The deposit agreement, Form RD 402-1, is a three-party agreement issued by USDA Rural Development (RD) under the Rural Revolving Fund. The depositor, a financial institution and the Government sign it so that an account holding loan or advance funds is pledged to the Government as security. On this page you can fill out the form online on FillingPDF and download or print the completed PDF; the official PDF is published by USDA at forms.sc.egov.usda.gov.
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What is RD 402-1?
Form RD 402-1, Deposit Agreement is the USDA Rural Development (RD) form, labeled Rural Revolving Fund, by which a depositor pledges an account at a bank, savings and loan or credit union to the United States as security for money the Government has lent or advanced.
The agreement is made between three parties: the United States of America, acting through the U.S. Department of Agriculture (the "Government"); the named depositors (the "Depositor"); and the named bank, savings and loan or credit union (the "Financial Institution"). It covers the account into which money derived from the Government's loans or other advances, or money the Depositor otherwise obtains, is deposited.
The seven numbered clauses do the following:
- The Depositor assigns and pledges the account and its deposits to the Government and grants a security interest in all money deposited, as security for any debt owed to the Government.
- The Financial Institution follows the Government's instructions on the funds and pays over the balance, or any part of it, on written demand. The Depositor's death, disability or insolvency does not impair that power.
- The Financial Institution gives up set-off and recoupment rights (except service charges), will not take a security interest or "control" of the account, and subordinates any interest it has.
- Once it pays on a duly executed order, check or Government demand, the Financial Institution is discharged for those funds.
- On request, the Financial Institution sends account statements and, where needed, canceled checks or certified copies.
- The Financial Institution's jurisdiction is the state shown in the "County and State of Residence" block.
Clause 2 has a special rule for RMAP, and clauses 5 and 6 state that they are not applicable for RMAP.
Who needs to file RD 402-1?
The main group is a depositor who has received, or will receive, a loan or other advance of funds from USDA Rural Development and who deposits that money, or other money, in an account at a bank, savings and loan or credit union that is to be pledged to the Government. The form names the depositors in its first block and asks for their Social Security or IRS tax number and UEI number.
Two other parties sign the same document:
- The financial institution that holds the account. It signs the agreement and returns the signed original and a copy, with a copy of the deposit slip, to the Government agency office.
- The Government, acting through USDA, which signs on its own signature block with name, title and agency.
For an RMAP account, the agreement states that the Depositor may use the account to make microloans, receive payments from microborrowers and make payments to the Government. The form does not say who may sign for a depositor beyond a signature line with "By", "Name" and "Title".
When to file RD 402-1
The agreement is made on the date indicated in the date block at the top of the form, and it is completed when a loan or other advance of funds from the Government is to be deposited in the pledged account. The form sets no separate due date. Because it covers deposits made "before or after" the agreement, the pledge reaches money already in the account as well as later deposits. The Government may ask the Financial Institution for account statements at any time, and may demand the balance in writing; those requests come after the agreement is in place.
Documents you need
- The signed original of the deposit agreement and a copy, which the Financial Institution returns to the Government agency office.
- A copy of the deposit slip, returned by the Financial Institution along with the signed original and copy.
How to fill out RD 402-1
Enter the names of depositors
In the Names of Depositors block, write each depositor. Next to it, enter the Social Security or IRS Tax No. and the UEI No.
Enter county and state of residence
Fill the County and State of Residence block. Clause 7 treats the state shown here as the Financial Institution's jurisdiction, so it must be correct.
Enter the Government agency details
In the Government Agency Name and Address block, write the agency office name and address. The financial institution returns the signed agreement and statements to this address.
Enter the financial institution
In the block for the bank, savings and loan or credit union, write its name and address, including the ZIP code.
Enter the date and account number
Complete the date block, since the agreement is made on the date indicated, and the Account or Certificate Number if one is used.
Read the numbered clauses
Check clauses 1 to 7 before signing. For RMAP accounts, clause 2 sets the permitted uses of the account and clauses 5 and 6 are not applicable.
Sign for the financial institution
On the signature page, under Financial Institution, the signer completes By, Name and Title.
Complete the Government block
Under United States of America, United States Department of Agriculture, the Government signer completes By, Name, Title and Agency.
Sign for the depositor
Under Depositor, complete By, Name and Title. Add a block for each depositor named at the top, if needed.
Review and download the PDF
Check that every block and signature line is complete, then download or print the completed PDF from FillingPDF and send it as described under How to submit.
How to submit RD 402-1
The form names one return route: the Financial Institution sends the completed agreement back to the Government agency office.
- By the financial institution: the note on the signature page asks it to return the signed original and a copy, along with a copy of the deposit slip, to the Government agency office address listed on the front of the form. That address is the one entered in the Government Agency Name and Address block.
- Before it is returned: all three parties sign the signature page: the Financial Institution, the United States Department of Agriculture and the Depositor.
The form prints no portal, e-mail address or fax number for submitting the agreement. Comments on the paperwork burden go to the Information Collection Clearance Officer, Rural Development Innovation Center, Regulations Management Division, at [email protected]. FillingPDF lets you fill out and download the PDF; submission follows the channels above.
Common mistakes to avoid
- Returning the signed agreement without a copy and without a copy of the deposit slip; the note to the Financial Institution asks for the original, a copy and the deposit slip copy.
- Sending the signed agreement somewhere other than the Government agency office address listed on the front of the form.
- Leaving the County and State of Residence block incomplete, when clause 7 makes that state the Financial Institution's jurisdiction.
- Leaving a signature block empty: the signature page has separate blocks for the Financial Institution, the United States Department of Agriculture and the Depositor.
- Depositing earned income into the Loan Loss Reserve Fund without the Government's advance authorization; clause 2 allows it for RMAP only with that authorization.
- Treating clauses 5 and 6 (statements and canceled checks) as binding for an RMAP account; the form says they are not applicable for RMAP.
- Omitting the Government agency name and address or the financial institution's ZIP code, which the form asks for in those blocks.
Frequently asked questions
What is a deposit agreement on Form RD 402-1?
The deposit agreement, Form RD 402-1, is a USDA Rural Development agreement among the Government, a depositor and a financial institution. The depositor pledges an account and its deposits to the Government as security for any debt owed to it, and the institution agrees to follow the Government's instructions on the funds.
Who signs the RD 402-1 Deposit Agreement?
Three parties sign the signature page: the Financial Institution, the United States Department of Agriculture (with name, title and agency) and the Depositor. Each block has By, Name and Title lines. The form does not describe who may sign on a depositor's behalf.
Where does the signed deposit agreement go?
The Financial Institution returns the signed original and a copy, with a copy of the deposit slip, to the Government agency office address listed on the front of the form. The form prints no online or e-mail submission channel for the agreement.
Can the Government take money out of the account?
Yes. On written demand or order, the Financial Institution must pay the Government the balance or any part of it, without further consent from the Depositor. The Depositor's death, disability or insolvency does not impair that power.
How does the form treat RMAP accounts?
For RMAP, the Depositor may use the account to make microloans, receive payments from microborrowers and pay the Government. Earned income may go to the Loan Loss Reserve Fund only with the Government's advance authorization. Clauses 5 and 6 are not applicable for RMAP.
Can the bank offset the account against what I owe it?
No, except for service charges. The Financial Institution agrees not to assert set-off or recoupment against the deposited funds, not to take a security interest or UCC control, and to subordinate any interest it has to the Government's.
Can I fill out Form RD 402-1 online?
You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not submit the agreement; the financial institution returns it to the Government agency office, as the form directs.
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