Combat deployments are hard, but you can make the most of your situation by using combat payments wisely. The military offers many ways to make the best of your extra income. One program is the Savings Deposit Program (SDP), a savings account with ten percent interest. All active duty and activated Guard and Reserve members are eligible for this savings program during deployments where they receive Hostile Fire Pay/Imminent Danger Pay (HFP/IDP).
The SDP is different from other military savings accounts, such as the Thrift Savings Plan (TSP). The SDP is available only during combat deployments. Even though your income is tax-exempt during deployment, interest earned on money deposited in the SDP is taxable.
You are eligible to use the SDP when:
- You are deployed to an area in support of Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF), or other contingency operations where you are receiving HFP/IDP.
- You serve in the combat zone or in direct support of a designated combat zone for more than thirty consecutive days.
- You serve in the combat zone for at least one day for three consecutive months. This situation would more than likely occur if you are in a special operations unit.
- You are serving in OEF/OIF in the area of the Arabian Peninsula including 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. For more information about the SDP, visit the DoD Savings Deposit Program.
Benefits of the SDP
The SDP is easy to use and can help your family reach financial goals. With the program, you can:
- Choose how much to deposit. Deposit all or part of your un-allotted pay (the pay you receive after authorized deductions) up to $10,000 per deployment.
- Earn a high interest rate on your money. You will earn ten percent annual interest during the deployment. This interest rate is much higher than on commercial savings accounts, most of which earn no more than one or two percent annual interest.
- Earn after you return home. Continue to earn ten percent interest for ninety days after you redeploy home, unless you request to withdraw funds before then.
- Gain something positive out of a tough situation. Coming home to extra savings in your account may help reduce some of the stress that financial issues can cause and help you pay down debt or contribute toward a financial goal.
- Manage your account easily. You can monitor and manage your account through MyPay. If you set up automatic allotments, check your leave and earnings statements regularly.
- Stop depositing money at any time. There is no penalty for stopping deposits into your SDP.
Deposits and withdrawals
Putting money into your SDP and withdrawing it is simple. A family member with an appropriate special or specific power of attorney can start and stop allotments into the SDP. Service members can also set up automatic deposits into the account.
Your Legal Assistance Office can advise you on the power of attorney requirements and help you prepare the appropriate special or specific power of attorney. Find the Legal Assistance Office near you with the U.S. Armed Forces Legal Assistance locator.
To start your SDP allotment, you, your spouse, or a trusted family member (with a special or specific power of attorney) can contact your finance office to set up allotments - just as with any other allotment. You can also use cash, a personal check, or a travelers check. There are a few restrictions for deposits:
- When to begin deposits. You can only start depositing into the SDP thirty-one days into your deployment. 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 in five-dollar increments. Deposits must be made in amounts like $50, $110, and so on. You can make more than one deposit in a month.
Ordinarily, you must withdraw the funds in one payment after you redeploy home. You may not withdraw funds from your SDP account while deployed except in cases of emergency. But there are exceptions to this rule. Generally:
- You can request the funds after you return home. The Defense Finance and Accounting Service (DFAS) will then 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. If any extra interest is owed, it will be paid out.
- You can request emergency funds during the deployment. The withdrawal of these funds must be only for the health and welfare of the service member or immediate family. If you need emergency funds, you must get approval from your unit commander/commanding officer and submit the approval to DFAS.
- Withdrawals are available if the balance is reached. If your account contains over $10,000, you or your spouse can make quarterly withdrawals for the amount over $10,000.
- You must follow withdrawal procedures. Active duty members will receive their payment electronically to the same account that receives usual monthly pay. Reservists and separated members withdrawing their money must include the bank account number, type of account (checking or savings), the bank's routing transit number, a voided check, or a deposit slip in their request to DFAS. Reservists and separated members requesting payment by check must provide a current address.
If you are the spouse of the deployed service member
You can start or stop allotments into the SDP only if you have a special or specific power of attorney authorizing you to start or stop enrollment in the program. The special or specific power of attorney must also state the amount to be deposited into the program.