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Save Money While Deployed

Photo By Sgt. Jason Mikeworth | Spc. Christopher Mosier, a finance specialist from C Detachment, 39th Finance Company,...... read more read more

02.02.2006

Courtesy Story

207th Public Affairs Detachment

Soldiers of C Detachment, 39th Finance Company, 8th Finance Battalion want to help servicemembers at Logistical Support Area Anaconda make more money while deployed to Iraq.

The Savings Deposit Program (SDP) allows servicemembers deployed in support of Operation Iraqi Freedom and Operation Enduring Freedom up to 10 percent interest per year on money they contribute to a special account.

"A savings program keeps you from spending your money while you're down-range," said Capt. Carmen Iglesias, the detachment commander. "Civilian accounts just don't compare. They pay much less interest."

Spc. Christopher Mosier, a finance specialist with C Detachment, said the program pays compounded interest quarterly until an account reaches $10,000. When that level is achieved, the program begins paying simple interest.

"The best time to deposit money is between the 1st and 10th of the month," Mosier said. "Interest is calculated on the 11th."

Mosier said compound interest includes previous interest payments when it's time to calculate the next payment. Simple interest only uses one base figure to calculate the earnings.

"For example, if you have $1,000 in the account when the first 2.5 percent interest is calculated, you'll end up with $1,025." Mosier said. "If you don't add any deposits before the next interest cycle, the compound interest will be figured from $1,025. If it were simple interest, it would only be calculated from $1,000 again."

Although the account changes to pay only simple interest once it reaches a balance of $10,000, servicemembers are not required to take any money out of the account until after they return to the States.

"You should keep the money in as long as possible," Mosier said. "But the interest stops 90 days after you redeploy."

Mosier also noted that interest earned through the SDP isn't tax free, and participants will need to list that money on their tax returns.

He also said there is a limit to how much servicemembers are allowed to contribute each month.

"You can contribute up to your net pay each month," Mosier said. "But this includes any bonuses you receive."

Sgt. Denise Bennett, from the 394th Postal Company, said she was pleased with what the SDP has to offer.

"It's a really good way to set financial goals," Bennett said. "Make use of the time here, and your money, wisely."

As a single parent, Bennett said every bit helps.

"I have to take care of my child, so I want to be debt free when I leave here," Bennett said. "These kinds of programs help me make the most out of my money while I'm here."

Bennett said she also feels the SDP is a great perk for Soldiers serving in combat zones.

"I think that, as a Soldier, these kinds of programs are an incentive to be a Soldier," Bennett said. "That they give us these kinds of programs while we're here is a boost to our morale."

Iglesias said it's important to note the differences between the SDP and the Thrift Savings Plan (TSP).

"The number one difference is that the SDP is a savings program and the TSP is a retirement program," Iglesias said. "With a savings program, you can take your money out at the end of your deployment. For the TSP, you have to be 59 and a half years old before you can take out your money."

Iglesias also said recordkeeping is the responsibility of the participant and that finance offices don't have access to SDP account histories.

"If you're thinking about the customer, they'll really want some kind of hard copy receipt," Iglesias said. "So cash or check would be the best way to do it."

Iglesias said deposits can be accepted through cash, check, money order or allotment, but that third party checks are not allowed.

"An allotment might be the easiest for the Soldier because they don't have to think about how much to contribute each month," Iglesias said. "But if you can't do an allotment because you're a Reservist or National Guard, you can deposit cash or a check and keep your receipts."