Farm Management Deposits

Farm Management Deposits (FMDs) are a tax effective risk management tool that farmers can use as part of cash flow planning to smooth out variations in income.

FMDs help farmers reduce their taxable income in good financial years; enabling risk measures to be set aside and drawn down in less successful financial years, thereby smoothing erratic income flows.

Through our fixed rate FMDs farmers can defer payment of tax on farm income in the year it was earned until further down the track when the funds are withdrawn. Importantly FMDs provide an opportunity to earn interest at an a competitive rate.

Alternatively, you may be eligible for an FMD offset Account which can assist to reduce your primary production business costs on eligible Rural Finance Term Loans. For more information on our FMD Offset Account contact your local Rural Finance Agribusiness Relationship Manager.

Primary producers who have a taxable non-primary production income not exceeding $100,000 may be able to claim a deposit as a tax deduction. Individuals who are partners or trust beneficiaries in a primary production business are also eligible. An FMD must be deposited for at least 12 months to receive or retain any applicable taxation benefit unless:

  • The owner dies, becomes bankrupt, or ceases to be a primary producer for 120 days or more;
  • The owner requests that all, or part of the deposit is transferred to another FMD provider; or
  • In circumstances specified in Regulation 7 of the Income Tax (Farm Management Deposits) Regulations 1998, relating to repayment in the event of severe drought or a natural disaster, exist.

All deposits are covered by the Australian Government Financial Claims Scheme^.

A deposit must be at least $1,000 and not more than $800,000 and the amount of the deposit must not exceed the primary producer's taxable income for that year. An individual can have more than one FMD, however the total of all FMDs held in the individual’s name can not exceed $800,000.

Fixed Rate FMD Interest Rates

Effective: Wednesday, 19 June 2017

  12 month 24 month
Interest paid annually 2.65% 2.65%
Interest paid quarterly 2.50% 2.50%
  3 month 6 month
Interest paid at maturity 2.20% 2.35%

For further details please contact your local Rural Finance office.

More information

Farm Management Deposits are distributed by Rural Finance, a division of Bendigo and Adelaide Bank Ltd, on behalf of Rural Bank Limited, a wholly owned subsidiary of Bendigo and Adelaide Bank Limited.

For further information on FMD eligibility criteria and conditions refer to the Australian Government Department of Agriculture and Water Resources website and also the Australian Taxation Office website.

Link to detailed “Rural Finance Farm Management Deposit Terms and Conditions”. Link to "Financial Services Guide (FSG)".

^Deposits with Rural Bank are covered by the Financial Claims Scheme. The account holder may be entitled to payment under the Financial Claims Scheme. Payments under the Scheme are subject to a limit for each depositor. Information about the Financial Claims Scheme can be obtained from the APRA website at and the APRA hotline on 1300 55 88 49.

1 For FMD Offset Accounts, special legislative requirements must be adhered to and Rural Finance eligibility criteria applies. Before applying for a Rural Finance 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 Farm Management Deposit Offset Account Terms and Conditions. Fees and Charges apply as outlined in our Schedule of Fees and Charges.