Military Banking for Veterans Handbook Nov, 2021

Military Banking for Veterans Handbook Nov, 2021

Military personnel and their families have particular banking needs, which is why finding a bank that understands their needs is so vital.

For instance, military personnel routinely travel, relocate, work unusual hours, live overseas, maintain various official addresses for a year, and so on. If you don’t use a military financial institution, all of this can make banking difficult.

Do you want to learn more about the veterans’ benefits banking program? This Military Banking Handbook for Veterans, Dependents, and Survivors is a comprehensive guide to all VA benefits and services.

What Is Military Banking?

Military banks are financial institutions that cater to military personnel. These banks are popular with service members because they provide a variety of specialty accounts, bonuses and rewards, and services and options tailored to military lifestyles. Military banks primarily focus on and cater to military members, although certain banks appeal to a broader population.

Military Banks: Understanding Their Functions

Military banking services are developed to satisfy the specific banking needs of service members and their families. Features like totally refundable out-of-network ATM fees and remote check deposits are beneficial when traveling or relocating frequently. A service member stationed abroad will benefit from an account with no foreign transaction costs.

USAA military banks are one of the oldest military banks in the United States. Twelve mainstream banks, including U.S. Bank, Bank of America, Wells Fargo, Chase, and others, offer services tailored to military personnel.

NOTE: To access the services of some military banks, you must be connected to the military, either directly (current members or veterans) or indirectly (spouse or dependant).

Why Use a Bank?

A bank or a credit union can provide you with the following options:

  • Locations on military bases – Having branches on or near an army post is helpful for persons serving on active duty who may have restricted time off-base or who may not have much time to prepare before a deployment or move. Navy Federal Credit Union, for instance, has 76 branches on bases and 27 foreign locations.In contrast, USAA, a San Antonio-based bank aimed toward military members, has branches in San Antonio and near service academies in Annapolis, Maryland, Colorado Springs, Colorado, and West Point, New York.
  • Feature-rich online services – For service members stationed overseas who wish to make timely payments on their debts, including mortgages and auto loans, the ability to connect to the internet is a huge advantage. Automatic bill payments, spending limits, and checking account deposits are valuable features.
  • Excellent customer service – All consumers appreciate being treated with respect by financial institutions, but military personnel are in need of good customer service given that military life tends to place a heavy financial burden on them.
  • ATMs are widely accessible, even overseas – When a service member wants to pay for food or other necessities at establishments that only accept cash, having access to ATMs is critical. Navy Federal Credit Union, for example, is part of a network of over 30,000 accessible ATMs.
  • Easy money transfer – Military personnel frequently have rigorous work schedules and limited spare time. Sending money home to family or friends is essential. Apps that allow service personnel to pay bills or send money to friends or family members are helpful.
  • Reassignments and deployments experience – Military life comes with a variety of responsibilities, challenges, and opportunities, such as relocating more often and being stationed overseas. It’s beneficial to work with a bank or credit union that understands the difficulties of reassignment or deployment. Some credit card companies will waive annual fees for members who live abroad.
  • Expertise in military funding programs, like VA loans – A financial institution knowledgeable about VA loan laws can help expedite the procedure. A credit union or a bank may waive origination fees.

Bank vs. Credit Union vs. Online Bank for Veterans

It’s critical to pick a plan that fits your lifestyle and satisfies all of your financial demands and objectives. Although they all provide similar services, distinctions in each product and policy can significantly impact how well they are suited to you. Let’s take a closer look at each banking option available below!

What Is a Bank?

Banks are for-profit institutions that investors own. Therefore, their shareholders expect them to make a profit.

Individuals and businesses alike are eligible to open accounts with a bank. In contrast to a credit union, which has a membership, customers do not vote or voice how a bank is governed. You’re a customer at a bank and a member of the credit union.

The FDIC (Federal Deposit Insurance Corporation) insures banks for up to $250,000 per deposit account in the United States.

Why Banks?

  1. Branches worldwide: The ability to speak with staff members directly allows you to build personal relationships.
  2. An extensive ATM network: In addition to having broader access to ATMs, banks also do not charge ATM fees, in-network fees, or withdrawal limitations.
  3. Robust Customer Support: If you need help with your banking, you can choose between face-to-face interactions or online or telephone services at a traditional bank.
  4. Access to more account options: Traditional banks act as one-stop shops for all your banking needs, providing account options including checking, savings, and business accounts.

What Is a Credit Union?

In many ways, a credit union is similar to a bank. Credit unions, on the other hand, are smaller, non-profit organizations.

