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 servicepeople because they offer various types of specialized accounts, perks and benefits, and services and options accommodating military lifestyles. Though some banks target a broader audience, military banks primarily focus on and cater to military personnel.
- Military banks and credit unions 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
People 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 servicemember deployed abroad.
Founded in 1922, USAA is one of the oldest U.S. military banks. Navy Federal Credit Union is the largest credit union in the world. Mainstream banks like U.S. Bank, Bank of America, Wells Fargo, Chase, and many others also have services specifically geared toward military members.
Some military banks require customers to have a military affiliation, either directly (active members or veterans) or indirectly (a spouse or dependent) to use their services. USAA is one example.
Benefits of Using Military Banks
In addition to providing services that are amenable to frequent travel and relocation, military banks often have branches and ATMs located at or near military bases. They also offer specialized products, such as VA home loans, that are only available to those who meet service requirements. Backed by the government, VA home loans are one of the very few 0% down payment loans available in the United States.
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 serviceperson.
Active-duty servicemembers and members of the National Guard or reserve who are called to active duty have certain financial protections under the Servicemembers Civil Relief Act (SCRA). Provisions of the SCRA provide 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.
Best Military Banks
The following are among the best military banks and credit unions that cater to service members:
- Navy Federal Credit Union
- PenFed Credit Union
- Air Force Federal Credit Union
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.
Alternatives to Military Banks
Many benefits that military banks offer to military servicemembers are also available through regular banks. VA loans are one example. Members of the military should explore all 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.