USAA Savings Account Review
The United Services Automobile Association or USAA got its start as an insurance company but it’s since branched out into other financial services, including banking. Headquartered in San Antonio, USAA has physical branches but it's also an online bank.
On the banking side, USAA offers a number of products to help military families manage their money. One of them is a high-yield savings account.
The USAA Savings Account is just one of many savings account options to choose from. Keep reading to learn more about the account’s finer points, who’s eligible to open one, and how it compares to other online savings accounts.
USAA Savings Account Pros & Cons
Get Tiered Rates When You Save
The USAA Savings Account has a tiered annual percentage yield structure. That means the more you save, the higher the APY you can earn on deposits.
The more you save, the more interest you can earn on your deposits. If you’re a super saver, you might prefer the USAA Performance First savings account instead. This account also has tiered rates but they’re slightly higher than the regular savings account.
Overall, online banks will help you accelerate your savings. Online banks don’t have the same operational costs as traditional banks. The upside for savers is that fewer costs mean fewer fees and higher yields on savings. Keep reading to learn more about some of USAA’s online competitors a little later on.
The USAA Savings Account is Fee-Friendly
Fees can be a saver’s worst enemy. Earning a high APY on your savings won’t benefit you much if you’re paying the bank all that interest back and then some in fees each month.
USAA curbs the fees. There’s no minimum balance and no monthly maintenance fee. You won’t get hit with a fee for closing your account and USAA doesn’t charge fees for other services, like direct deposit or mobile banking access.
There is a fee for excess withdrawals from your savings. Federal Regulation D limits you to six withdrawals or transfers from a savings account each month.
The first time you go over that limit, you get a free pass. The second and third times you exceed the limit in a 12-month period, you’re charged a $5 excess withdrawal fee per transaction over the limit. After that, your savings account may convert into a checking account, or be closed down altogether.
It’s free to make withdrawals from your savings at one of the 60,000+ USAA ATMs. There’s no fee for the first 10 withdrawals made at non-USAA ATMs. After that, USAA tacks on a $2 fee per withdrawal. You can get a refund for up to $15 in non-USAA ATM surcharges each month. If you use your ATM card to make a withdrawal outside the U.S., a separate 1% foreign transaction fee applies.
USAA Savings Account Fees
|Monthly Maintenance Fee||$0|
|Minimum Balance Fee||$0|
|Returned withdrawal fee||$29|
|Returned deposit fee||$5|
|Outgoing domestic wire transfer fee||$20|
|Outgoing international wire transfer fee||25|
|Statement copy fee||$10|
Who Can Open a USAA Savings Account?
USAA membership isn’t open to everyone. To qualify for a USAA Savings Account, you have to meet certain criteria.
Generally, you must be:
- An active member of the Armed Forces
- An individual who has retired or separated from the military via an honorable discharge
- A widow, widower or un-remarried former spouse of a USAA member who joined USAA before or during the marriage
- A cadet or midshipman at a U.S. service academy
- An adult child of a USAA member who has or has had a USAA auto or home insurance policy
You’ll have to provide USAA with documentation to verify your eligibility. Therefore, it can be difficult for many people to apply for an account.
Why Other Online Savings Accounts Are Better
The USAA Savings Account isn’t going to be right for everyone and in fact, there are some good reasons why you might fare better with an online savings account from a different bank.
For starters, the membership requirements might be tough for the average person to meet. If you’ve never served in the military or you’re not married or related to a USAA member, banking here is going to be a no-go right out of the gate. You do get some extra benefits for being a USAA member, such as discounted loan rates, but again, not everyone’s going to qualify.
The account's APY is another reason to think about taking your savings elsewhere. At the current rates USAA that is offering, it would take a long time to see any added value to your savings, from the interest at least. Online banks can help you pump your savings faster in less time because of their higher rates.
Tip: Use the APY calculator to see how fast your money can grow with a higher rate.
Consider These Online Savings Alternatives
If you don't meet the requirements to become a USAA member, or you simply want to get a better rate on your savings, you’re in luck. These three online bank savings alternatives offer a great combination of higher APYs on savings and minimal fees:
Ally Online Savings Account
Ally’s Online Savings Account is one of the most popular options for people who prefer online banks to brick-and-mortar ones. Ally offers one of the market-leading interest rates. There are no tiers, so you always get the same great rate no matter how much or how little you save. There’s no minimum balance to get started saving, so you can open an account now for free.
Synchrony Bank High Yield Savings
Synchrony Bank offers a high-yield savings account with an interest rate that is among the best. In addition to no monthly fees or minimum balances, you have the option of getting an ATM card for those rare instances when you need cash immediately.
Goldman Sachs Bank USA Online Savings
Goldman Sachs Bank USA really shines with an online savings account that carries the top savings rate available nationwide. It doesn't charge any monthly fees or any transaction fees. Just focus on saving and earning interest.
Should You Open a USAA Savings Account?
If you're already a USAA member, or you're thinking of becoming one, a USAA Savings Account might be a logical choice for your savings from a convenience perspective. You can link your savings to your checking account for overdraft protection and USAA membership offers some valuable benefits that other banks don't provide.The tradeoff, however, is that you're exchanging convenience for a much lower yield on your savings. In the long run, that convenience could actually cost you money if you’re missing out on a better interest rate elsewhere.
The tradeoff, however, is that you're exchanging convenience for a much lower yield on your savings. In the long run, that convenience could actually cost you money if you’re missing out on a better interest rate elsewhere.
We'd suggest looking at other savings accounts if you want to get the highest APY possible on your savings, or you don't qualify to join USAA. Online banks are designed to meet the same needs as traditional banks and the ones profiled earlier offer better yields on savings to boot. Plus, you don’t have to jump through as many hoops to open an account with one of the alternatives suggested. The more interest you can earn on your savings, the better when it comes to reaching your short- and long-term financial goals.