Farm Management Deposit vs. Term Deposit – Which is Best?
About Farm Management Deposits (FMD)
The idea of this deposit is a simple one – it’s a scheme that aims to level out the income that the farmers earn by maximising the level of their taxable income by having their surplus funds diverted to their farm management deposit account. This is very useful since no one can predict what could happen in the future and the money there can be used for a great number of unexpected situations that could occur.
The Idea Behind Term Deposits
As for the term deposits, one of the most important differences that you should be aware of before deciding to apply is the fact that the interest rate is usually higher than the one that is applied to the FMD accounts. This will provide you with a very important way of maximising your profit and if this is your main objective for the near future, you should most definitely consider applying for this product.
More Useful Information for You
In order to be able to have an even clearer idea about the two different products, you should carefully analyse the table below, which will also come in handy for you when it comes down to deciding which of these two accounts is best for you and your financial situation.
|
|
TD Income |
FMD Income |
Interest TD |
Interest FMD |
Net Income TD |
NET Income FMD |
|
Income for Current Year |
$45,000 |
$150,000 |
|
|
$130,251 |
$70,000 |
|
Projected Income for Year 1 |
$45,000 |
$20,000 |
$3,000 |
$4,600 |
$54,814 |
$70,000 |
|
Projected Income for Year 2 |
$45,000 |
$20,000 |
$2,200 |
$3,500 |
$53,612 |
$105,293 |
|
Final Position |
|
|
|
|
$98,678 |
$105,293 |
There are also some important assumptions for the table above. First of all, you will need a level of income of at least $70,000 in order to be able to cover all the expenses associated with it in full, and some other important living costs at the same time. Furthermore, in most of the situations you will be recommended to invest all of your excess cash into a term deposit of 1 year.
All in all, make sure you take full advantage of the pieces of information presented to you in this article because in this way, you will start seeing some serious improvements when it comes to your finances and you will enjoy more and more benefits.
Top High Interest Savings Accounts
All of these accounts are FREE to open and require no minimum deposit. They all have easy internet banking access with no transaction fees.
| Savings Account | Account Details | Maximum Variable Rate p.a. | Standard Variable Rate p.a. | Bonus Interest p.a. | Fees | Min Balance/Min Deposit | |
|---|---|---|---|---|---|---|---|
 RaboDirect High Interest Savings Account | Limited time offer. Enjoy a leading rate on your savings. | 5.60% | 4.85% | 0.75% | $0 | $0 / $0 |
 
|
 UBank USaver | High ongoing rate plus if you deposit $200 monthly you receive a bonus 0.60% p.a, taking this up to an even higher rate. Open online. | 5.51% | 4.91% | 0.60% | $0 | $0 / $0 |
|
 HSBC Serious Saver | Enjoy an introductory variable rate for 4 months for balances up to $1,000,000. Limited time only! | 5.55% | 4.25% | 1.30% | $0 | $0 / $0 |
|
Ask A Question