This article compares the features of National Savings Certificate (NSC) and Kisan Vikas Patra (KVP)
National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) are very popular investment avenues among investors seeking safety of capital. But since both these are very similar, one can get confused while choosing between the two.
Here is a comparison of the features of NSC and KVP, to help you take an informed decision while investing.
(Want to know about saving income tax? Please read “Saving Income Tax – Understanding Section 80C Deductions“)
| Feature | National Savings Certificate (NSC) | Kisan Vikas Patra (KVP) |
| Issued By | Department of Post, Government of India | Department of Post, Government of India |
| Can be bought from | Authorized post offices | Authorized post offices |
| Risk Category | Virtually risk free | Virtually risk free |
| Type of interest | Fixed | Fixed |
| Interest Rate | 8% | 8.25% |
| Maturity | 6 Years | 8 Years and 7 Months |
| Amount invested qualifies under Sec 80C of the Income Tax Act (IT Act)? | Yes | No |
| Interest earned qualifies under Sec 80C of the Income Tax Act (IT Act)? | Yes | No |
| At maturity, Rs. 100 becomes | Rs. 160.10 | Rs. 200 |
| Minimum investment | Rs. 100 | Rs. 100 |
| Maximum investment | No limit | No limit |
| Other features | Interest is reinvested, and is paid along with the principal at the time of maturity | Investment doubles at maturity |
| For more information, see: | National Savings Certificate (NSC) | Kisan Vikas Patra (KVP) |
Thus, we see that the major differences between National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) are the tenure of investment, the rate of return and their tax treatment.
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Hi,
I definitely understand your concern.
But again – what is the worst crisis that has been faced by the financial markets in modern times? The great depression of 1929-30, right?
And how long did it last? The markets recovered and were normal in 4-5 years!
When we are in the middle of the crisis, we feel that the world is going to end. But the fact remains that all of us (and the population would keep increasing!) would need food, houses, transport, entertainment….
So, some day, things would look up. Patience is the key here.
One good way is to think as if you have invested in a 5 year bank FD. Would you keep looking at its value everyday?
No! Similarly, I would encourage you to not look at daily fluctuations in the stock prices. Its a little difficult, but not impossible!
I read your article, but can it be depended upon on a world crisis like the present one?
Thank you for creating some patience for long term.
with best wishes
vvrao