Credit unions, like banks, offer deposit accounts such as checking and savings accounts and loans and, in some cases, credit cards. Some of the phrases they use to describe their products, though, are different. Credit unions, for instance, often refer to certificates of deposit (CDs) as share certificates. However, they’re virtually the same thing except for the name.

The Federal Deposit Insurance Corporation (FDIC) does not cover credit unions, but the National Credit Union Administration (NCUA) does provide deposit insurance to the same extent.

Why Credit Unions?

PROS CONS
1. An emphasis on customer service. For membership, most credit unions require a small fee or donation
2. A higher rate of return on savings products There may be some online tools available, but credit unions are slow to offer them
3. Rates of interest on loans are lower. A limited number of branch locations
4. A credit union’s deposits are insured by the National Credit Union Administration (NCUA) A limited range of financial products

What Is an Online Bank?

Online banking refers to the use of a computer or a mobile device to manage your FDIC-insured bank accounts. This includes electronic fund transfers, check deposits, and bill payments.

Customers can usually access their accounts on the internet at traditional banks and credit unions with branches. Online banks and suppliers, on the other hand, essentially give mobile access. You won’t be able to speak with a banker in person, but you can access your account at any time using a mobile device or a computer.

Why Online Bank?

PROS CONS
1. Lowered account fees

As online-only banks don’t have the costs of traditional financial institutions, they do not charge monthly fees.

No Physical Locations

A bank that is exclusively online will provide little to no in-person customer service.

2. Rates of interest are better

Compared to the national average, online-only banks typically offer higher APYs (around 0.5%).

Limited ATM Access

Cash withdrawal fees may apply if your online-only bank is not linked to a well-connected ATM network. As a result, making a cash deposit can be difficult.

3. Online Convenience

With online-only banking, many processes are expedited, such as opening an account, and you have access to your accounts 24/7.

Limited Account Options

Online-only banks may offer outstanding savings accounts at a high rate, but getting a matching checking account can be difficult.

Remember that you don’t have to give up your existing account at your local institution to start an online account. In reality, having accounts with both a traditional bank and an internet bank may provide you with the best of both worlds: the best savings rates and in-person assistance when you need it.

Which One Is Right for You?

Your financial interests and goals will determine whether a credit union or a bank is the best choice for you. A bank is a decent option if earning interest or borrowing money isn’t a top goal. You may manage your money from wherever you are by taking advantage of accessibility and convenience.

An online bank may be worth considering if you desire better rates and fewer costs but don’t need frequent branch banking services.

A credit union, on the other hand, maybe a better choice if you want to earn interest on your savings, checking, and certificate of deposit accounts, as well as take out a vehicle loan or mortgage. You should join a credit union if you wish to be a part of a community-based financial institution.

It’s possible that holding accounts with both a bank and a credit union is the best option for you.

Features Banks Credit Unions
Structure Profit-making Non-profit
Deposits interest rates Interest rates are generally lower at big national banks. Rates of interest are typically higher.
Deposit insurance FDIC insurance covers up to $250,000 per account. Up to $250,000 is insured by NCUA per account.
Customer service A lesser priority is given to interpersonal relationships. An emphasis is placed on local and personal involvement.
Access to Locations Regional banks do not have as many branches as national banks. Smaller branches count than banks, but they may share branches via a network.
Technology Apps and other tech are often rolled out faster. Generally lag in adopting new technology.

Types of Bank Accounts Available for Veterans

Below you’ll find the various bank account types that are available for veterans.

Checking Accounts

A checking account is provided by a bank or credit union and allows customers to pay bills and costs using paper checks, debit cards, or the internet. Many individuals use them for daily needs like paying for parking or buying gasoline or groceries because there is usually no restriction on how many times you can use the money in the account.

Unlike savings or money market accounts, most checking accounts are designed to pay for expenses only and do not generate interest on your balance.

Savings Account

A savings account is the adult equivalent of a child’s piggy bank. You’re putting money aside for a variety of reasons, from saving for a vacation to having an emergency fund, and you don’t intend to spend it anytime soon.

They offer interest on your money and have restrictions on how frequently you can withdraw funds.

High-Yield Savings Accounts

A high-yield savings account is a federally insured savings account that pays much higher interest than the national average. As a result, they can earn an APY (annual percentage yield) of roughly 0.40%.

These accounts are for keeping savings for future events as well as emergency needs. They offer a higher-than-average yield, letting savers achieve their financial goals more quickly.

