What are the benefits of using a military bank? Depending on the financial institution you could get perks including early low interest rates, and even more forgiving loan requirements based on your status as a currently serving member of the United States military.
But those are the most obvious benefits. With a guaranteed income, those who serve are perceived to be better credit risks and reduced rates and fees are often contingent on having your milpay or military pay on direct deposit with your financial institution. It’s no surprise that lenders and credit unions want military customers for this reason.
What Is A Military Bank?
For this discussion, a military bank does not have to be a military-only credit union or a military-centric financial institution like USAA. Any bank that offers a military program including Bank of America, PNC, and others is included for the purpose of this discussion.
That said, there are perks to joining a military-focused bank or credit union that you may not find with conventional lenders who also cater to those in uniform. But much depends on the company and you will do well to shop around for a lender with the most favorable terms and conditions.
Banking Benefits For First-Term Military Members
Some people join the Army, Navy, Air Force, Marine Corps, or Coast Guard right out of high school, and others may join later but still in their early 20s. These new recruits don’t always have good credit–or ANY credit–when they sign up.
Military banks and military-friendly banks often provide credit-building secured credit card options designed especially for first-term recruits. These options can help build credit, repair credit, or get you ready for a bigger line of credit with that bank after its terms and conditions are met. If you are a new recruit, be sure to ask any lender or financial institution about programs offered to people in your age demographic that can help in this way.
Military Banking Benefits: Early Deposit Of Military Pay
Not all financial institutions feature early deposit (often one full business day before the pay date on your Leave and Earnings Statement (LES)) but a significant number of them do.
Having access to your money a day early provides some flexibility, especially for first-term airmen, soldiers, sailors, Marines, and Coast Guard troops who are at the lower end of the pay scale depending on time in grade and time-in-service.
Your bank will require you to have direct deposit for your military pay in order to claim this benefit, and restrictions may apply–be sure to ask what the terms and conditions are for early deposit.
It’s a very good idea to apply for some form of overdraft protection if you find yourself depending on this early deposit benefit–don’t subject yourself to additional fees if you accidentally overspend. And that’s very easy to do ahead of a TDY, permanent change of station move, or deployment.
Military Banking Benefits: More Competitive Terms
How competitive? Some military credit unions, such as Navy Federal (NFCU) have in the past offered interest-bearing checking accounts to veterans as well as monthly fee waivers for qualifying military accounts.
Others may offer ATM fee rebates for using in-network machines, and others may waive account opening fees or monthly minimum balances.
Bank Of America offers military communities more competitive interest rates on lines of credit, auto loans, and home loans, and so do many others. But you’ll definitely want to compare those terms with military-focused institutions like Navy Federal Credit Union, USAA, Pentagon Federal, etc.
Military-Friendly Credit Card Options
Many banks (military-focused or not) offer those in uniform credit card offers with frequent flyer miles and other perks. Those who do a high or even a moderate level of official travel may do well to apply for one of these credit cards–you can’t use your civilian credit card to pay for official travel expenses, but you can use the card while deployed, TDY, or during a PCS move to pay for your personal (non-duty-related) purchases and rack up reward points.
And don’t forget that you have built-in protections thanks to the Servicemembers Credit Relief Act (SCRA)–if you are looking at non-military banks like PNC, Chase Bank, or any other civilian agency, try to include banks that offer specific SCRA assistance.
PNC Bank is a good example of this–the company features something called the Servicemembers Operations Center (SOC) which was created to be the “single point of contact for service members requesting Servicemembers Civil Relief Act (SCRA) Program Benefits and/or protections” with that lender.
PNC isn’t the only financial institution to offer this–compare and contrast each bank to see who offers you the most help.
Things To Know About Military Banking
The military places a high priority on financial responsibility. When you join the military, you are expected to be mindful of your credit, paying your bills on time, and keeping your personal credit accounts completely separate from your military travel card charges.
Most financial institutions have tools you can use to pay all your bills on time, and they can help you avoid late fees and other problems associated with late or missed payments.
You will need to use your credit responsibly, but depending on the financial institution you can get help if you run into financial trouble.
Many military members fall on hard financial times and it’s expected (by the lender) that you will reach out to make arrangements if you cannot pay on your military bank credit card account, home loan, auto loan, etc. Don’t give your lender the “silent treatment” if you cannot pay–contact your bank and make arrangements to stay out of financial trouble with your creditors AND your chain of command.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News