After G&C Mutual took one year term deposits to 5.40% last week, things were more subdued in the TD space over the last seven days.

In the aftermath of the RBA once again deciding to keep the cash rate at 4.35% until at least August, only BCU decided to alter retail term deposit rates.

However, for Australia's primary producers, the week past was a big deal, with all of the big four banks now offering a 5% p.a. return on farm management term deposit rates.

What is a farm management term deposit?

The Farm Management Deposit (FMD) scheme was introduced a couple of years back by the Department of Agriculture to help farmers deal with uneven incomes.

It means farmers can make deposits when things are going well, then dip in when times get tough.

Subject to conditions, if a primary producer puts money into a FMD for at least one year, they can deduct the amount from their taxable income in the year they deposit.

In the event of natural disaster or drought, the funds can be withdrawn within 12 months and the tax concession remains.

Farmers can have up to $800,000 in FMD accounts across all institutions.

To be eligible, you'll need to be carrying on a primary production business in Australia and have no more than $100,000 in annual income outside of your production business the year the deposit is made.

Over the past week, three of the big four banks boosted farm management rates to 5% (Westpac already made the move last week).

All these products require a minimum 31 days' notice before an early withdrawal, unless in cases of hardship.

Commonwealth Bank ups one year fixed FMDs 20 bps

Term length Deposit size Payment frequency Interest rate (Change)
One year $1,000-$99,999.99 End of term 5.00% p.a (+0.20)
One year $1,000-$99,999.99 Semi annual 4.90% p.a (+0.20)

ANZ ups FMD rates 10 bps

Term length Deposit size Payment frequency Interest rate (Change)
12-17 months $1,000-$800,000 End of term 5.00% p.a (+0.10)

NAB hikes FMD rates 10 bps

Term length Deposit size Payment frequency Interest rate (Change)
One year $1,000-$800,000 End of term 5.00% p.a (+0.10)
One-Two years $1,000-$800,000 Annually 5.00% p.a (+0.10)

BCU hikes normal term deposit rates 20 bps

Term length Deposit size Payment frequency Interest rate (Change)
Four months $1,000-$999,999 End of term 5.00% p.a (+0.20)
Four months $1,000-$999,999 Monthly 4.90% p.a (+0.20)

The only retail term deposit rate change this week came from BCU, which boosted four month rates up to a maximum of 5% p.a.

As far as term lengths under six months go, this is competitive - G&C Mutual offers a 5.05% p.a on three month terms, but a deposit with BCU would still return more given the extra month to earn interest.

For example, $1,000 at three months at 5.05% p.a returns about $12.63, while $1,000 at 5.00% p.a for four months would mean earnings of $16.67 before the taxman takes their slice of the pie. 

Picture by Josh Withers on Unsplash