Banking System

Banking is a part of FSNextGen that allows you to set some money aside for a rainy day, get a loan for that shiny new tractor, or make a little money on CD’s (Not the walkman kind). If you are interested in running a bank, that can be done if you are a member of our Donator Club. Click the link to find out more!

What are they?

Banks are player operated entities that are designed to create engagement between farmers and banking players. They allow savings accounts, help with lending, and much more. Player banks must smartly grow their company and make wise lending choices in order to make sure their company succeeds.

Savings Accounts

Savings accounts provide a way for players to save with a bank. Savings accounts generally require a minimum amount to open, and will accrue a certain small amount of interest daily. Banks pay these interests amounts and are able to do so by lending and making investments. Savings accounts will also generally have ‘Limits’ on what can be withdrawn and how often, so choose wisely when investing your funds into a savings account!

Interest Calculation = (Balance * Monthly Interest Rate / 30)

CD (Certificate of Deposit)

CD’s are offered through banks as a way to invest a chunk of change for a longer period of time in exchange for a slightly higher interest payout. This is a good way to utilize funds you have that you do not have another use for but may need in the future. CD lengths are as follows.

• 30, 60, 90, 120 Day CD

• Gain Calculation = (Invested Amount * Interest Rate) at end of selected period.

LOC (Line of Credit)

LOC accounts are essentially a credit card. You can automatically get issued a card from any bank you have an open savings account with, with an initial max limit of $500 bux. To increase this limit, continue banking with this banker, improve your credit score, consider a loan or CD deposit and just generally be a good customer! Banks have the authority to increase or decrease credit lines at their discretion. If you are looking for an increase for a particular reason, we encourage you to reach out to a bank to discuss it. LOC accounts are much higher interest than a loan, and should generally be used as an emergency source of funds for perhaps a last minute auction bid, a repair for an unexpected breakdown, etc.

• Interest Calculation = (Balance * Interest Rate / 30) paid daily.

• Banks can authorize increases at their discretion up to 2.5% of NAV for sub 500 scores, 5% of NAV for sub 600 scores, 7.5% of NAV for sub 700 scores, and 10% of NAV for scores above 700.

Loans

Banks can provide a number of various loans. Loans can be a general loan, or tied to specific assets. When approaching a bank for a loan, you will have the option of opening a loan with items you currently own as collateral or with no upfront collateral, and secondly you will be able to decide if the loan will be for non-specific items, or for specific items.

• If a loan of x type is approved and then accepted by the player, any other loans of that type they have pending or approved will be declined to prevent getting multiple loans for the same purpose.

• Loans are limited based on NAV

• When a loan is granted, it is given in a “Loan Account” with the opening bank. Funds may be taken out of here freely if it is a general loan, or they may be used to pay for items directly if it is a asset based loan. Unused portions of the loan if remaining in this account can be applied to the principle of the loan.

• Loans can vary in length from a single year up to 30 game years in some instances.

• Loan rates are set by bankers, but are capped at certain thresholds (20% yearly is the highest rate allowed. The lowest rates possible vary depending on credit score, and bank. The lowest rate that can be offered is the current ‘prime’ rate for that loan type, which can go up or down based on the economy and how much money is available to be lent etc.

• Loan principle can be paid off in advance after atleast 10 days of having the loan. Payments will still continue nightly on remaining balance until completely paid off.

Credit Rating

Credit helps a lender determine your general credit-worthiness. It takes into account a number of factors. Your score can range from 400-850, and you start with a 500. Below are some factors that can affect your credit, as well as some general rules of thumb.

• Requesting a loan will lower your credit score by 3-10 points per loan, so only apply when you are seriously interested.

• Using your LOC (Line of Credit) with banks can raise your score intermittently, as long as your balance isn’t maxed and the account is in good standing.

• Your debt to asset ratio plays a role in your score, ideally you want to maintain under 10% debt to asset ratio for the best score potential.

Baseline Lending Criteria

There is a 5 point buffer allowance, so if someone applies with a 700 and gets ‘knocked’ to 695 or above for applying, they still qualify for the 700 rate/size