The Savings Deposit Program can make you big bucks while in-country (and even out).
Every unit has that financially savvy staff officer. That one who is always harping on you to save more money. Well, that salty Gunny just may know what he’s talking about – especially during times of war. If you’re currently deployed to a combat zone or know you will be in the future, you may as well make the most of your money. It’s not like there’s much to purchase while deployed. In fact, with the Savings Deposit Program, you can put your money to work for you! Most investments aren’t guaranteed, but the SDP is one of those rare gems that actually is — with a 10% annual rate of return to boot! More on that in a bit…So here’s the down and dirty.
To qualify for the Savings Deposit Program, you have to be deployed for at least 30 days in one of the designated combat zones, qualifying hazard duty zones, or on certain contingency operations. Alternatively, you only need to spend ONE day each month for three consecutive months in one of the aforementioned operations to qualify as well (secret squirrels, that’s you!). By the way, the combat zone list may surprise you, as many of these locations haven’t seen combat in years. You can find the whole list HERE.Let’s get back to exactly how much money you can save (and earn) while deployed.
First of all, you can plug in up to $10,000 per deployment. Then, your savings earns 10 percent annual interest, compounding quarterly. That is, the interest you earned starts earning interest on itself every three months. On top of all that, your money can sit in the account earning interest for 90 days after you depart the combat zone. There’s one thing to consider though – once you put in your money, it’s ‘locked’ in until you no longer qualify for the Savings Deposit Program. Meaning, 90 days after leaving the combat zone or other qualifying zone. In an emergency, however, you can withdraw your money if your commander signs the proper approval form. Hopefully, that’ll never be the case.Now let’s crunch some numbers.
If you’re deploying for 1 year and want to put in an equal amount each month to eventually get up to $10,000, you’ll be putting in $833.33 monthly. After a year, you’ll have $10,640.81. Then, that can still earn interest for 3 more months, which means you’ll end up with an extra $642 earning interest for you. After it’s all said and done, you’ll have $10,906.83! That’s over $900 in FREE money, plus your 10k original investment.What can you do with this money?
That’s a big chunk of change that you can use as a down payment on a mortgage or roll over into the Thrift Savings Plan (you can find our guide HERE). If you’re getting out of the military, check out our Transition Tips and consider rolling it over into a civilian sector retirement fund. Of course, we can help you choose what would be best for you, whether it be a 401(K), Solo 401(K) 457(b), IRA, or one of the Roth variants of each.