Is a USAA Savings Account Good?
USAA is well known for its strong commitment to military members, veterans, and their families. But when it comes to savings accounts, does it stack up against the competition? While USAA offers convenience, security, and military-specific benefits, its interest rates are shockingly low compared to online banks.
Key Takeaways: Quick Answers to Your Questions ✅
💰 Is the USAA Savings Account free? Yes, there are no monthly fees and no minimum balance requirements after opening.
📉 Does USAA offer high interest rates? No—the standard savings account only earns 0.01% APY, which is one of the lowest in the industry. Even the highest tier (1.10% for $500,000+) lags behind top online banks offering 4.20%–4.50% APY.
🎖 Who is eligible? Only military members, veterans, and their eligible family members (spouses, children).
🏦 Is it good for everyday savings? Yes, if you prioritize security, military-friendly services, and no fees over earning interest.
📈 Is it good for serious long-term savings? No—if you want your savings to grow, online banks like Ally, Discover, and Marcus offer far superior rates.
🔄 Can you withdraw from a USAA savings account easily? Yes, but federal limits allow only six withdrawals per month before a $5 penalty per excess transaction applies.
🔍 Best alternative for higher savings? If interest earnings matter, a high-yield savings account (HYSA) from Ally, Discover, or Sallie Mae will outperform USAA significantly.
How Do USAA Savings Accounts Work? 💳
🔹 USAA offers three types of savings accounts:
1️⃣ USAA Savings Account – Basic, low-interest, but fee-free.
2️⃣ USAA Performance First Savings – Higher interest for larger balances but still weak compared to online banks.
3️⃣ USAA Youth Savings – A fee-free account for kids under 18 with parental controls.
📊 Breakdown of USAA Savings Account Features
| 🏦 Account Type | 💰 Minimum Deposit | 📉 APY (Interest Rate) | 🛠️ Features |
|---|---|---|---|
| USAA Savings | $25 | 0.01% (all balances) | No fees, optional ATM card, FDIC insured |
| USAA Performance First | $10,000 | 0.05%–1.10% (based on balance) | Tiered interest rates, no fees, higher APY for large deposits |
| USAA Youth Savings | $25 | 0.01% | Converts to regular savings at 18, parental controls available |
📌 💡 Pro Tip: If you want an easy, fee-free savings account for emergencies, the basic USAA Savings Account works well—but don’t expect meaningful interest growth.
Is USAA’s Interest Rate Competitive? (Spoiler: No!) 📉
🔹 USAA’s savings rates are among the lowest in the market, making it a poor choice for maximizing your money’s growth.
🔹 How does USAA compare to top online banks?
📊 Comparison of USAA vs. Online Banks
| 🏦 Bank | 💰 Minimum Deposit | 📈 APY (Interest Rate) | 🛠️ Key Feature |
|---|---|---|---|
| USAA Savings | $25 | 0.01% | No fees, military-focused perks |
| USAA Performance First ($10K) | $10,000 | 0.05% | Higher APY for large balances |
| Ally Bank | $0 | 4.20% | No fees, daily compounding interest |
| Discover Savings | $0 | 4.25% | No fees, easy withdrawals |
| Marcus by Goldman Sachs | $0 | 4.40% | High-yield savings, trusted brand |
📌 💡 Reality Check: A $10,000 deposit at USAA earns just $1–$5 per year. That same $10,000 at Ally (4.20%) earns $420 annually—420x more!
Who Should Open a USAA Savings Account? ✅
✔️ Military Members Who Prioritize Banking Convenience – If you already use USAA for checking, loans, and insurance, keeping everything in one place might outweigh the low interest rates.
✔️ Savers Who Just Need a Safe Place for Cash – If earning interest isn’t a concern and you just want an easy, fee-free way to store money, USAA is a safe choice.
✔️ Parents Teaching Kids About Saving – The Youth Savings Account is a great tool for financial literacy with no risk of fees.
📌 💡 Best Use Case: A small emergency fund ($500–$1,000) where interest earnings aren’t a priority.
Who Should Avoid a USAA Savings Account? ❌
❌ Anyone Who Wants Their Money to Grow – If your priority is building savings over time, USAA is a bad choice compared to high-yield online accounts.
❌ Non-Military Individuals – If you don’t qualify for USAA membership, you can’t open an account at all.
❌ Large Balance Holders – Even USAA’s Performance First account maxes out at 1.10% for $500,000+, while online banks offer 4x higher rates for any balance size.
📌 💡 Better Alternative: If you have over $5,000 to save, an Ally, Discover, or Marcus account will earn you hundreds (or even thousands) more per year in interest.
