Interestingly though, all Big Four banks but one unveiled boosted rates on farm management deposits (FMD) available exclusively for primary producers.

Fortuitously, the only bank that moved retail term deposit rates traces its roots to a small group of – you probably guessed it – banana farmers in NSW. 

The central bank’s rate-setting committee on Tuesday elected to further extend the cash rate pause, leaving it at its current peak of 4.35%. 

With inflation sitting well over the RBA’s desired band and the jobs market remaining tight, the “hawkish hold” was widely expected. 

However, unlike previous meetings where both the case for increasing and decreasing the cash rate were considered or the case for a hike was entirely off the table, the June policy meeting nearly had the interest rates lifted. 

In her usual post-meeting press conference, RBA Governor Michele Bullock revealed the Board “discussed the case for increasing the cash rate”. 

"In the end, it decided that its current strategy of staying the course and trying to bring inflation back down was the right way to go," Gov Bullock said. 

While this higher-for-longer strategy is likely putting pressure on struggling borrowers and consumers, it offers an opportunity for investors – and farmers – to net significant returns.  

BCU Bank hikes rates by 20 basis points 

Customer-owned BCU Bank emerged as the only player to move term deposit rates this week. 

A level 20 basis point boost was applied to the bank’s four-month standard and regular income term deposits. 

Following this week’s adjustments, BCU Bank’s standard TD now pays 5.00% p.a. returns at maturity, while the regular income TD yields 4.90% p.a. monthly.

The minimum deposit for both products is $1,000 and the maximum is $1 million. 

CommBank, NAB, and ANZ roll out new FMD rates

All four major banks now offer 5.00% p.a. returns on one-year farm management deposits, after CommBank, NAB, and ANZ lifted their offered rates this week. 

Westpac beat its three peers to the punch when it rolled out its 5.00% p.a. rate on 12-month FMD last week. 

This farmer-exclusive product is designed to help primary producers even out the financial ups and downs of varying agricultural earnings by allowing them to defer their pre-tax incomes.

During profitable years, farmers can lock away money in an FMD account and deduct the amount from their taxable income in the year of deposit.  

When it comes time their earnings are lower, due to low yield or natural disaster, they can withdraw their funds and only then will it be considered assessable income. 

To be eligible for an FMD account, the depositor’s non-primary production income must be less than $100,000 in the financial year the deposit is made. 

Here are details on the banks’ offerings: 

  • CommBank 12-month FMD: up 20 basis points to 5.00% p.a. (paid at maturity) and 4.90% p.a. (paid semi-annually)
  • ANZ 12-month FMD: up 10 basis points to 5.00% p.a. (paid at maturity)
  • NAB 12-month FMD: up 10 basis points to 5.00% p.a. (paid at maturity)

CommBank and ANZ’s rates are available on balances starting at $1,000, while NAB requires a minimum of $10,000 deposit. 

By comparison, Westpac’s 5.00% p.a. applies to deposits starting at $5,000. 

The maximum deposit across all four majors tops at $800,000. 

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