Kisan Vikas Patra (KVP) Calculator

How Does the KVP Maturity Calculator Work?

 

The KVP calculator works on the principal of compounding where the formula used to compute returns is the same as the formula of compound interest.

A = P (1 + r/n)^(nt)

Here,

Parameters

Description

A

Maturity Amount

P

Principal or the Initial Amount

r

Rate of Interest

t

Time Period of Investment

n

Number of Times Interest is Compounded within the Time Period

Before delving into various calculation metrics applicable in a KVP calculator, consider the following example. This will make it easier for you to understand the metrics mentioned later in this section.

 

Example: Mr A invested an amount of ₹1 lakhs in KVP on 18th August 2021.

 

An individual needs to input values corresponding to the following calculation metrics in the KVP calculator:

Calculation Metrics

Details

Investment Amount

Investment amount refers to the amount that an individual invests in this scheme. As per the above example, the investment amount will be ₹1 lakhs.

Investment Date

Investment date can be defined as the date on which an individual carries out the investment in the KVP scheme. In the above example, the investment date is '18/08/2021'.

 

After entering both the data into the specified fields of a KVP calculator, the maturity amount is computed. Thereafter, a user would be presented with the maturity amount, maturity date, and the total amount of interest.

Note that in case of KVP, the interest is compounded annually. Presently, the rate of interest on offer is 6.9%. There is no fixed time period for KVP. With this present rate of interest prevalent, the maturity date will be of 124 months.

 

With these basics out of our way, let’s now discuss how to calculate KVP interest.

Rate of Interest Table for KVP Scheme

 

Depending on the updates by the Ministry of Finance, the rate of interest for this scheme varies periodically. The current rate of interest applicable to this scheme is 6.9% p.a., which can even double one’s investment in a period of 124 months.

 

The table below indicates the fluctuations in this interest rate over a period of time:

 

Time Period

Rate of Interest

Q1 FY 2020-2021

6.9%

Q4 FY 2019-2020

7.6%

Q2 FY 2019–2020

7.6%

Q1 FY 2019–2020

7.7%

Q4 FY 2018-2019

7.7%

Q3 FY 2018-2019

7.7%

Q2 FY 2018-2019

7.3%

Q1 FY 2018-2019

7.3%

Therefore, as the current interest rate is 6.9%, a KVP interest rate calculator will consider this rate for calculating one’s earned interest in Q1 FY 2020-2021.

 

By now, you must have gained a fundamental understanding of the KVP calculator and its various aspects. So, if you are looking to invest in this scheme, go ahead and utilise this tool to your benefit.

Frequently Asked Questions