Members of the military have unique financial needs. They are on the move, both across the United States and around the World.
To meet their unique needs, USAA promises to provide best-in-class financial products and customer service to their members. Does USAA Federal Savings Bank deliver?
USAA Basics
USAA is a credit union designed to meet the needs of military members and their families. You can check here to see if you qualify to join USAA.
USAA has one of the best track records for keeping customers over the long haul. Their best-in-class customer service, leading edge security, and ability to meet all their customer’s financial needs makes it an obvious choice for military members.
When you look objectively at the financial products that USAA offers, you’ll see that they aren’t obviously the best at anything. It’s the package as a whole that keeps customer satisfied.
Checking Accounts
One of USAA’s standout financial products are their checking accounts. The checking accounts have no monthly maintenance fees, and no minimum balance. You need just $25 to open up the account.
Even better, USAA helps their members avoid overdraft fees (which run $25 at USAA). If you overdraft by less than $5, USAA won’t charge you an overdraft fee. Members can link their checking account to a USAA savings account or credit card to avoid overdraft fees too. On top of that, USAA will never charge more than two overdraft fees per day, and you’ll never incur more than one fee per overdraft item.
On top of more generous than average overdraft protections, USAA helps you get access to your money for free. You can withdraw your money from one of USAA’s network of 60,000 Nationwide ATMs. Members get 10 free withdrawals per month. If you accidentally hit up an out of network ATM, USAA will refund up to $15 in ATM fees per month.
The one area where USAA checking accounts fall short is in their capabilities abroad. USAA charges a 1% foreign transaction fee on all debit transactions, and they don’t have ATMs abroad. That said, USAA will still refund up to $15 in ATM fees if you use an ATM in a foreign country.
Technically, USAA checking accounts with more than $1,000 earn interest. Today, the interest rate on these accounts is .01% annually.
Savings Accounts
The USAA savings accounts aren’t nearly as exciting as the USAA checking accounts. Right now, interest rates on the accounts range from .05-.15% depending on your balance. If you’ve got more than $10,000 in your account you can open a Performance First Savings account with rates from .2-.3%.
The rates aren’t spectacular, but the Savings accounts have a few helpful features. Most obviously, USAA members can keep their checking and savings account at the same bank.
USAA also has a cool technology that helps members create savings goals and track their progress towards the goal. Not seeing the type of traction you want? USAA’s online platform will also help you analyze and set your budget.
If you struggle to stay motivated with a savings goal, the goals feature could help you move in the right direction.
CDs
CD ladders can help you prepare for ongoing cash flow needs. Unfortunately, the CDs at USAA offer lame interest rates. A two year, fixed rate CD yields just .81% right now. USAA also offers adjustable rate and variable rate CDs with even lower interest rates.
Right now, other banks offer CDs with rates up to 2.4%. It doesn’t make sense to settle for USAA’s extremely low interest rates.
Other Services
In addition to Checking, Savings and CDs, USAA offers a bevy other financial services for their members. USAA is known for having some of the best Auto and Term Life Insurance rates in the business. They do not offer nationwide homeowners coverage (people living near coastal areas usually can’t purchase through USAA), but it otherwise has a good reputation.
On top of that, USAA members can expect reasonable interest rates on mortgages, auto loans, personal loans and credit cards.
If you’re a military investor, you can also choose to house your investments at USAA. Their expense ratios tend to run higher than the industry standard though, so investing through USAA isn’t always the right choice.
Still, anyone who values having all their financial services under one roof can rest easy that USAA will bend over backwards to offer them what they need. Since it’s a credit union, most of the fees are reasonable, even if they aren’t world-class.
Final Thoughts on USAA Federal Savings Banks
For military members and their families, USAA offers a quality financial experience. Their members can expect great customer service and fair pricing on all their products. For young military members, the checking account and easy access to a savings account make a lot of sense.
If you’ve got a straightforward financial life, it can make sense to buy all your financial products through USAA. Once you start getting into investing and buying more insurance products, it pays to shop around. When it comes to banking, loyalty only makes sense for so long. Eventually, you need to find the best deals.
What do you think of USAA bank?
USAA Federal Savings Bank Review
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USAA Free Checking - 100
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USAA Savings - 95
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USAA CDs - 90
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USAA Insurance - 100
Summary
USAA Federal Savings Bank is one of our favorite banks because they offer one of the truly free checking accounts we can find. The also offer a variety of other banking products, including savings, CDs, and even insurance.
I have been with USAA for forty years. Recently, the credit card administration has caused me lots of concern. In November, they sent my two payment checks back saying they could not take payment because it was over the amount (at the time) owed. They sent them back in one envelope. Then, when they waited for my reply, they charged me a late fee. I sent two new checks in one envelope to the bank and they lost one of the checks. When I called to inquire, I got the answer, “just stop payment on the check”. I am sorry but I rate them two out of five. As for caring for service members, that hype stops when they want to change their policies to serve their accountants. I am going with another card company.