Certificates of Deposit (CD)

Consumers utilize a certificate of deposit (CD) to save money for more extended periods of time. A CD is a secure way to save money because the federal government backs up to $250,000 of the money put into the account.

A bank or credit union can start a CD account for you. The account is known as a share certificate at a credit union.

Unlike ordinary savings accounts, it has a predetermined interest rate and withdrawal deadline. Although most CDs do not impose monthly fees, you may be charged a penalty fee if you withdraw before the maturity date.

Banks typically provide better interest rates on CDs than other accounts in compensation for this lack of flexibility.

Money Market Accounts (MMA)

A money market account is a savings account that pays interest on deposits and allows limited withdrawals.

Large banks and credit unions typically offer MMAs and can be used for both short and long-term savings.

The following are some examples of typical applications:

  • Savings for an emergency
  • An investment for a large purchase, like a house or a vehicle
  • Uninvested money that will eventually be invested in stocks, bonds, or another kind of investment

How Veterans Can Choose the Right Type of Accounts

When looking for a new account, you’ll notice a growing variety of options for managing your finances. Checking and savings accounts are available from a variety of banks. Some of them are simple. Some of them pay interest while others don’t.

So, which account is the best fit for you? Several factors influence the answer:

What Is Your Financial Goal?

Saving money for an emergency fund is better kept in a savings or money market account that can be accessed whenever necessary. If you’re saving for a specific goal with a set deadline (such as a vacation or a down payment on a property), a CD can be a good option.

In What Timeframe Do You Intend to Save?

If you have a plan for the money or an emergency reserve, it should be in an FDIC-insured, liquid bank. When saving beyond five years, consider taxable accounts, education, and retirement.

What Is the Frequency With Which You Need Money?

You’ll need a checking account for everyday transactions. Regulation D applies to savings and money market accounts, limiting you to six easy monthly operations such as online transfers and automatic bill payments. CD funds are locked up for a set period of time and can cost you money if you take them out too soon.

By answering such questions, you can establish a few criteria that will guide the account selection process.

What to Look For in a Military Bank

Veterans can get financial services from both military banks and credit unions. Almost 200 different banking institutions serve Military personnel. Here are a few things to consider while selecting the right one for you.

  1. Money security – Check if a bank or credit union is insured with the Federal Deposit Insurance Corporation (for banks) or the National Credit Union Association (for credit unions). You should not use a bank that is not insured.
  2. Charges – You should be able to find an account with no costs for basic account transactions. Monthly fees, per-check costs, and fees for account help are all fees to avoid (talking to a representative, using in-branch services.)
  3. Easy deposit process –  Even in this age of the direct deposit, everyone must occasionally deposit checks or cash. Even if your bank does not have a physical facility near you, they may provide mobile or home deposit services to help you make quick and easy check deposits. Think about how often you’d like to deposit cash and how you’d go about doing so. If you can’t envision yourself in a circumstance where you’d have to deposit some money, then it’s probably not a factor for you.
  4. Transaction fees at ATMs – If you use your ATM card regularly, you should consider the ATM fees your bank charges. Some banks give monthly ATM charge refunds up to a specified amount. This may be crucial if you travel regularly and can’t always use your bank’s ATMs.
  5. Interest rates – Interest rates operate both ways: you get a rate on your money on deposit at the bank, and you pay a rate when you borrow money on a credit card or a loan. You should look for an account that pays higher-than-average interest on deposits while charging lower-than-average interest on debts.
  6. Available online banking features –  Do you like to pay your bills online? Choose an option that offers this feature completely free. Do you need to send money to people frequently? Check to see if your bank is prepared to handle those transactions swiftly and efficiently.
  7. Minimum balance required –  Some accounts need you to keep a certain amount of money in your account before they start charging you fees. Check to see if any minimum balance requirements are something you can readily meet.
  8. Availability of branches –  Some consumers may be hesitant to use a bank that does not have a physical facility. Consider your wants and needs to evaluate if this is something essential to you.
  9. Support for customers – Find out which banks your friends prefer by asking around. When you have a problem or a question, the last thing you want to do is wait on hold or speak with an unhelpful or unfriendly customer care representative.
  10. The availability of funds – Active duty pay deposits might be released early in some banks. Many customers like this functionality.

As a retired veteran, we recommend going with a financial organization that is solely dedicated to servicing military personnel and provides competitive interest rates and insurance goods.

How to Find the Best Military Bank or Credit Union for You

Military people and their families have specific banking needs, so it can be challenging to decide on the best banks for veterans. Choose a bank that gives you the tools and resources you need to make sound financial decisions.

