FAQs - Early Withdrawal From a Term Deposit or Term FMD
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FAQs - Early Withdrawal From a Term Deposit or Term FMD

Are there any restrictions as to when I can break a Term Deposit / Term FMD?

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If you would like to withdraw (i.e. break) your Term Deposit or Term Farm Management Deposit (FMD) prior to maturity, you will be required to provide us with at least 31 calendar days’ notice, unless a grace period applies or unless we determine that you are suffering financial hardship. You may be required to pay an early withdrawal fee unless we determine that you are suffering financial hardship.

How do I request an early withdrawal for my Term Deposit or Term Farm Management Deposit?

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For all early withdrawal enquiries relating to Farm Business Term Deposits and Term Farm Management Deposits, please call our Client Services team on 1800 025 484 Monday Friday 6am – 8pm. A ‘Deposit Break Request’ form is required to be completed and submitted. In case of financial hardship, please contact your account manager.

How is the Term Deposit and Term Farm Management Deposit early withdrawal fee calculated?

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For Term Deposits and Term Farm Management Deposits (FMD) opened on or after 1 August 2019

If you request an early withdrawal of a Term Deposit or Term FMD opened (or rolled-over an existing fixed term) on or after 1 August 2019, we will apply an early withdrawal fee. The amount of the fee will be equivalent to reducing the interest rate on your Term Deposit or Term FMD by 10-80%, depending on the elapsed term. The closer the early withdrawal date is to the maturity date, the lower the early withdrawal fee will be.

% of elapsed term

Reduction to Interest Rate

0 to less than 20%

80%

20% to less than 40%

60%

40% to less than 60%

40%

60% to less than 80%

20%

80% to less than 100%

10%

Example: You have a $20,000 Term FMD invested for 1 year (365 days) at 2.50%p.a. and you request to withdraw it after 210 days. The interest that has accrued is: $20,000 x 2.50%p.a. x 210 / 365 = $287.67.

To determine the reduced interest rate to apply we divide the elapsed term of 210 days by the full term of 365 days to get an elapsed term percentage figure of 57.53%. In accordance with the above table, as the term elapsed is between 40-60%, we will apply a 40% reduction to the 2.50%p.a. calculated as follows: 2.50%p.a. – (2.50% x 40%) = 1.50%p.a.

Interest calculated using the new reduced interest rate is: $20,000 x 210 days x 1.50% / 365 = $172.60.

The interest adjustment is therefore: $287.67 - $172.60 = $115.07.

No early withdrawal interest adjustment will be applied if you withdraw funds within 7 days after reinvesting your term deposit (i.e. during the grace period).

For Term Deposits and Term Farm Management Deposits (FMD) opened before 1 August 2019

For an early withdrawal from a  Term Deposit or Term FMD commencing before 1 August 2019, you must pay the break cost if it is greater than $50.

Break costs reflect future cash flow losses incurred by us as a result of interest rate differentials that exist between wholesale market rates applicable to the existing term deposit and current wholesale market rates applicable for the remaining period of the term deposit, adjusted to reflect a net present value. Break costs increase in line with increases in the following: interest rates, the amount withdrawn and the market margin.

Further information can be found in the relevant terms and conditions, or is available on request.

 

How will I know when the grace period expires on my Term Deposit or Term FMD?

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We will notify you prior to maturity advising you of the start and end dates of your grace period. Please ensure your address details are current so that you will receive the Maturity Advice letter which will be sent to you by post.

How will the grace period on my Term Deposit or Term FMD operate?

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Each time your Term Deposit or Term Farm Management Deposit auto rolls you will benefit from a 7 day grace period that starts from the day after maturity. During the grace period you will be entitled to withdraw or transfer your Term Deposit or Term FMD without incurring a fee or reduction in your interest rate.

Is the Term Deposit / Term FMD grace period 7 business days or calendar days?

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The grace period is 7 calendar days. If the 7th day falls on a weekend or a national public holiday, you will have until the following business day to be covered under the grace period.

Is the Term Deposit / Term FMD notice period 31 business days or calendar days?

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The notice period is 31 calendar days. If the 31st day falls on a weekend or a public holiday, your funds will be deposited into the account you specified on the ‘Deposit Break Request’ Form on the next business day.

I would like more information?

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If you require clarification or any further information please call our Client Services team on 1800 025 484 or email us on Sydney.client.services@rabobank.com from 6am to 8pm (Sydney time) Monday to Friday.

What happens if I have less than 31 days remaining on my Term Deposit or Term FMD and I want the funds before maturity?

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Unfortunately you can't break the Term Deposit or Term Farm Management Deposit, except in the case of financial hardship.

What happens once the notice is provided on my Term Deposit or Term FMD?

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Once the 31 days' advance notice has been provided and served, the Term Deposit / Term Farm Management Deposit principal and all accrued interest up to the date of payment will automatically be returned to the account you specified on the ‘Deposit Break Request’ form. If the 31st day falls on a weekend or a public holiday, your funds will be deposited on the next business day. Any applicable early withdrawal fees will be debited from the accrued interest. If the accrued interest is less than the early withdrawal fee, we will contact you for instructions.

What interest rate do I earn on my Term Deposit / Term FMD when I request a break?

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The interest rate on your Term Deposit / Term Farm Management Deposit will not change and you will continue earning the same rate for the next 31 days.

What qualifies as financial hardship?

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Financial hardship comes in many forms such as unforeseen changes such as the loss of income, employment or illness - which impact your ability to meet your current financial obligations.

Financial hardship is assessed on a case by case basis.

If you wish to request early release of your funds on the grounds of financial hardship, you can contact your account manager.

 
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