This is a normal day-to-day transaction account that also has the additional benefit of interest offset. If you have any money in this account, then the interest amount is offset from the home loan account. For example, you have $10,000 in the offset account and home loan balance is $80,000 today, the lender will charge interest on the difference (=$80,000 - $10,000 = $70,000) only. If the account is the everyday offset account, then they calculate the interest on daily differences.
If you need, you can still withdraw funds from offset account by using your debit card and all other functions of everyday banking facility is still there. Most of the offset accounts come usually with the package home loan products.