Military Banking Options: USAA vs Navy Federal Credit Union
When it comes to banking, military members and their families have unique needs. Two institutions that cater specifically to this demographic are USAA and Navy Federal Credit Union (NFCU). But which one is right for you?
Membership and Eligibility
USAA, a federal bank, serves military members, veterans, and their families. To bank with USAA, you must become a member, which is limited to U.S. military members and veterans, pre-commissioned officers, and their spouses and children. Navy Federal Credit Union, on the other hand, serves 14 million members belonging to the Department of Defense, Army, Marine Corps, Space Force, and Coast Guard, as well as veterans and their families.
Checking Accounts
Both USAA and Navy Federal Credit Union offer multiple checking account options. Their most basic accounts earn 0.01% APY, with Navy Fed’s account being free to open and having no minimum balance requirements to earn interest or avoid fees. USAA requires a minimum opening deposit of $25 and a $1,000 minimum balance to earn interest. Neither account imposes a monthly maintenance fee, but both charge a $29 fee for overdrafts. USAA boasts a larger ATM network, with 100,000 ATMs compared to Navy Fed’s 30,000.
Savings Accounts
Navy Federal Credit Union’s basic savings account offers a higher yield and a lower minimum opening deposit/minimum balance requirement than USAA’s basic offering. USAA, however, offers a high-yield savings account that earns up to 1.10% APY, but requires a $1,000 deposit to open and only balances of $500,000 and up earn the highest rate.
CD Accounts
Both institutions offer a variety of CD accounts across several terms. Navy Federal Credit Union offers as much as 4.15% APY on its standard share certificates, with minimum opening deposits ranging from $5 to $1,000. USAA offers a maximum rate of 2.25% APY on its standard CDs, with a minimum opening deposit of $1,000.
Money Market Accounts
Navy Federal Credit Union’s money market account offers rates between 0.25% and 2.25% APY, depending on your balance. There is no minimum opening deposit requirement, but you must deposit at least $2,500 to earn interest. USAA does not currently offer a money market account.
Comparison and Conclusion
Overall, Navy Federal Credit Union offers higher maximum APYs for its accounts, but this is dependent on how much money you keep in your account. For savers with smaller balances, it’s worth considering both financial institutions. Neither institution charges monthly service fees for its accounts, and they also charge the same fee for overdrafts and have comparable early withdrawal penalties for CDs. USAA offers a larger ATM network, while Navy Federal Credit Union stands out for its wide range of account options, around-the-clock customer support, and competitive APYs.
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