Is USAA’s Savings Account Good for an Emergency Fund? 🚨
🔹 Yes, but only if you don’t care about interest earnings.
✔️ Pros for Emergencies:
✅ No fees – Your savings won’t be eroded by monthly charges.
✅ Easy access via ATM card – Unlike many savings accounts, USAA offers an optional ATM card.
✅ Military-friendly access – Relocating? USAA makes transferring funds and managing money seamless.
❌ Cons for Emergencies:
🚫 Interest is almost nonexistent – Your money won’t grow.
🚫 Limited withdrawals – Only six withdrawals per month allowed before a $5 penalty per excess transaction.
📌 💡 Best Strategy: If you want a fee-free account for emergencies, USAA works—but consider keeping a larger fund in a high-yield account elsewhere.
Final Verdict: Should You Open a USAA Savings Account? 🤔
✅ Yes, if:
✔️ You value USAA’s banking ecosystem and prefer everything in one place.
✔️ You need a safe, fee-free place for emergency funds.
✔️ You are military-affiliated and want an easy way to save.
❌ No, if:
🚫 You want high-interest earnings (USAA’s 0.01% APY is extremely low).
🚫 You have over $5,000 in savings (high-yield banks will pay you 4x more).
🚫 You aren’t eligible for USAA membership.
📌 💡 Expert Tip: If you already bank with USAA, the basic savings account is fine for small balances. But for serious savings growth, open a high-yield savings account elsewhere—you’ll earn hundreds more per year with no extra effort. 🚀
Comment Section (FAQs)
Q: Is USAA’s Savings Account a Good Place to Keep an Emergency Fund?
🔹 Yes, but only if interest growth isn’t your priority. A savings account should offer three key benefits for an emergency fund: liquidity, security, and stability. While USAA provides all three, it lacks competitive interest rates, which means your money won’t grow over time.
🔹 Key Benefits for Emergency Funds:
✔️ No fees – Your savings remain intact without monthly maintenance costs.
✔️ Military-friendly access – Seamless withdrawals via 100,000+ fee-free ATMs and easy online transfers.
✔️ FDIC insured up to $250,000 – Your funds are secure against bank failure.
🔹 Major Drawbacks:
❌ Extremely low APY (0.01%) – Your money won’t keep pace with inflation.
❌ Withdrawal restrictions – Exceeding six transactions per month triggers a $5 penalty per excess withdrawal.
❌ Better alternatives exist – Online banks offer 4.20%+ APY, allowing savings to grow while remaining accessible.
📊 USAA Savings for Emergency Funds: Pros & Cons
| 🔍 Factor | ✅ USAA Pros | ❌ USAA Cons |
|---|---|---|
| Safety 🏦 | FDIC insured, strong reputation | No fraud protection beyond standard banking laws |
| Access 💳 | ATM withdrawals available | Only six free withdrawals per month |
| Growth 📈 | Better than cash at home | 0.01% APY = Almost no interest earnings |
| Military Perks 🎖 | Fee-free transfers between USAA accounts | No special benefits beyond general USAA perks |
📌 💡 Best Strategy: Use USAA for immediate cash reserves ($500–$1,000), but place larger savings in a high-yield account to earn substantial interest while keeping funds accessible.
Q: Does USAA Offer the Best Savings Rates for Military Members?
🔹 No. USAA is competitive in military-friendly services but falls behind in savings rates. Several financial institutions offer far better APYs while still catering to military personnel.
🔹 Comparing USAA to Military-Focused Banks:
📊 Best Savings Accounts for Military Members
| 🏦 Bank | 💰 APY (Interest Rate) | 🎖 Military Benefits |
|---|---|---|
| USAA Savings | 0.01% | No fees, military banking perks |
| Navy Federal Credit Union (NFCU) | 0.25% – 4.25% | Better rates, military deployment options |
| Pentagon Federal Credit Union (PenFed) | 2.70% – 3.50% | No military requirement, high APYs |
| Service Credit Union | Up to 5.00% | Deployment savings options, interest on checking accounts |
📌 💡 Expert Tip: If earning interest is important, Navy Federal or Service Credit Union offer far better savings rates while still providing military-focused perks.
Q: How Does the USAA Performance First Savings Account Compare to a CD?
🔹 The Performance First account is designed for high-balance savers, but its APY is weaker than most Certificates of Deposit (CDs).
🔹 Key Differences:
✔️ Performance First Savings: Offers tiered APYs ranging from 0.01% to 1.10%, requiring a $10,000 minimum deposit.
✔️ Certificates of Deposit (CDs): Lock funds for a fixed period but offer higher guaranteed rates (currently 4.00%–5.25% APY at some banks).
