How Kisan Vikas Patra offers assured 12% returns?

Kisan Vikas Patra

I was visiting the post office the other day to enquire about the Senior Citizens Savings Scheme.

The friendly person at the desk mentioned that since the rate is going to be revised lower from April 1, 2016 there has been a huge inflow recently into the scheme.

I agreed with him and said “Of course, everyone wants to lock in at the higher rate.”

“Not just that even Kisan Vikas Patra or KVP has witnessed a huge surge in investments, to the tune of several crores.”, he mentioned with a delight.

I was curious and asked why would that be? Kisan Vikas Patra was not even an option I considered for investments.

“Simple na, it doubles your investment in just 100 months. Who wouldn’t go for a thing that offers 12% assured returns.”

Now I was taken aback. 12% assured returns on Kisan Vikas Patra? This is not what I know? Or is this a new form of KVP that has been introduced.

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