Veterans must find a military bank committed to serving former and active-duty military personnel. When it comes to banking alternatives that can help you manage your finances more efficiently, you must do your homework. Before you choose the finest military banks and credit unions for you, consider the following features:

  • Unwavering commitment to the military mission
  • No charge for checking
  • The ability to make a remote check deposit using a smartphone or scanner
  • ATM fee refunds and accessible ATMs
  • Mobile apps for full banking functionality
  • Comprehensive financial services, including insurance, investments, and loans
  • The availability of physical branches, as well as excellent mobile banking services
  • Various features are also available, such as interest rates for savings accounts and CDs

How to Open a Bank Account

If you meet the qualifications for a bank account and want one, here’s how to get one quickly and easily.

Choose a Financial Institution

Your preferred bank should explain to you the rewards, perks, locations of ATMs, and types of accounts they offer, in addition to the monthly fees you will incur if you open an account.

Gather Important Documents

Prepare the following items before opening a bank account:

  1. A government-issued identification card (such as a driver’s license, passport, or military identification card)
  2. Social Security Number (SSN)
  3. Your mailing and physical addresses
  4. A first-time deposit (if required)

Fill Out the Application Form

Banks may also want you to fill out a new account application. This entails supplying extra details such as your address, phone number, and email address. If you’re opening a joint account, you’ll need that person’s ID and Social Security number as well.

Go to the local branch or website to learn more about their application procedure and to apply.

Fund Your Account

When you open a checking or savings account, you’ll often have to make a deposit. It is sometimes necessary as part of the account opening procedure, and other times it is optional. You can fund your account in a variety of ways:

  • Cash deposits
  • Deposit by money order or check
  • Activate direct deposit
  • Electronic fund transfers

How to Open a Bank Account in 4 Steps

Can You Open a Bank Account Online?

It is quick and straightforward to open a bank account online. It only takes a few minutes and saves you a trip to the bank. It may also be your only option if you’re creating an account with an online bank. The best online banks are FDIC-insured and offer better rates than traditional brick-and-mortar banks, with little or no fees.

Can You Be Denied a Bank Account?

Banks may refuse applications to open accounts for potentially problematic consumers.

ChexSystems is the company that keeps track of people’s bank accounts. If you fail to pay a fee that a bank has charged you, such as an overdraft fee, the occurrence will be noted in the bank’s records. Other banks may refuse to open an account for you if you have a history of unpaid fees.

Balancing Your Checkbook

Balancing your checkbook, also known as reconciling your account, is ensuring that the records you’ve kept for your financial activities correspond to the bank’s data on your statement. There are several reasons to support such a record and balance it regularly:

  • If you reconcile frequently, you’ll be able to discover merchant problems sooner.
  • Keeping track of your financial transactions might help you keep track of your spending and make budgeting easier.
  • It’s also simpler to spot missing automated payments, wrongly applied fees, and fraudulent charges.

You can reconcile an account much more quickly today with your banking app or budgeting software.

How Veterans Can Avoid Banking Fees

Knowing the most frequent banking penalties and fees, as well as how to avoid them, can help you save money. Here are a few tips for maintaining your financial scoreboard in your favor.

1.   Maintenance fees

Some banks charge a maintenance (or monthly) fee if you go below a certain balance in your account.

How to Avoid this Fee:

  • Make informed banking decisions. Use your direct deposit to help you avoid paying fees in one of your accounts. Examine and select a bank that either does not charge these fees or has conditions you can meet. For other accounts, seek banks that have no or a low minimum balance requirement.

2.    ATM withdrawal fees

Most banks do not charge consumers to use their ATMs, but fees for using another bank’s ATM network, known as out-of-network fees, are rising.

How to Avoid this Fee:

  • Many banks have a broad ATM network or eliminate ATM fees if you use a machine from another bank. Look for a bank that will not charge you an ATM fee if you use a machine close to your home.

3.    Overdraft Protection

Many banks provide overdraft protection if you overdraw your account by making purchases or using your debit card. This allows you to make transactions or withdraw money, but it also charges you a fee of roughly $34.

How to Avoid this Fee:

  • Before you use your debit card or write a check, verify your checking account balance. This is the most effective approach to avoid paying the fee.

4.    Paper statements

Many banks now impose paper statement fees, so receiving statements in the mail can be costly.

How to Avoid this Fee:

  • When you open a new account or log in for the first time, sign up for paperless statements.

Major Banks With Military Accounts

Military personnel can open accounts with a variety of major financial institutions. These frequently include free checking (direct deposit is typically required) and other banking benefits. Compare their features to those of your present bank and the military institutions most suited to your demands.

