Deployed Troops Can Earn 10% Guaranteed Interest on Savings
Deployed troops who set aside pay can earn up to 10% interest a year through the Defense Department's Savings Deposit Program, a long-standing benefit that still catches many service members by surprise, according to Military.com.
Snapshot
The Savings Deposit Program, administered by the Defense Finance and Accounting Service, lets eligible troops deposit unallotted pay while serving in a combat zone or hazardous-duty area. Deposits are capped at $10,000 per member and earn a government-guaranteed 10% annual return, with interest continuing briefly after deployment ends, per DFAS.
Key points
- Eligibility: Members must be in a designated combat zone or receiving hostile-fire or imminent-danger pay in a Qualified Hazardous Duty Area, as outlined under 10 U.S.C. 1035, DFAS says.
- Timing: Deposits can start after 30 consecutive days in a covered area, or at least one day in each of three consecutive months, with the first deposit now limited to pay earned after that window, according to an updated Defense Department financial regulation.
- Limits: Each deposit must be at least $5, account balances cap at $10,000, and travel pay, advance pay or pre-deployment savings cannot be deposited, DFAS says.
- How to enroll: Troops can use a payroll allotment through their branch's finance office or deposit cash, check or Eagle Cash card funds directly, per DFAS.
- After deployment: Interest keeps accruing for up to 90 days after return, and the full balance pays out automatically 120 days after leaving the combat zone, DFAS says, though the Consumer Financial Protection Bureau notes the interest is taxable.
Quick take
For deployed service members looking to build savings fast, a guaranteed 10% return is hard to match anywhere else. The paperwork and timing rules are specific, so troops heading into a qualifying deployment should check with their finance office early to make sure they don't miss the window.
Read the full story: military.com