There is a growing sense of confidence across industry that incomes are improving and hopefully debts are reducing. In some cases members are reporting modest profits. Worrywarts are hoping the better times will last and fair enough. No-one want to go back down the black hole. So, It may be time to think about committing some of that small surplus to Farm Management Deposits.
Most primary producers are able to set aside pre-tax income in a profitable year and earn interest on it, then be able to drawdown on it in later years when income is not so solid. Producers can have more than one FMD up to a combined value of $800,000 per farming enterprise. Even $10K is a good idea for starters.
Most of the banks offer FMDs or an FMD offset account, which can reduce primary production business, costs on eligible Term Loans. All banks can assist.
With the end of financial year quickly approaching, perhaps it’s time to pick up the phone and speak to your bank manager.