According to media reports, after discontinuing the Kisan Vikas Patra in 2011, the government has recently re-launched it offering 8.67% interest and doubling the principal with a maturity period of 100 months.
Though the investment matures in eight years and four months, you can redeem it after the lock-in period of two years and six months and thereafter in blocks of six months by
getting a predetermined maturity value.
It will be available in denominations of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. Further, there is no cap on the amount that can be invested.
The plan is to initially sell the certificates through post offices, which will be later available at designated branches of public sector banks.
The certificates can be bought singly or jointly and can be transferred to any person/persons multiple times. The facility of transfer from one post office to another anywhere in India is also available. One can also avail of a loan against the certificates.
However, before you jump on the investment bandwagon it is worth noting that the interest earned will be taxable, although, tax will not be deducted at source. The investment is also eligible for income tax deduction.
However, if you are looking a better return, with easy liquidity, then the bank fixed deposits are a better option. If holding period is not a concern, then a better long-term investment will be the Public Provident Fund, where the interest, final sum and the deductions are all tax free.
