Every individual has some dreams and in order to achieve those, we often take short cuts in life. But these shortcuts should be analysed properly to make it work or else it can be disastrous. Mr Dinesh is a small business man in Kolkata. He was a happy man with a lovely wife and two beautiful kids. In today’s world if you have steady income, lovely family and a beautiful house then you may consider yourself lucky. Dinesh had some liquid cash with him which he always wanted to invest and earn some interest on them, but due to the high volatility, less knowledge of financial market and tiresome formalities, he always took a step back from investing in the financial products available.
One day, one close friend of Dinesh came to visit him and he told him about the scheme which he called a small chit fund, in which the money gets double in 3 years. He further cleared his point by giving example that if Dinesh invest Rs 200000 now then he can expect assured Rs 400000 by the end of 3 years hence earning an interest rate of 26% which is far more than the market. The best part which grabbed Dinesh’s attention was that no formalities are needed and only an application form needs to be filled. Well this was enough for Dinesh and he invested Rs 5 Lakhs into it.very individual has some dreams and in order to achieve those, we often take short cuts in life. But these shortcuts should be analysed properly to make it work or else it can be disastrous. Mr Dinesh is a small business man in Kolkata. He was a happy man with a lovely wife and two beautiful kids. In today’s world if you have steady income, lovely family and a beautiful house then you may consider yourself lucky. Dinesh had some liquid cash with him which he always wanted to invest and earn some interest on them, but due to the high volatility, less knowledge of financial market and tiresome formalities, he always took a step back from investing in the financial products available.
What happened next, was the biggest nightmare of Dinesh’s life. The fund in which he had invested was bogus or a Ponzi scheme, which later came into the news and the friend who has introduced this to Dinesh was in a jail. All his dreams and expectation have shattered and he got disheartened.
In India many incidents like this has turned people’s life into a tragedy. In order to eradicate it and to give the citizens of India a safe and secure small financial scheme, to park their liquid money and to earn some good returns on that, Government of India has re-introduced Kisan Vikas Patra in the year 2014 under the stewardship of our Hon. Finance Minister Mr Arun Jaitely. Though this scheme was first came into light in year 1988 but was discontinued in 2011 due to the threats that it can lead to money laundering and can be misused. Now the government has re-launched it with new guidelines. Although the target is semi-urban to rural areas, but people from urban areas can also invest in this.
Kisan Vikas Patra is a small saving scheme which enables the Indian nationals to channelize their household savings which is safe and guarantees to double the invested amount in 112 months i.e. (8 Years and 4 months) which indirectly helps in government funding towards the benefit of country as a whole. Your money gets mature after 112 months and the interest rate for the same is 7.7% for the FY 2016-17. However interest rates are likely to change as per the government policies. Other details of the scheme are explained in details in this article and you can also contact your Personal Financial Planner.
Scheme Applicability
This scheme is applicable for any person who is a Resident of India except Hindu Undivided Family. An individual can apply for this scheme for himself/herself, or on behalf of the minor. Two adults can also obtain this certificate on joint basis. Different numbers of certificate can be issued for different holders.
Where to look for and the criteria for investment
You can visit to your nearest post office and can obtain Kisan Vikas Patra certificate by filling an application form with your photograph on it. You can pay the amount which you want to invest in it. The payment can be made through cash, cheque or by a demand draft. The Certificate is issued as soon as the payment is made. Minimum investment which is permitted in this scheme is Rs 1000. The certificate is available in denomination of Rs 1000,5000,10000 and 50000. You can choose your suitable denomination. You can invest up to any amount which you like as there is no maximum limit fixed for this scheme. But yes, as I have told you before in this article that this programme has re-launched with new guidelines, hence, if you invest an amount above Rs 50000 then you have to submit your PAN Card details along with your application form and need to disclose your source of income as the amount which you will get will be taxable.
Well if you are a responsible citizen then this point should not worry you.
Maturity, interest rate and Lock in (If any)
Let’s understand this point with an example
Suppose Mr A invest Rs 100000 today, then his money will get matured after 9 years 4 months from the date of the issue of certificate at the interest rate of 7.7% p.a. annually. So Mr A will get 199839 at the maturity. So you can see that Rs 100000 is the principal which he has invested and Rs 99839 is the income which he has earned on his principal.
Your money is locked in for at least 2 and a half years i.e. 30 months. After that if need arises you can withdraw your invested amount. Prior to this, you cannot withdraw your investment under this scheme. However in case of death of the holder entire investment and the interest accrued can be withdrawn and will be available to the nominee.
Other Benefits
Kisan Vikas Patra certificate can be used as collateral in case if you want to get a loan against it. The institutions from which loan can be raised are Housing Company Limited authorised by National Housing Bank and notified by Central Government agency, RBI and any scheduled banks, cooperative banks and from any local authority. Please note that a minor cannot avail the loan facility. Apart from this the post office can be transferred freely.
So you must have analysed by now that our government has provided you many secure financial way to channelize your income. It is always advisable that don’t let your greed come in the way when it comes to financial security of yourself and your family. Always use the sources which are trustworthy and backed by the government. Shortcut can become dangerous. So please be careful and don’t be another ‘Dinesh’
