Savings Deposit Program a Military Deployment Investing Secret

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Military Savings Deposit Program (SDP)

What is the Savings Deposit Program? The Military’s Savings Deposit Program (SDP) is the military’s BEST kept investing secret.

Don’t get this confused with the Thrift Savings Plan (TSP). TSP is available to everyone in the military.

The Savings Deposit Program is only available to those serving in designated combat zones.

What makes it the BEST kept Investing Secret?

The Military Savings Deposit Program (SDP) is a DoD sponsored savings account that offers deployed military members a GUARANTEED return on investment of 10% interest, compounded quarterly.

Yes, you heard correct.

Not maybe, not by luck, but 10% guaranteed!

Fund managers steer clear of insuring a return of investment. Why? Because the market fluctuates and depending on the market trends, can be very volatile.

So why does the DoD offer this program?

The program was designed to provide members of the uniformed services in designated combat zones an opportunity to build their financial savings.

In a way, the program was designed to thank service members for serving in combat zones overseas.

The SDP was originally started during the Vietnam War as an investment opportunity for veterans serving in Southeast Asia.

The program eventually went away, but was resurrected during Desert Storm in 1991 and then offered to troops in Bosnia in 1996.

The program further expanded again in 1997, 2001, and 2003.

Ten Percent Adds Up!

The table shows the impressive gains from even short-term deposits to an account earning 10 percent, compared to placing it in a regular savings account or doing nothing.

Pros and cons of DoD Savings Deposit Program (SDP)

Advantages of the Savings Deposit Program:

  • 10% interest… Need I say more? It’s nearly impossible to find a guaranteed return on investment of 10%.
  • 90 days additional growth. You can earn interest on your SDP deposits for up to 90 days after you redeploy. An extra quarter of interest could be worth over $100.

Disadvantages of the Savings Deposit Program:

  • Income is taxable. Interest earned in your Savings Deposit Program is taxable, even though your income while deployed is not taxable.
  • Paperwork. You have to fill out forms to start the program and make withdrawals. The forms aren’t a big deal, but you have to make the time for it.
  • Messing with your military paycheck is never advisable. You must start and stop allotments each time you alter your contribution amount, and your military pay must be coordinated with the Savings Deposit Program. This can be a hassle sometimes.
  • It can take awhile to max out your contributions. Junior enlisted members may not be able to max out the SDP plan because it would take several month’s worth of paychecks.
  • Your contributions are tied up until you return home. You cannot make withdrawals until you return from the deployment. This is not an emergency fund! 

Even though there are several listed disadvantages, the guaranteed 10% return on interest is tough to beat.

Am I eligible?

You’re eligible to use the Savings Deposit Program, if:

  • You’re active duty or an activated Guard or reserve member. In both cases, you must be deployed receiving Hostile Fire Pay (HFP)/Imminent Danger Pay(IDP).
  • You deploy to an area in support of Operation Enduring Freedom/Operation Iraqi Freedom. You’re also eligible if you deploy to other contingency operations where you receive HFP/IDP.
  • You serve in the combat zone or in direct support of a designated combat zone. You must serve for more than 30 consecutive days.
  • You serve in the combat zone for at least one day for three consecutive months. This situation is likely if you’re in a special operations unit.
  • You’re serving in OEF/OIF in the Arabian Peninsula area. This includes the Persian Gulf (the Arabian Peninsula, the Strait of Hormuz, or the Gulf of Oman), Bahrain, Iraq, Iran, Israel, Jordan, Kyrgyzstan, Kuwait, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Tajikistan, Turkey, United Arab Emirates, Uzbekistan and Yemen.

Your eligibility for the program stops the day you leave the designated combat area and redeploy home.

How do I make deposits?

Setting up regular deposits from your pay is easy. Here are some tips and program restrictions:

  • Setting set up allotments. Contact your finance office to start or stop allotments into the SDP, or make deposits with cash, a personal check or a traveler’s check. Your spouse or a trusted family member can also start and stop allotments on your behalf with a special or specific power of attorney.
  • Power of attorney requirements. Visit your legal assistance office for advice on the power of attorney requirements and help preparing a special or specific power of attorney. Find your legal assistance office with the U.S. Armed Forces Legal Assistance locator.
  • When to begin deposits. You can start depositing into your account 31 days into your deployment. This is the only time you can start deposits, but you can stop making deposits at any time.
  • How much to deposit. Deposits can’t be more than your monthly current pay and allowances after allotments. You can’t go over your monthly pay after all deductions and allotments, including special pays and reenlistment bonus. Deposits must be made in amounts divisible by five, like $50, $115, and so on. You can make more than one deposit in a month.

How do I make withdrawals?

Ordinarily, funds from your SDP account must be withdrawn in one payment after you redeploy home.

You may not withdraw funds while deployed except in emergency cases. But there are exceptions to this rule.

The general rules for withdrawals are:

  • Request the funds after you return home. The Defense Finance and Accounting Service will post your account money to your leave and earnings statement. Interest will be added from the date of your deposit, regardless of the date of your withdrawal. The service will pay out any interest owed.
  • Request emergency funds during the deployment. Emergency withdrawals must be only for the health and welfare of the service member or immediate family and require approval from your unit commander or commanding officer. Submit the approval to DFAS.
  • Make withdrawals if the maximum balance is reached. If your account contains more than $10,000, you or your spouse can make quarterly withdrawals for the amount over $10,000.
  • Follow withdrawal procedures. Active duty service members will receive their payment electronically to the same account that receives their monthly pay. Reservists and separated members submitting withdrawal requests to DFAS must include the bank account number where the funds should be deposited, the type of account (checking or savings), the bank’s routing transit number, and a voided check or a deposit slip. If a check is preferred, a current address must be provided.


I won’t tell you should do it, I took advantage of the Savings Deposit Program while I was deployed. I am due to deploy soon and will take advantage of the program again. I honestly can’t turn down free money.

This program works best if you can max out your contributions or at least come close. However, free money is free money. So even if you can only contribute a little, make your money work for you!

Lastly, if you do take advantage of this program, leave your deposits in for the full 90 days after you come home to take advantage of the additional quarter of compound growth.

Was this Savings Deposit Program article helpful for you? Let me know in the comments below.

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