How KVP works
You buy a certificate for any amount from ₹1,000 (in multiples of ₹100). At the current rate of 7.5% a year, compounded yearly, it pays back exactly double after 115 months (9 years and 7 months). There is no regular interest in between.
| You invest | You get after 115 months |
|---|---|
| ₹10,000 | ₹20,000 |
| ₹50,000 | ₹1,00,000 |
| ₹1,00,000 | ₹2,00,000 |
| ₹5,00,000 | ₹10,00,000 |
| ₹10,00,000 | ₹20,00,000 |
Cashing it early
You can encash a KVP after 2 years and 6 months. The amount follows a table published by the post office, which works out close to 7.5% compounded on the time held, counted in half-years. Before that, only on the holder’s death, a court order or forfeiture by a pledgee.
Tax
KVP gives no 80C benefit. Interest is taxable at your slab, either each year as it accrues or all at maturity. No TDS is deducted, so add it in your return yourself.
KVP or FD?
A 5-year bank FD at a similar rate pays out sooner and some count under 80C (old regime). KVP suits someone who wants a government-backed, fixed doubling with no decisions in between. For cash above ₹50,000 you need PAN, and above ₹10 lakh proof of income source.
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Questions people ask
In how many months does KVP double?
115 months at the current 7.5% rate. The period is fixed on the day you buy it.
Is KVP interest tax-free?
No. It is taxed at your slab rate, and there is no 80C deduction for the deposit.
What is the minimum and maximum in KVP?
Minimum ₹1,000, in multiples of ₹100, with no upper limit.