Kisan vikas patra v/s monthly income scheme: Which is better?
What's the story
Kisan Vikas Patra (KVP) and monthly income schemes are popular investment options in India. While KVP offers a fixed return over a certain period, monthly income schemes provide regular payouts. Both have their own benefits and drawbacks, making them suitable for different financial goals. Here, we look at the two options to help you make an informed investment decision.
#1
Understanding Kisan Vikas Patra
The Kisan Vikas Patra is a government-backed savings scheme that doubles your investment in a fixed tenure of 124 months. The scheme is open to all, with a minimum investment of ₹1,000. The amount can be increased in multiples of ₹500. KVP is ideal for those who want to see their money grow over time without taking much risk.
#2
Monthly income schemes explained
Monthly income schemes are investment plans that provide regular payouts every month, usually ranging from 3% to 7% of the invested amount. These are ideal for retirees or anyone looking for a steady cash flow from their investments. The principal amount remains intact and can be withdrawn at the end of the tenure.
#3
Comparing returns and liquidity
When it comes to returns, Kisan Vikas Patra guarantees a fixed return by doubling the investment amount in 124 months. Monthly income schemes, on the other hand, provide regular payouts but with variable returns depending on market conditions. In terms of liquidity, KVP has a lock-in period of 124 months before you can redeem it fully, while monthly income schemes allow partial withdrawals.
#4
Suitability based on financial goals
Choosing between Kisan Vikas Patra and monthly income schemes depends on your financial goals. If you want long-term growth without risk, KVP is a good option. For those who need regular income from their investments, monthly income schemes are better suited. Assess your needs carefully before making a decision to ensure your investment aligns with your financial objectives.