Friday, March 14, 2008

Savings Deposit Program

The Savings Deposit Program is an incredible program that very few people seem to know anything about. I had never heard of it before my CO brought it up to me the other day, but I wish I had.

Do not confuse this with TSP or any other retirement account. This is an investment account, it would be subject to regular tax rules, but in a combat zone there is no tax, so it's academic anyway.

You are only eligible for SDP when you are receiving Combat Pay. The program allows you to deposit up to $10,000. The money will accrue interest at 10% APR guaranteed! That's quite an offer in this market, where even conservative S&P index funds are turning up losses. This is a risk-free investment, like a savings account on steroids.

As if that wasn't good enough, the interest is compounded quarterly! Watch the $10,000 cap though, you will not receive any interest on money over the limit, so withdraw the accrued interest at the end of each quarter.

If you don't have the 10G to drop in from the get-go, you can set up an allotment. So now all that extra combat money can really work for you while you're gone, and keeping it out of the checking account can help your family avoid frivolous temptation. You can set up the allotment or make a deposit with your local PSD or check with your admin department.

Here's a link to DFAS
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