📊 USAA Performance First Savings vs. CDs
| 🏦 Option | ⏳ Required Balance | 📈 APY Potential | 💰 Liquidity |
|---|---|---|---|
| USAA Performance First | $10,000+ | Max 1.10% APY | High—Funds available anytime |
| USAA CD (1 Year) | $1,000+ | 4.25% APY | Low—Early withdrawal penalty applies |
| Marcus by Goldman Sachs CD | $500+ | 5.10% APY | Low—Fixed term required |
| Ally Bank CD (No-Penalty) | $0 | 4.55% APY | Medium—Withdraw after 6 days with no penalty |
📌 💡 Best Choice: If you don’t need immediate access to funds, a high-yield CD will outperform the USAA Performance First account significantly.
Q: What Happens If I Exceed the Withdrawal Limit on My USAA Savings Account?
🔹 USAA enforces the federal withdrawal limit (Regulation D), allowing only six savings withdrawals per month. Exceeding this results in:
✔️ First occurrence: Warning notice.
✔️ Subsequent occurrences: $5 penalty per excess withdrawal.
✔️ Frequent violations: Account may be converted to checking or closed by USAA.
📊 USAA Savings Withdrawal Limits & Fees
| 🚨 Withdrawal Type | ⚠️ Limit | 💸 Fee if Exceeded |
|---|---|---|
| Electronic transfers (ACH, online banking) | 6 per month | $5 per extra withdrawal |
| ATM withdrawals | Unlimited | No fee |
| Internal transfers (to USAA checking) | 6 per month | $5 per extra transfer |
📌 💡 Workaround: If you regularly need to move money in and out of savings, consider:
✔️ Linking savings to a checking account for fee-free transfers.
✔️ Using a high-yield checking account instead (some pay 3.00%+ APY).
Q: Does USAA Offer High-Yield Checking Accounts Instead?
🔹 No, USAA’s checking account interest rates are also very low (0.01% APY).
🔹 Better Checking Options for Higher Earnings:
📊 Best High-Yield Checking Accounts
| 🏦 Bank | 💰 APY (Interest Rate) | 📌 Key Feature |
|---|---|---|
| USAA Checking | 0.01% | Free overdraft protection, ATM rebates |
| Alliant Credit Union Checking | 0.25% | No overdraft fees, nationwide access |
| Consumers Credit Union | Up to 5.00% | High interest on balances under $10,000 |
| Lake Michigan Credit Union | Up to 3.00% | Cashback + interest on checking |
📌 💡 Best Alternative: If you need checking with high interest, consider Consumers Credit Union or Alliant Credit Union.
Q: What Is the Best USAA Alternative for Someone Who Isn’t Military?
🔹 If you don’t qualify for USAA, consider these alternatives:
📊 Best Banks Similar to USAA (Without Military Restrictions)
| 🏦 Bank | 🌎 Who Can Join? | 📈 Best Feature |
|---|---|---|
| Ally Bank | Anyone | 4.20% APY Savings |
| Discover Bank | Anyone | No fees, high savings rates |
| Chime | Anyone | Round-up savings, free overdraft |
| SoFi | Anyone | 4.60% APY + checking benefits |
📌 💡 Best Choice: SoFi offers high-yield savings + checking in one account, making it a great alternative to USAA for non-military individuals.
Q: Why Are USAA’s Interest Rates So Low Compared to Online Banks?
🔹 USAA prioritizes financial security, customer service, and military-specific benefits over high-yield savings growth. Unlike online banks, which have minimal operating costs, USAA has a brick-and-mortar banking structure, insurance services, and military-focused customer assistance that require higher overhead.
🔹 Factors Behind USAA’s Low Interest Rates:
✔️ Legacy Banking Model – USAA operates with traditional financial structures, unlike fintech-driven banks that maximize savings rates.
✔️ Risk Management – USAA maintains conservative financial policies to ensure stability for military families rather than pushing aggressive interest rates.
✔️ Member Perks Instead of High APYs – Benefits like early direct deposit, loan discounts, and robust customer service are prioritized over offering competitive savings rates.
📊 USAA Savings Rates vs. Online Banks: The Core Differences
| 🔍 Factor | 🏦 USAA | 🌐 Online Banks (Ally, Discover, Marcus) |
|---|---|---|
| Interest Rates (APY) | 0.01%–1.10% | 4.20%–5.00% |
| Bank Type | Traditional/Military-Focused | Digital-Only |
| Customer Service | Phone & branch support | Mostly online/chat |
| Other Benefits | Insurance, auto loans, investment services | Higher APYs, tech-driven banking tools |
📌 💡 Best Approach: If you prioritize security and military-specific perks, USAA is reliable. However, if interest earnings matter, an online bank is the clear choice.
