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FMD Offset Account

Farm Management Deposit Offset Account

Rural Bank is the first Australian bank to offer a Farm Management Deposit Offset Account that works in your best interest.

Just as seasons and prices fluctuate, so does farm income. To better manage risk and strengthen your financial future, our new FMD Offset Account works hard to give you more options to manage your farm finances.

This means you can now use your FMD balance to offset a farm term loan, which may reduce your interest costs. 

If you’re an eligible primary producer with an eligible Rural Bank Variable Rate Term Loan, our Farm Management Deposit (FMD) Offset Account can help you manage your exposure to natural disasters, climate and market variability by allowing you to set aside pre-tax income from primary production in years of high income which can be drawn on in future years when most needed. Plus the capital held in an FMD Offset Account can assist to reduce your primary production business funding costs.

Additional benefits of the Rural Bank FMD Offset Account include:

  • 100% of the FMD Offset Account balance will be offset against the linked Rural Bank Variable Rate Loan
  • No notice period if access to FMD funds is required
  • One low upfront linkage fee per FMD Offset Account

Primary producers should be aware that using your FMDs to offset your farm business debt may have wider taxation implications, such as reducing the level of tax deduction that can be claimed against the interest expenses on farm business loans. It is highly recommended you speak to the Australian Taxation Office or a suitably qualified financial adviser or accountant when considering your options.

FMD Offset eligibility criteria

Some of the key requirements are summarised below.  For further information on FMD Offset eligibility criteria and conditions refer to the Australian Government Department of Agriculture and Water Resources and also the Australian Taxation Office.

  • The FMD owner must be an individual carrying on a primary production business in Australia with an off-farm taxable income of less than $100,000 in the financial year they make the deposit.
  • The FMD Offset Account can only be opened in the name of one individual and on behalf of only one individual.
  • The total of all FMD’s held in the FMD owner’s name (with Rural Bank and other FMD providers) must not exceed $800,000.
  • An FMD must be deposited for a minimum of 12 months to receive or retain any applicable taxation benefit unless the primary producer
  • Has received primary producer Category C recovery assistance following a natural disaster under the National Disaster and Recovery Arrangements; or
  • Is affected by a rainfall deficiency (severe drought) for at least six consecutive months.

Specific FMD Offset legislative criteria

  • The FMD Offset Account can only be linked to an eligible loan of the FMD owner or their partnership (excludes companies, trusts or a person who is not the FMD owner) where the linked loan is used wholly for the purpose of the primary production business.
  • If the FMD Offset Account is linked to a loan that does not wholly relate to a primary production business that the FMD owner (or a partnership of which the owner is a partner) carries on, the FMD owner is liable to an administrative penalty of up to 200% of the offset benefit.
  • An FMD Offset Account can only be linked to one loan at any particular time.

Specific FMD Offset Rural Bank criteria

Clients must seek independent financial advice to ensure they meet the legislative requirements and understand their obligations to comply and the applicable penalties for non-compliance and wider taxation implications.

A Rural Bank FMD Offset Account can only be linked to an eligible Rural Bank Variable Rate Term Loan where the loan purpose must be wholly related to a primary product business carried on by the FMD owner either directly as a sole trader or through a partnership.

The combined value of Rural Bank FMD Offset Accounts may not exceed the lower of (i) 50% of the Borrower's Term Loans’ facility limit; or (ii) $1,000,000 per Borrower; without agreement from Rural Bank.

Note, an FMD Offset Linkage fee will apply for each FMD Offset Account that is linked to an eligible Rural Bank Term Loan as outlined in our Schedule of Fees and Charges.

How do I apply / find out more?

