When you're planning for the future, two investment tools often rise to the top: Kisan Vikas Patra (KVP) and Fixed Deposits (FDs). Both are considered safe, low-risk options ideal for conservative investors. But while they share the promise of guaranteed returns, they’re designed for very different needs.
Let us decode the key differences so you can choose what suits your financial goals best—whether it’s long-term wealth creation or liquidity with predictable growth.
What is Kisan Vikas Patra (KVP)?
KVP is a government-backed savings scheme available at India Post offices. It is best known for doubling your investment in a fixed period, currently 115 months (9 years and 7 months), with an interest rate of ~7.5% compounded annually.
- Guaranteed by the Government of India
- Ideal for long-term savers
- Cannot be withdrawn before 2.5 years
- No tax benefits under Section 80C
Who it’s for: Investors looking for assured returns and who don’t need access to their funds anytime soon.
What is a fixed deposit (FD)?
FDs are one of India’s most popular investment tools, offered by banks and NBFCs. You lock in a lump sum for a chosen period and earn a fixed rate of interest.
- Flexible tenures from 7 days to 10 years
- Interest payout options – monthly, quarterly, or at maturity
- Premature withdrawal allowed (with a small penalty)
- Some FDs qualify for Section 80C tax benefits
Who it’s for: Those seeking short-to-medium-term returns with the flexibility to access funds if needed.
Want flexible tenures and predictable returns?
With Bajaj Finance Fixed Deposit, you get high interest rates of up to %$$FD-Interest-Amount-Banner-Senior$$% p.a. and flexible payout options. Open FD Account.
KVP vs FD: A Quick Comparison
| Feature | Kisan Vikas Patra (KVP) | Fixed Deposit (FD) |
| Issuer | India Post (Govt. of India) | Banks & NBFCs |
| Tenure | Fixed at 115 months | Flexible – 7 days to 10 years |
| Returns | ~7.5% p.a. (doubles in 115 months) | Varies: 6% to 8% p.a. |
| Interest payout | Only at maturity | Monthly, quarterly, or on maturity |
| Premature exit | After 2.5 years | Available with small penalty |
| Tax benefits | None | Available on 5-year tax-saving FDs |
Make your money work harderBajaj Finance offers FDs with returns up to %$$FD-Interest-Amount-Banner-Senior$$% p.a. for senior citizens—significantly higher than many traditional schemes. Check FD Rates.
Example: Rs. 1 Lakh Investment in KVP vs FD
Let’s say you invest Rs. 1,00,000:
In KVP, it will become Rs. 2,00,000 in 115 months (~9.5 years).
In an FD offering 7.50% interest, you reach the same amount in slightly under 9.5 years—but with flexibility, better liquidity, and optional periodic payouts.
Invest 100% online, from anywhere!Unlike KVP, FDs with Bajaj Finance can be booked online in minutes—no branch visits, no paperwork. Open FD Online.
