Did you know that as a PFC member-owner, you have a choice of interest-bearing funds? These funds can help plan ahead for future payments and farming expenses – all while making your money work harder for you!
The two funds associated with general commitments are:
TRUST FUND (Associated with Operating Loans)
The Trust Fund is an interest-bearing account utilized when your operating loan is paid to a zero balance. Any money you deposit – also called repayments applied – after the zero balance has been reached is placed in trust, and interest is paid on the balance. You can invest up to the consolidated commitment amount of all your PCA loans in the Trust Fund (when operating is paid to a zero balance).
RESERVE FUND (Associated with Mortgage Loans)
The Reserve Fund is an interest-bearing account associated with each mortgage loan that you can withdraw from for farming or other expenses. You can invest up to the principal balance of your mortgage loan.
WHAT YOU NEED TO KNOW ABOUT BOTH THE TRUST AND RESERVE FUNDS
Money in the Trust Fund and Reserve Fund earns a competitive interest rate, which is currently 1%. Withdrawals are easy to make and can be made anytime with no minimum withdrawal (or deposit) amount.
Another fund you can utilize is the Installment Fund, and it is associated with the payment amount on mortgage loans.
INSTALLMENT FUND (Associated with Mortgage Loans)
An Installment Fund is associated with each mortgage loan held by our customers. The Installment Fund is an interest-bearing account for funds set aside strictly for your next payment. You can invest up to 100% of the amount of your annual payment into the Installment Fund, and it will earn the same rate of interest that you are paying on the loan. Funds you deposit in the Installment Fund are automatically applied to your payment on the payment due date. Funds held in the Installment Fund are not eligible to be withdrawn once deposited.
FREQUENTLY ASKED QUESTIONS
Q: If I have an amount equal to my annual payment in the Installment Fund, what do I need to do when my payment comes due?
A: Nothing. On the day your payment is due, your interest earned will be automatically applied, then the balance of the payment from the funds in the account.
Q: If I am earning interest on my payment amount in the Installment Fund, what happens to the excess funds after my payment is made?
A: It remains in the Installment Fund and continues to earn interest.
Q: What happens if I don’t have the full payment amount in the Installment Fund, but I have sufficient funds in the Reserve Fund?
A: Your payment is made from the following sources in the following order:
- Interest earned on Installment Fund
- Interest earned on Reserve Fund
- Funds from Installment Fund
- Funds from Reserve Fund
Q: How do I transfer funds from the Reserve Fund to the Installment Fund?
A: Just contact your servicing office (in person or by phone) and tell them how much to transfer. You will get a receipt showing the current balances of each fund after they make the transfer(s) you request.
Q: What do I need to do to withdraw from the Reserve Fund?
A: Just contact your servicing office (in person or by phone) and tell them how much you would like to withdraw – sign a Withdrawal Request form – and your check will be cut.