Q: Does USAA Offer Money Market Accounts as an Alternative to Savings?
🔹 No, USAA does not currently offer a money market account (MMA). This means customers cannot take advantage of tiered interest rates combined with check-writing privileges, a feature commonly available at banks with high-yield options.
🔹 Money Market vs. USAA Savings:
📊 Money Market Account vs. USAA Savings: Which is Better?
| 🏦 Account Type | 💰 Minimum Deposit | 📈 APY | 📄 Check-Writing Ability |
|---|---|---|---|
| USAA Savings | $25 | 0.01%–1.10% | ❌ No |
| Money Market (Ally) | $0 | 4.25% APY | ✅ Yes |
| Money Market (Navy Federal) | $2,500 | 0.50%–2.00% | ✅ Yes |
📌 💡 Best Alternative: If you’re looking for liquidity and better returns, a money market account at Navy Federal or Ally Bank is a stronger choice.
Q: What Are the Hidden Fees in USAA’s Savings Accounts?
🔹 USAA savings accounts have no monthly maintenance fees, but there are other fees that can catch customers off guard. While generally transparent, USAA applies specific charges for excessive withdrawals, wire transfers, and overdrafts.
📊 USAA Savings Account Fees & When They Apply
| ⚠️ Fee Type | 💰 Amount | 🚨 When It Happens |
|---|---|---|
| Excessive Withdrawal Fee | $5 per transaction | After six withdrawals per month |
| Outgoing Domestic Wire Transfer | $20 per transfer | Sending money via wire to another U.S. bank |
| Overdraft Transfer Fee | $0 | Free if linked to USAA checking |
| International ATM Withdrawal | 1% of transaction | Using ATMs outside the U.S. |
📌 💡 Money-Saving Tip: Avoid excess withdrawals by linking your savings account to checking for seamless transfers and use fee-free USAA network ATMs when traveling internationally.
Q: Does USAA Allow Joint Savings Accounts?
🔹 Yes, USAA allows joint savings accounts, but only for eligible members. This means both account holders must be part of the military community—a restriction that differs from most banks that allow anyone to open a joint account.
📊 USAA Joint Savings Account Rules
| 👥 Who Can Open? | ✅ Allowed? | 📝 Requirements |
|---|---|---|
| Spouse & USAA Member | ✅ Yes | Must be married or legally recognized |
| Parent & Adult Child | ✅ Yes | Both must have USAA membership |
| Unmarried Partner | ❌ No | Not eligible without military affiliation |
| Friend or Business Partner | ❌ No | USAA does not offer business savings |
📌 💡 Alternative Option: If you need a joint account but don’t qualify, consider opening a high-yield savings account elsewhere and keeping USAA for personal banking.
Q: Can I Use a USAA Savings Account for Direct Deposit?
🔹 Yes, but it’s not recommended. While you can directly deposit paychecks, military benefits, or tax refunds into a USAA savings account, using a USAA checking account is far more practical.
🔹 Why?
✔️ Checking accounts offer faster access to direct deposits.
✔️ Military pay arrives early (1 day in advance) when deposited into checking.
✔️ Savings account transfers are limited, making it less convenient for everyday spending.
📊 Best USAA Account for Direct Deposits
| 💰 Deposit Type | 🚀 Best USAA Account | 💡 Why? |
|---|---|---|
| Military Pay | USAA Checking | Arrives 1 day early |
| Tax Refunds | USAA Checking | Immediate access |
| Side Income (Freelance, Pensions) | USAA Savings | Good for automatic savings |
📌 💡 Best Practice: Deposit paychecks into checking and set up an automatic transfer to savings for a structured financial strategy.
Q: How Does USAA Compare to Credit Unions for Savings?
🔹 USAA functions more like a traditional bank, whereas credit unions often provide higher interest rates and lower fees.
📊 USAA vs. Credit Unions: Savings Account Differences
| 🏦 Institution | 💰 Minimum Deposit | 📈 APY (Interest Rate) | 🎖 Military Benefits |
|---|---|---|---|
| USAA Savings | $25 | 0.01%–1.10% | Yes |
| Navy Federal Credit Union | $5 | Up to 4.25% | Yes |
| PenFed Credit Union | $5 | Up to 3.50% | No military requirement |
📌 💡 Best Choice: If you’re military-affiliated and want higher APYs, Navy Federal is the better option.
Q: Should I Keep All My Savings with USAA?
