FD vs Kisan Vikas Patra: Fixed Deposit or Kisan Vikas Patra, where will you get more profit if you invest money? Know here..


Risk-averse investors invest a lot of money in small savings schemes and bank FDs. Bank FDs are the favorite investment option of Indians. A lot of money is invested in fixed deposits because of the negligible risk of sinking money and guaranteed returns. Post office small savings schemes also have almost the same features. One such small savings scheme is Kisan Vikas Patra. This is a popular savings scheme.


Axis Bank, HDFC, Union Bank, Bank of India, and State Bank of India along with many other banks recently increased the interest rates on fixed deposits (FD) for some periods. If you also intend to get a bank FD, then before that you should also know about the Kisan Vikas Patra (KVP) scheme of the post office. You should decide where you should invest money only after comparing FD and Kisan Vikas Patra.

Kisan Vikas Patra (KVP)
The interest in Kisan Vikas Patra is fixed every quarter. Currently, the government is paying interest on it at the rate of 7.5 percent. The lock-in period of KVP is two years and six months. This means that you cannot withdraw money from this scheme before two and a half years under normal circumstances. Its maturity period is 10 years. There is no maximum investment limit in this, but you have to invest at least 1 thousand rupees. The age of the investor in Kisan Vikas Patra must be at least 18 years. Apart from a single account, there is also a facility for a joint account. Minors can also join the scheme, but their parents will have to look after it.

There is no tax exemption on Kisan Vikas Patra because this scheme does not come under 80C. TDS is deducted by the government on income. In this, this certificate can be transferred from one person to another. It can also be transferred from one post office to another. The money invested in this scheme will double in 115 months i.e. 9 years and 7 months.

Bank FD
The amount deposited in a bank FD earns interest at a fixed rate which is determined at the time of opening the account. FD holders can choose to receive interest earned monthly, quarterly, half-yearly, or annually as per their choice. You can invest money in FD for a period ranging from 7 days to ten years. As far as tax exemption is concerned, tax exemption is available on tax-saving FDs of 5 years. Not on FDs of other periods. Under Section 80C of the Income Tax Act, you can claim a deduction of Rs 1.5 lakh in the total taxable income on tax-saver FDs.


At present, Axis is paying 7.10 percent interest on FDs with a tenure of two and a half years. The interest rate of the State Bank of India is 7 percent per annum. If you open an FD account for two and a half years in HDFC Bank, you will get 7 percent interest. Bank of India is giving 6.75 percent interest and Union Bank is giving 6.50 percent interest.

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