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Does withdrawing KVP amount after 30 months attract penalty?


Is there any penalty in the interest rate of Kisan Vikas Patra if redeemed after the lock-in period of 30 month.

—Rajiv

 

Kisan vikas patra (KVP) doubles your investment amount in 124 months. However, it gives an option to withdraw the money earlier but not before 30 months. After the completion of 30 months lock in period, if the investor wishes to withdraw, can do so and subject to when it is withdrawn, the withdrawal amount is determined for e.g., if you wish to redeem immediately after completion of 30 months but before 36 months then the amount repaid is 1,154 on every 1,000 of investment. Likewise, the amount to be repaid will be determined by the period you have held the investment. So, if you want to withdraw after completion of 5 years then the amount to be repaid for invested amount of 1,000 will be 1,332. The interest earned on the KVP is fully taxable as per your marginal rate of tax.

 

I am 25 years old and these are my existing SIPs which are going on. My risk profile is aggressive:

Axis Long Term Equity – 4,000; Axis Focused 25 – 3,000; HDFC index Fund – 9,500; HDFC Small Cap fund – 2,000; Mirae Asset Emerging Bluechip- 5,500; Motilal Ostwal S&P 500 index – 4,000; SBI Small Cap- 3,000; PGIM FlexiCap- 10,000.

My take home salary is 81,000, and I invest in PPF and FD’s. What percentage of salary should be invested through SIPs considering my risk profile? I am investing from last 3 years. Please suggest on my existing portfolio. Also would you recommend momentum funds? I am investing from a perspective of 15-20 years so is it advisable to go all passive considering the time frame. Would you suggest investing in small cap via Index funds? My goal is long-term wealth creation.

—Prasad

 

Your monthly investments should be a factor of surplus of income over expenses. These investments can then be spread between Mutual funds Investments as well as other investment avenues like PPF etc. As you are an aggressive investor and have a long-term investment horizon, equity can be the primary asset class and which you also have built over the last few years.

Your mutual funds are a combination of various asset classes within equity i.e. ELSS, large cap, flexi cap, focused, small cap, global funds and are good funds.

Surya Bhatia is managing partner of Asset Managers.



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