Military Savings Account

The Military Savings Deposit Program (SDP) is a special savings program that allows military personnel to earn interest on deposits. However, they have to follow some rules related to contributions and withdrawals. Here’s everything you need to know!
Military Savings Account
Military Savings Account
A Military Savings Deposit Program (SDP) is a special savings program for military members in designated combat zones. Let's understand how military savings account works and various tax advantages such deposits receive in the United States.
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Making savings a habit is an important step toward financial security. But saving may be a low priority when deployed, particularly to a combat zone. However, you should consider an investment program with a solid rate of return at zero risk.

The military Savings Deposit Program (SDP) offers an annual return of 10 percent, compounded quarterly, on savings up to $10,000 — a rate far higher than that of traditional savings accounts. Also, check out Beem to get updated interest rates and compare the latest best high-yield savings accounts that work best with your financial goals.

What is a Military Savings Deposit Program?

A Military Savings Deposit Program (SDP) is a special savings program for military members in designated combat zones. Through this plan, military personnel can earn interest on deposits. There are rules for contributions and withdrawals that must be followed. For example, deposits can be at least $5. The SDP and other savings benefits are offered, such as the federal retirement plan and the Thrift Savings Plan (TSP). Service members must meet eligibility requirements to contribute to a unique savings plan. 

You can deposit money into the SDP by contacting the finance office at your deployment location. You have until the date of departure from the combat assignment to deposit into the account; however, interest will accrue up to 90 days after your return. Amounts up to $10,000 can be deposited into the savings account, earning 10% interest annually.

Understanding Eligibility for Military Savings Accounts

You are eligible for SDP if you serve in an SDP-eligible combat zone. Suppose you have been deployed at least 30 consecutive days or at least one day in each of three consecutive months and receive Hostile Fire Pay. Remember, SDP is not a retirement savings program. Also, a savings account offered to military members by a bank or credit union is not the same as the SDP. 

Types of Military Savings Accounts

In addition to the SDP, military members can open savings accounts at banks and credit unions. There is also a Thrift Savings Plan (TSP). The plan is a government-sponsored retirement savings and investment program for military personnel. As many private corporations offer their employees 401(k) plans, the TSP offers similar savings and tax benefits.

Tax Advantages of Military Savings Accounts

The interest earned on deposits made into the SDP is generally tax-free while the service member is deployed to a designated combat zone. Generally, interest earned on deposits into the SDP is tax-free while the service member is deployed. Those deployed to combat zones or hazardous duty areas may qualify for the Combat Zone Tax Exemption (CZTE). Also, there is an exclusion from State Income Tax.

Protecting Your Military Savings Account

A Military Savings Deposit Account (SDP) must be protected to ensure security and maximize the program’s benefits. Make sure that your contact information is up-to-date. Protect your account information, and don’t share sensitive information with others. Regularly review your account statements to check for any unauthorized transactions. Be cautious if someone without your knowledge tries to convince you to transfer funds from your TSP account.


Deployment can be a stressful time. SDP, offered by the US Department of Defense, aims to help eligible military members build their financial savings. The SDP payment, including all interest, gets issued automatically 120 days after the service member has left the combat zone. Upon returning from deployment, deposits will continue to draw interest for up to 90 days. If the service member prefers, they can request a final withdrawal via myPay before 120 days following return from deployment.

If you’re not serving in a combat zone, then you won’t be able to contribute to one of these unique savings plans. But there are other ways to grow your savings as a member of the military, including military savings accounts at Navy Federal Credit Union and other credit unions and banks. Use Beem to supercharge your savings and see your money work harder for you.


Is TSP a good investment for the military?

Yes, thrift savings plans (TSP) save a percentage of your pay through payroll deductions. Whether you leave the military or stay until retirement, your contributions are yours to keep. As it offers the same kind of savings and tax benefits as most private corporations provide to their employees under their “401(k)” plans, it’s a good deal.

Can I cash out my military pension?

Pension can not be paid in cash unless you’re critically ill or have a shortened life expectancy. Also, note you’ll receive a pension after 20 years of service.

Can you receive 100% VA disability and military retirement pay?

After 20 years of service, you are eligible to receive it. Also, it would help if you had a disability rating of at least 50% to qualify for Concurrent Retirement and Disability Pay (CRDP).

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Meenakshi Sengupta

Meenakshi Sengupta

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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