Chase Bank – Chase Military Banking

For its military banking features and efforts, Chase Bank merits excellent credit. While they are not an army banking institution, they provide an army banking product for current and former military personnel.

Not only that, but through the Veteran Jobs Mission, Chase supports the military and veteran community.

US Bank Military Banking

Checking account with no fees, online and mobile banking, unlimited free ATM transactions at non-US banks, free remote check deposit, and more.

On new rentals, there is a 50% discount on the annual charge for safe deposit boxes. Checks with the US Bank emblem are free, while all other personal styles are 50% discounted.

Overdraft protection transfers are free, and there is no monthly maintenance fee on additional Easy Checking accounts.

Find out more about US Bank Military Banking.

Bank of America Military Banking Online

Checking, savings, credit cards, auto, home, and personal loans, VA loans, credit cards, online and mobile banking, free bill pay, and more are just a few of the account types available.

To learn more about the Bank of America Military.

Wells Fargo Military Banking

Wells Fargo is a global financial institution that also caters to military personnel. It has over 8,000 branches, 13,000 ATMs, and more than 35 countries, serving 70 million customers worldwide.

Using military-themed features (such as a “non-civilian” direct deposit) has some prerequisites, including confirmation of military service.

Local and Regional Credit Unions for Veterans

Don’t forget to look into the credit unions in your area or at your base. Many financial organizations are more convenient if you need to go to a bank or credit union in person.

In certain circumstances, you may have to open a separate account with a bank or credit union if you are stationed abroad and need to open an account in the local currency. If a credit union has a branch in another country, it may provide foreign currency accounts. This service is not always available at larger institutions.

Determine essential items for you, and then find the best service for your needs.

Veterans Can Use Banking to Reach Financial Goals

Your goal may be to send your kids to college, to buy your dream home, or to retire early-but if you have not already developed a financial plan, now is the time. Here are financial planning tips to get started.

Start an Emergency Fund

An emergency fund should be large enough to cover three to six months’ worth of living expenses so a layoff or injury will not leave you deep in debt.

Automate Your Savings

It’s a good idea to automate your savings so that you pay yourself first once you’ve tweaked your costs to free up a significant chunk of cash each month. You can set up an automatic transfer with your bank to have a portion of each paycheck sent immediately to a savings account if you want to bolster your emergency fund or set away funds for a short-term goal.

Sign up for your company’s 401(k) plan and have money withdrawn from each paycheck if you want to automate your retirement savings. Automatic transfers to an IRA are also available through several financial institutions.

Look Into Investment Options (401k, IRA, Etc.)

Use the Savings Deposit Program to your advantage (SDP). You can save up to $10,000 in the SDP while you’re deployed. All funds are placed to earn a 10% yearly interest rate.

Consider joining the Thrift Savings Plan (TSP), which is the military’s counterpart of a 401(k) plan (k). TSP began as a tax-deferred investment program (meaning you don’t pay taxes on any money you put in until you withdraw it after you’ve reached the age of 59 ½.

TSP now includes Roth IRA-style investment alternatives that allow you to invest money that has already been taxed, enabling you to pay today’s tax rates rather than tomorrow’s. Look into other civilian investment and retirement savings options.

Build Up Your Credit

It is essential to establish strong credit and a positive credit rating. Encourage yourself to limit your credit card usage to one or two cards, ideally with low interest and no fees, and to charge just what you can afford to pay off each month.

If you have a credit card balance and pay an interest rate in the upper single digits, paying it off will save you more money in interest than investing.

Take Advantage of the Veterans Benefits Banking Program (VBBP)

The Veterans Benefits Banking Program (VBBP) was created between the VA and the Association of Military Banks of America (AMBA). It may enable veterans with credit or legal concerns and limited access to banking institutions to get financial assistance.

Each financial institution that participates in this program is dedicated to aiding veterans, and their families find banking options tailored to their specific requirements and qualifications.

This program’s financial firms provide assistance, education, and banking solutions that lead to better financial independence, understanding, and recovery under challenging circumstances. Furthermore, the program’s increased services will assist veterans in managing their benefits, reducing the number of fraud instances reported to the VA.

Eligibility

Veterans who get VA financial benefits but do not have a current financial business to assist them in managing their money, such as veterans who receive pre-paid cards or checks in the mail, are eligible to engage with VBBP financial institutions.

To determine their eligibility, veterans must consult with a financial institution.

Related:Best Military Banks and Credit Unions for Veterans & Active Military
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