Integrating your operating loans with short-term investments through a GreenStone Farm Cash Management account gives you the dual benefit of easy access to operating funds while potentially minimizing net interest costs.
When your Farm Cash Management account is activated and funded, money drawn will be pulled from the investment account before advancing withdrawals from your GreenStone operating loan. The benefit is that the Farm Cash Management program combines the availability of a revolving line of credit with the high return of a short-term investment account.
As a result, you can save money by putting your funds into an account where they generate the best return. Farm Cash Management helps you make the most of the money you have now to help out with future expenses.
How does it work?
When you have available cash, your operating loan is paid first. Any excess funds are then invested in an account of investment bonds. You’re then paid a return, similar to a money market account.
Why a bond?
Bonds pay interest at rates that are higher than typical commercial bank accounts like checking, savings, and certificates of deposit.
What is the benefit?
When you need cash for operating expenses, you can use the investment account funds first - before your operating loan – to help minimize your operating loan interest cost.
Plus, you don’t have to worry about access. If you need your Farm Cash Management money, you can get it at any time, with no penalty. If you access more money than your balance, Farm Cash Management will automatically use your credit line.
How do I get it?
Funds are immediately available by writing a draft on your revolving line of credit. You can transfer funds online or over the phone, and the investment funds are liquid.
What are my limits?
Farm Cash Management has no limits on the number of drafts that can be written or the number of electronic funds transfers that can be made. In addition, there are no monthly or per check fees.
What about taxes?
Interest earned on your investment bonds is exempt from state and local income tax, so the tax-adjusted annual yield is even higher.
It’s a simple process. Using Farm Cash Management is as straightforward as making a payment on your loan or writing a draft on your operating loan. Saving money is always a good idea … saving money and earning more with it is an even better idea.
“As the world has changed as a result of Covid, many customers have migrated to the GreenStone online banking and mobile app,” said Jeff Sommerfield, VP and Agribusiness Lending Group Manager. “Both of these, combined with Farm Cash Management has allowed customers to make payments and have access to their funds 24/7, which saves them time and money.”
Contact your GreenStone representative for more information.
To view the article in the online 2022 Spring Partners Magazine, click here.
