Understanding offset accounts

The money you have in an offset account can typically be withdrawn and used, just like an ordinary savings or transaction account. This means you can:

• have your savings or salary paid into it
• deposit or withdraw money from it as you like
• use a debit card with it.

Everyone’s needs and circumstances are different. To work out whether a home loan with an offset account is worth it for you, you may consider:

• if it’s a partial or 100% offset account
• if any fees apply for the offset account
• how the offset account influences the way the interest rate is calculated against your loan
• how it compares to a redraw facility (where you make additional repayments you can draw upon if needed).

For advice specific to your circumstances, consider speaking with a licensed financial adviser or mortgage broker for assistance.

A redraw facility allows you to access additional payments that you make on your home loan. The main differences between a redraw facility on a home loan and an offset account are:

• the degree of liquidity (meaning the availability of assets/investments being changed into cash) each affords, and;
• the impact withdrawals have on a home’s equity¹. 

Taking money from an offset account doesn’t affect the principal balance of the home loan, while a redraw facility increases the principal and therefore reduces equity in the home. However, having money in a redraw facility may help reduce the life of your loan, so that by the end of the loan term (e.g. 30 years) both your loan balance and available redraw could be zero.

Funds in an offset account can also be easily withdrawn for everyday spending, while money in a redraw facility is typically not as flexible, typically requiring individuals to transfer the funds to a separate transaction account to be able to spend the money. It’s worth noting that the minimum monthly repayment must remain in the redraw facility or offset facility before you can access anything additional. In simple terms, make sure you’ve got enough funds in the account to make your mortgage repayments.

Bendigo and Adelaide Bank Limited (ABN 11 068 049 178, AFSL and Australian Credit Licence 237879) (“Bendigo Bank”) is the credit provider. Credit services are provided by Tiimely Pty Ltd (ABN 41 605 696 544 and Australian Credit Licence 496431) (“Tiimely”). Insurance Australia Limited trading as NRMA Insurance (ABN 11 000 016 722) (“IAL”) does not hold an Australian Credit Licence. IAL may receive a commission from Bendigo and pay a commission to Tiimely if your loan application is approved.

Terms and conditions, fees and charges apply. All information is subject to change without notice. Full details available on application. Lending criteria apply. The Offset Account is available on the Offset Home Loan only for both fixed and variable products and must be linked to an Eligible Home Loan account. The Offset Account product can only be linked to one eligible Home Loan account at any one time. Linked offset facility must be in the name of the customer name/number. Insurance Australia Limited is a member of AFCA. If you have a complaint about the home loan or offset account please refer to www.nrma.com.au/home-loans/complaints. Other fees and charges may apply and can found at the Rates & Fees page. This is general advice only and does not take into account your individual objectives, financial situation or needs (“your personal circumstances”). Before using this advice to decide whether the Offset Account product is right for you, please consider your personal circumstances and read the Offset Account Terms and Conditions to determine if this product is right for you. The Offset Account Terms and Conditions and Offset Account TMD are available at www.nrma.com.au/home-loans.