Related documents

Farm Management Deposit interest rates (in branch/phone)

Fixed rate FMD - Interest at maturity

$5,000 to $49,999

3 months - 2.20%
6 months - 2.35%

$50,000 to $399,999

3 months - 2.20%
6 months - 2.35%

$400,000 to $800,000

3 months - 2.20%
6 months - 2.35%

Fixed rate FMD - Interest paid yearly

$5,000 to $49,999

12 months - 2.50%
24 months - 2.65%

$50,000 to $399,999

12 months - 2.50%
24 months - 2.65%

$400,000 to $800,000

12 months - 2.50%
24 months - 2.65%

Fixed Rate FMD - Interest paid quarterly

$5,000 to $49,999

12 months - 2.35%
24 months - 2.50%

$50,000 to $399,999

12 months - 2.35%
24 months - 2.50%

$400,000 to $800,000

12 months - 2.35%
24 months - 2.50%

Fixed Rate FMD - Interest paid monthly

$5,000 to $49,999

12 months - 2.30%
24 months - 2.45%

$50,000 to $399,999

12 months - 2.30%
24 months - 2.45%

$400,000 to $800,000

12 months - 2.30%
24 months - 2.45%

Interest rates quoted on a per annum basis and subject to change without notice. Interest is calculated daily and paid or credited as specified. Minimum deposit $5,000. Maximum aggregate balance is $800,000 for all FMDs. No additional deposits will be accepted on the Fixed Rate FMD product. Other eligibility criteria apply.

Variable Rate FMD - Interest paid yearly

$1,000 to $49,999

0.75%

$50,000 to $399,999

1.25%

$400,000 to $800,000

1.25%

Interest rates quoted on a per annum basis and subject to change without notice. Interest is calculated daily and paid and credited as specified. Minimum deposit $1,000. Maximum aggregate balance is $800,000 for all FMDs. Other eligibility criteria apply.

FMD Offset Account – Discounted Offset Rate

 

The following interest rate is used to calculate the discounted interest on eligible Term Loan accounts that are linked to a Rural Bank FMD Offset Account. For more information refer to clause 22.4 of the Rural Bank Banking Accounts Terms and Conditions.

Offset Type

Full Offset*

Interest Rate

0.00%

*The term loan being offset must have a variable rate and the purpose for which must relate wholly to a primary production business carried on by the FMD owner either directly as a sole trader or through a partnership.

Financial Claims Scheme

Deposits with Rural Bank are covered by the Financial Claims Scheme.

The following has been provided to inform you on the Financial Claims Scheme.

1. What is the Financial Claims Scheme?

The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection and quick access to deposits in banks, building societies and credit unions in the unlikely event that one of these financial institutions fails. Under the FCS, certain deposits are protected up to a limit of $250,000 for each account holder at any bank, building society, credit union or other authorised deposit-taking institution (ADI) that is incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA).

The FCS can only come into effect if it is activated by the Australian Government when an institution fails. Once activated, the FCS will be administered by the Australian Prudential Regulation Authority (APRA). In an FCS scenario, APRA would aim to pay the majority of customers their protected deposits under the Scheme within seven calendar days.

2. How is the FCS limit applied?

The FCS limit of $250,000 applies to the sum of an account holder's deposits under the one banking license. Therefore, all deposits held by an account holder with a single banking institution must be added together towards the $250,000 FCS limit, and this includes accounts with any other banking businesses that the licenced banking institution may operate under a different trading name.

Rural Bank Limited also distributes the Farm Management Deposit product through the Rural Finance brand and this is also covered by the FCS. Both Rural Bank Limited and Rural Finance Farm Management Deposits will be considered under the $250,000 limit when in the same name.

3. Where can I get further information on the FCS?

Further information on the FCS is available on the FCS website - www.fcs.gov.au.

Fees and charges

For all Rural Bank fees and charges, download the Schedule of fees and charges document.


For FMD Offset Accounts, interest rates quoted are subject to change without notice. Special legislative requirements must be adhered to and Rural Bank eligibility criteria applies. Before applying for a Rural Bank FMD Offset Account you should consult your taxation adviser to ensure you meet legislative requirements, understand your obligation to comply and the applicable penalties for non-compliance and wider taxation implications and read the Banking Accounts Terms and Conditions. Terms, conditions, fees and charges apply. Full details are available on application by phoning our Customer Service Centre on 1300 660 115, online or by visiting your local branch. All information is subject to change. Products are issued by Rural Bank.