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Servicemembers deploying to the Balkans, Iraq, Afghanistan and Kuwait can take advantage of the Savings Deposit Program available through the Defense Finance and Accounting Service.
The Savings Deposit Program allows deployed Servicemembers to invest in a government savings account that earns an annual interest rate of 10 percent, compounded quarterly.
Servicemembers can make deposits in five-dollar increments. However, deposits cannot exceed the total of net pay and allowances or $10,000 during a single deployment.
Servicemembers may begin making deposits after 30 days in the designated area and must stop upon departure from theater. Finance officials recommend participants withdraw their deposits 90 days after their deployment ends, when interest terminates.
Although federal income earned in hazardous duty zones is tax-free, interest accrued on earnings deposited into the SDP is taxable.
Deposits may be discontinued at any time. How-ever, withdrawals may only be made during deployment if the $10,000 ceiling is exceeded, under emergency circumstances, or upon termination of eligibility for the program.
For more information regarding the Savings Deposit Program, contact the local finance office or visit the Web site www.do d.mil/dfas/money/milpay/savingsdeposit.htm.
(Story courtesy of Air Force Personnel Center)
