January 14, 2008 • June Walbert
Q: I am an active duty Navy Corpsman currently serving in
Iraq and was wondering if you had any information on the Deferred
Savings Program. I was told that it offers 10% to only those serving in
combat zones. If you have any information in this issue please let me
know.
- Jorge, Newbern, NC
A: Thanks so much for your service. The Savings Deposit Program (SDP)
is an excellent way to set aside some money and earn a great guaranteed
interest rate while serving in a combat zone. I know from firsthand
experience; I did it while I was deployed! Here's how the program
works: you deposit up to $10,000 via an allotment, or check, it earns
10 percent interest annually while you are deployed. The deposit will
continue to accrue interest for 90 days after your return at which time
it's a painless process to have the monies transferred to your bank
account. Your local finance office can set it up.
This is a great alternative to a low interest saving, checking
account or even a high yield money market account! However, you must
keep in mind that the money you deposited in the SDP is generally not
available to you until your redeployment. Emergency withdrawal requests
must be for the health and welfare of you or your dependents and must
be substantiated by a written request from the member's unit commander.
For more information from DFAS, visit the following website.
One important caveat: If you have credit card debt, that tax-free
combat pay is the perfect opportunity to eliminate it and put yourself
on a firm financial footing. First thing's first!
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June Walbert is a CERTIFIED FINANCIAL PLANNER TM practitioner with USAA Financial Planning Services, one of the USAA family of companies.
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