NSC vs KVP: Definition, Features, Differences and More

Looking for a secure way to grow your savings? The NSC vs KVP question often leaves investors wondering which government-backed scheme offers the best mix of guaranteed returns and low risk.

Both are available at post offices, but they cater to different financial goals. National Savings Certificate (NSC) provides tax benefits with medium-term growth, while Kisan Vikas Patra (KVP) is designed to double your investment over a longer horizon.

In this guide, we break down their features, eligibility, and investment strategies, so you can make a confident, informed choice for your money.

NSC vs KVP: A Comparative Study

National Savings Certificate Highlights

The NSC is a government-backed savings scheme offered through post offices. It is designed to promote small and medium savings among resident individuals.

NSC encourages disciplined saving by offering fixed returns over a defined period. It also serves as a tax-saving tool under Section 80C of the Income Tax Act. Some of its key features include:

1. Interest rate is reviewed quarterly.
2. Interest compounded annually, payable at maturity.
3. Transfer between post offices permitted.
4. Certificates can be pledged as collateral for loans.
5. Nomination facility available, including for minors.

Kisan Vikas Patra Highlights

KVP is a long-term savings scheme designed to double your investment over a predetermined period. Relaunched in 2014 with updated rules, KVP is available at post offices and select banks and offers guaranteed returns.

The scheme is open to individuals and trusts, but it does not provide any tax benefits under Section 80C or otherwise. KVP provides 3 types of certificates. They are:

1. Single Holder Certificate: Issued to an adult, or on behalf of a minor.
2. Joint A Certificate: Issued to two adults; payable to both jointly or the survivor.
3. Joint B Certificate: Issued to two adults; payable to either holder or survivor.

Some of its key features include:

1. Transfer between post offices allowed.
2. Can be pledged as collateral for loans.
3. Certificates are issued only in physical form.

NSC vs KVP: Eligibility Criteria & Who Should Invest

Investors often look up KVP vs NSC in post offices, as both schemes are available at any post office branch.

• Only resident Indians above 18 years can open NSC or KVP accounts.
• A guardian can apply for a child or someone of unsound mind.
• HUFs and NRIs are not eligible for either scheme.
• Trusts can invest in KVP but not NSC.

Now, let us understand who should invest in what with a  KVP vs NSC with an example:

Consider an investor with ₹50,000 invested in NSC, which grows to about ₹73,000 in 5 years with tax savings. On the other hand, investment in KVP doubles to ₹1,00,000 in roughly 10 years. Therefore:

• NSC suits salaried individuals or those seeking tax benefits under Section 80C with a medium-term horizon.
• KVP works well for conservative investors looking for guaranteed growth over a longer period. 

Which One to Choose Between NSC vs KVP?

If you are someone with medium-term financial goals, comparing KVP vs NSC interest rate, you will notice NSC offers 7.7% p.a. with Section 80C benefits.

You can invest in either of the 2 ways:

Offline: 

• Visit any authorised post office or bank
• Fill out the NSC application form
• Submit KYC documents
• Make payment via cash, cheque, or demand draft. 
• Now, collect your NSC certificate or passbook.

Online: 

• Log in to India Post Internet Banking
• Select “NSC Account under Open Account,” 
• Enter the deposit amount
• Accept the terms and submit
• Now you can download the digital receipt.

Meanwhile, if you are nearing retirement and want to ensure your savings double over a decade, a KVP with 7.5% interest is a perfect fit.

You can invest via 2 modes:

Offline: 

• Visit any authorised post office or bank
• Fill out form A (or Form A1 via agent)
• Submit KYC documents
• Make payment via cash, cheque, or demand draft. 
• Now, collect  the certificate.

Online: 

• Visit the India Post website
• Download Form A
• Fill in personal and nominee details
• Submit KYC to the post office/bank. 
• Once verified, make payment and receive the certificate physically or via email.

Comparing NSC vs KVP confirms that both are secure options to grow your wealth. Your choice depends on your financial goals, tax needs, and investment horizon.

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