The Savings Deposit Program (SDP) is a savings initiative for service members actively deployed in designated combat zones. The U.S. Department of Defense (DOD) provides the SDP as a benefit to eligible military personnel, helping them to further their financial goals during deployment.
Key Features and Benefits
Eligibility
The SDP allows military personnel to earn interest on their deposits, provided they adhere to specific rules regarding contributions and withdrawals.
Military personnel are eligible to contribute to an SDP if they meet the following criteria:
- Are on active duty or serving as activated reserve members.
- Are deployed in a designated combat zone for at least 30 consecutive days or at least one day in three consecutive months.
- Are receiving imminent danger pay (IDP) or hostile fire pay (HFP).
Deposits
Eligible service members can deposit funds into a Department of Defense-designated SDP.
Key features of SDP deposits include:
- Service members may deposit up to $10,000 into their SDP account during deployment.
- Deposits must be in multiples of $5 and cannot be less than $5 per transaction.
- Service members can contribute up to their full unallotted monthly pay.
- Service members must contact their finance office to open the SDP account and initiate deposits.
- Service members can make deposits via checks, cash, or through allotments from their pay.
- SDP deposits earn a competitive 10% annual interest rate, compounded quarterly, on amounts up to $10,000.
- Deposits via allotment are only permitted for service members receiving imminent danger pay (IDP) or hostile fire pay (HFP).
- Service members may still make deposits after leaving the combat zone if they missed contributing during deployment, up to the $10,000 limit.
- Service members can earn interest for up to 90 days after leaving the combat zone, even if they don't withdraw the full amount immediately.
Withdrawals
Key features of SDP account withdrawals include:
- When the SDP account holds $10,000 or more, a soldier may withdraw any amount exceeding $10,000 every quarter.
- A minimum deposit of $10,000 must remain in the SDP until the service member's eligibility period ends. Then, the soldier can withdraw the total amount from the account.
- The soldier's SDP must be closed, and all funds must be deposited into their military-approved pay account within 120 days after leaving the combat area.
- Except in emergencies, the soldier cannot withdraw the minimum deposit of $10,000 from the SDP before leaving the combat area.
- Emergency withdrawals are allowed for the soldier's or their dependents' welfare and health. Such withdrawals require written approval from the unit commander.
- Soldiers may request an emergency withdrawal of SDP funds before the 120 days through their myPay account.
- SDP account holders can request an emergency withdrawal by submitting an askDFAs ticket, including a copy of the Commanding Officer's authorization letter.
How to Enroll and Manage Your SDP Account
How to Begin SDP Deposits
Deductions for SDP deposits are directly from the soldier's paycheck.
The SDP enrollment process is as follows:
- The soldier must visit a branch of their service's admin/finance office.
- They should bring a copy of their Leave and Earnings Statement (LES) and decide on the amount they wish to contribute.
- The minimum contribution allowed per transaction is $5. In contrast, the maximum contribution is the soldier's entire military pay after deducting previously set-up allotments.
- The maximum contribution amount for an SDP is $10,000. SDP account deposits will earn interest if made on or before the 10th of each month. To maximize interest, soldiers can contribute up to 100% of their paycheck to an SDP and live off their savings.
How to Begin SDP Withdrawals
The type and amount of SDP withdrawal will depend on whether you wish to receive the money before or after leaving the designated combat zone.
Withdrawal After Leaving the Combat Zone
- After leaving the combat zone, the soldier can withdraw the entire amount in their SDP account. The withdrawal options include:
- Depositing the amount directly into their myPay account.
- Requesting the amount by email or direct mail.
- When 120 days have passed since the soldier left the combat zone and they have not requested a withdrawal, the amount will be deposited automatically into the account linked to their myPay.
Withdrawal Before Leaving the Combat Zone
- Soldiers can access any quarterly interest on their SDP deposits. Yet, they cannot withdraw their original contributions before leaving the combat zone.
- However, the commanding officer can approve less than $10,000 in emergency withdrawals.
Takeaway
The Savings Deposit Program (SDP) allows eligible military personnel serving in combat zones to save money at a high-interest rate of 10% annually, compounded quarterly. With a maximum deposit limit of $10,000, the SDP provides a secure way for service members to grow their savings while deployed. Service members can make withdrawals upon leaving the combat zone, with emergency withdrawals available under special circumstances.