The Savings Deposit Program

The short version

The Savings Deposit Program (SDP) is one of the best guaranteed returns in personal finance, and only deployed service members can use it. Deploy to a designated combat zone and you can deposit up to $10,000 that earns a guaranteed 10% annual return.

There is no catch and no market risk. It is run by the Defense Finance and Accounting Service (DFAS), and the 10% is set by law.

10% guaranteed, up to $10,000

Most high-yield savings accounts pay a few percent. SDP pays 10%, compounded quarterly, on balances up to $10,000. The interest keeps accruing for a window after you leave the combat zone, so the benefit does not stop the day you redeploy.

How it works

• Guaranteed 10% annual return.
• Up to $10,000 in deposits.
• Interest compounds quarterly.
• Keeps earning about 90 days after you leave the zone.

Who qualifies

• Deployed to a designated combat zone.
• Generally 30+ consecutive days (or one day in each of three consecutive months).
• Start it through your finance office.

$10,000 at 10% is about $1,000 a year, risk-free. Few deployments offer a better use of cash you do not need right now.

Source: DFAS; Military OneSource

Get the money in early

The sooner you fund SDP, the more interest you earn, so deposit as much as you can toward the $10,000 cap early in the deployment. You can fund it through allotments and manage it through myPay. Interest stops about 90 days after you leave the combat zone, and your funds are returned automatically roughly 120 days out unless you withdraw sooner.

Where SDP fits

SDP is for cash you will not need during the deployment, not your emergency fund back home. Because the return is guaranteed and tax-advantaged deployment pay may already be flowing, many members use a deployment to max SDP, build savings, and come home with a head start.

Smart moves

• Fund to $10,000 early.
• Leave it until after you redeploy to capture the post-deployment interest.
• Have a plan for the cash: emergency fund, debt, or TSP.

SDP is a sprint, not a marathon: the cap is $10,000 and the window is the deployment plus about 90 days.

Source: DFAS

Do this now

1. Confirm eligibility with your finance office once in the combat zone.
2. Fund toward $10,000 early to maximize interest.
3. Track it in myPay.
4. Plan where the money goes when it is returned after deployment.

FAQ

Is the 10% really guaranteed?

Yes. The rate is set by law and paid by DFAS. There is no market risk.

Can I deposit more than $10,000?

Only the first $10,000 earns the 10% rate. Plan around the $10,000 principal cap.

Is SDP interest taxable?

Yes, the interest is taxable income even though much of your deployment pay may be tax-free. You will get a tax form for it.

When do I get my money back?

Interest accrues for about 90 days after you leave the combat zone, and the balance is returned automatically around 120 days out unless you withdraw earlier through myPay.

Sources & links

• DFAS, DoD Savings Deposit Program: dfas.mil
• Military OneSource, The Savings Deposit Program: militaryonesource.mil