What Is a Military Bank?

A military bank is a financial institution that offers services tailored to members of the armed forces. Military banks are popular among service people because they offer various types of specialized accounts, perks and benefits, and services and options accommodating military lifestyles. While some banks target a broader audience, military banks primarily focus on and cater to military personnel.

Key Takeaways

  • Military banks are financial institutions that offer services and products created especially for members of the armed forces.
  • Some military banks are located near or on military installations and offer services that accommodate those who are deployed or travel frequently.
  • Traditional banks target a broader consumer base but may offer products and services for military personnel, including veterans.
  • Members of the military must exercise due diligence when reviewing banking options and not assume that a military bank will be the best choice.

Understanding Military Banks

Some military banks require customers to have a military affiliation, either directly (active members or veterans) or indirectly (e.g., spouse or dependent of a member of the armed forces), to use their services. USAA (one of the oldest U.S. military banks, founded in 1922), Navy Federal Credit Union, Air Force Federal Credit Union, Pentagon Federal Credit Union, and Armed Forces Bank are examples of military banks exclusively devoted to service members. Mainstream banks like U.S. Bank, Bank of America, Wells Fargo, Chase, PNC, and many others also have services specifically geared toward military members.    

Individuals who serve in the military, along with their families, have unique banking needs that military banking services are designed to meet. Frequent travel and relocation make features like fully refundable out-of-network ATM fees and remote check deposit valuable. An account that has no foreign transaction fees helps a service member deployed abroad. Military banks often have branches and ATMs located at or near military bases. They also offer specialized products, such as Veteran's Administration mortgages, that are only available to those who meet service requirements. Some military banking benefits are available not only to current military members but also to former members, their spouses, surviving spouses, and children of the service person.

Military banks and regular banks offering military banking services should understand the provisions of the Servicemembers Civil Relief Act of 2003, which provides benefits such as a 6% cap on interest rates for debts incurred before entering the military, delayed legal proceedings for mortgage foreclosure while a soldier is deployed, the right to terminate an auto lease early upon deployment, and more.

Special Considerations

Many benefits that military banks offer to military service members are also available to civilian consumers through regular banks. Members of the military should explore all the banking options available to them and not automatically assume that a military bank will best serve their needs or that it has the lowest fees and best interest rates.

The Association of Military Banks of America, founded in 1959, is a nonprofit trade association of institutions specializing in banking services for military personnel and their families around the world. Its website offers a directory of military banks. The Defense Credit Union Council is a trade association representing credit unions operating on military installations.