, do not open one. Put that money somewhere you can reach.
Key takeaways
- The name is misleading. No farmer status is needed, and none of the scheme’s benefits are farming-specific.
- The 7.5% rate and 115-month period are both notified for the quarter ending 31 December 2026. The 115 months is just ln(2) / ln(1.075) × 12 — arithmetic, not marketing.
- Your rate and term are locked at opening. Later rate changes do not touch your account.
- You can encash unconditionally after 2 years 6 months, but the notified table pays far less than the compounding suggests in the early and middle years.
- No ceiling on how much you can put in, and no cap on how many KVP accounts you may hold. Unlike PPF, KVP has no one-account rule.
- Pledging lets you borrow without closing the account. The loan percentage is the bank’s policy, not a scheme rule.
- On death, a nominee or up to three legal heirs can continue the account and collect the doubled amount. Nominate up to four people, as absolute owner rather than trustee.
- Interest is fully taxable, no deduction on the principal, no TDS, and the senior-citizen interest deduction leans against KVP on the weight of expert opinion.
Disclaimer: This article is for general information only and is not financial advice. Small savings rates change every quarter — the next revision is due on 31 December 2026 — so always check the current rate with India Post or at nsiindia.gov.in before you invest.
Frequently asked questions
How long does it take a Kisan Vikas Patra to double?
115 months, which is nine years and seven months, at the 7.5% rate notified for the quarter from 1 October to 31 December 2026. The period is fixed by paragraph 5(2) of the scheme at the rate applicable when the account is opened, so a later rate change does not alter it. 115 months is simply ln(2) divided by ln(1.075), times twelve.
Is KVP really only for farmers?
No. There is no land test, no income proof and no ration card check. Any Indian citizen aged 10 or above can open one, and nothing in the scheme's benefits is farming-specific.
Can I open more than one KVP account?
Yes. Paragraph 4(2) sets no maximum deposit limit and paragraph 4(3) states that an individual may open any number of accounts. Unlike PPF, KVP has no one-account rule.
Can I encash a KVP early?
Yes, unconditionally, after two years and six months, on an application in Form-3. Before that it is allowed only on the death of the account holder, forfeiture by a pledgee who is a Gazetted Officer, or a court order. The notified table pays far less than compounding would suggest in the middle years.
Can a KVP be transferred to another person?
Yes, in the four cases set out in paragraph 8 of the scheme: on the death of the account holder, to the legal heirs or nominees; on a court order; on pledging under paragraph 7; and on the death of one joint holder, to the survivor. Where the transferee is eligible to open an account under the scheme, they may continue it and receive the doubled amount at maturity.
Is KVP interest tax-free?
No. The Schedule II interest exemption covers notified savings certificates and deposits, and KVP is not among them, so the interest is fully taxable. There is also no deduction on the principal under section 123 read with Schedule XV of the Income-tax Act, 2025, and India Post does not deduct TDS at maturity.
Sources
– Kisan Vikas Patra Scheme, 2019, G.S.R. 920(E), 12 December 2019, as amended by G.S.R. 283(E) dated 5 May 2020 — paragraphs 4(2), 4(3), 5(2), 6, 7 and 8
– G.S.R. 324(E), 27 April 2023, premature closure tables for accounts opened on or after 1 April 2023
– Government Savings Promotion General Rules, 2018, G.S.R. 1003(E), 5 October 2018, rule 14(1) and 14(3)
– Ministry of Finance small savings interest rate notification, 30 September 2026, quarter 1 October to 31 December 2026
– Section 123 and Schedule XV, Income-tax Act, 2025, Income Tax Department portal
– Section 153, Income-tax Act, 2025, Income Tax Department portal
– Section 11(1) read with Schedule II, entry 11, Income-tax Act, 2025
Disclosure
This is general information about a government scheme, not personal advice. Rules and rates change. Confirm the position for your own account with your post office or bank before you act. We do not recommend specific schemes or securities. Past rates do not predict future rates.
Last checked: 2 October 2026