🔹 No, diversifying your savings across different banks can maximize your interest earnings while maintaining access to USAA’s benefits.
📊 Best Multi-Bank Savings Strategy
| 💼 Savings Type | 🏦 Recommended Bank | 💡 Why? |
|---|---|---|
| Everyday Savings | USAA | No fees, easy transfers |
| Emergency Fund | Ally Bank (4.20%) | Higher APY for growth |
| Long-Term Growth | Marcus by Goldman Sachs (4.40%) | Industry-leading APYs |
📌 💡 Smartest Move: Use USAA for banking convenience, but keep high-yield savings accounts elsewhere to grow your money efficiently.
Q: Why Are USAA’s Savings Interest Rates So Low When Other Banks Offer 4%+?
🔹 USAA operates under a traditional banking model, prioritizing security and customer service over high-yield returns. Unlike online-only banks that maximize interest rates by reducing overhead costs, USAA maintains physical offices, a strong customer support system, and specialized services tailored to military families.
🔹 Primary Reasons for USAA’s Low APY:
✔️ Conservative Risk Management – USAA focuses on financial stability rather than offering aggressive interest rates that fluctuate with economic trends.
✔️ Military-Focused Benefits Instead of Higher APY – Instead of high interest, USAA offers perks like early direct deposit, fee-free overdraft protection, and military-friendly insurance products.
✔️ Higher Operating Costs – Unlike digital banks that operate entirely online, USAA manages brick-and-mortar locations and a full-service customer support team.
📊 USAA vs. High-Yield Banks: Why the APY Gap?
| 🔍 Factor | 🏦 USAA Savings | 🌐 Online Banks (Ally, Discover, Marcus) |
|---|---|---|
| APY (Interest Rate) | 0.01% – 1.10% | 4.20% – 5.00% |
| Bank Model | Traditional | Digital-Only |
| Customer Support | Phone, Branches, Online | Online, Chat-Based |
| Military Benefits | ✔️ Yes | ❌ No |
| Other Perks | Insurance, Loans, Investment Services | High Interest, Tech-Focused Features |
📌 💡 Smart Strategy: If you need military-specific banking and fee-free services, USAA is solid. However, for long-term savings growth, an online bank with a high-yield APY is the superior option.
Q: Is USAA’s Performance First Savings Worth It for Larger Balances?
🔹 Only if you plan to maintain a very high balance but don’t prioritize interest growth. The Performance First Savings Account offers tiered APYs, but even at the highest levels, it remains uncompetitive compared to high-yield savings accounts (HYSAs).
📊 Performance First Savings vs. High-Yield Alternatives
| 🏦 Balance | 💰 USAA Performance First APY | 📈 Best High-Yield Alternative | 🔥 Online Bank APY |
|---|---|---|---|
| $1,000 – $9,999 | 0.05% | Ally Bank | 4.20% |
| $10,000 – $49,999 | 0.05% | Discover Savings | 4.25% |
| $50,000 – $99,999 | 0.10% | Marcus by Goldman Sachs | 4.40% |
| $250,000+ | 0.70% – 1.10% | Wealthfront | 5.00% |
📌 💡 Reality Check: A $100,000 deposit in USAA earns just $100 annually at 0.10% APY. That same balance in an Ally Bank savings account earns $4,200 at 4.20% APY—a huge difference in passive income.
Q: How Many Times Can I Withdraw from My USAA Savings Before Facing Fees?
🔹 USAA enforces the federal six-withdrawal limit per month for savings accounts. Exceeding this limit triggers a $5 fee per excess transaction after the first warning.
🔹 Withdrawal Limits & Fees Explained:
✔️ First Six Withdrawals – Free, as per federal regulation.
✔️ 7th and Beyond – $5 per excess transaction
✔️ Frequent Overuse – USAA may convert your savings to a checking account or even close it if excessive withdrawals continue.
📊 USAA Savings Withdrawal Limits
| 🚀 Transaction Type | ⚠️ Limit | 💸 Fees If Exceeded |
|---|---|---|
| Online Transfers (ACH, app, website) | 6 per month | $5 per extra transaction |
| ATM Withdrawals | No limit | No fee |
| Internal Transfers (Savings to Checking) | 6 per month | $5 per excess transfer |
📌 💡 Workaround: If you frequently need to move money, use a USAA checking account instead, which has no transfer limits.
Q: Does USAA Have a Money Market Account for Better APY?
🔹 No, USAA does not currently offer a money market account (MMA). This limits flexibility for savers looking for tiered interest rates and check-writing privileges on their savings.
📊 Money Market Alternatives for USAA Customers
| 🏦 Bank | 💰 Minimum Deposit | 📈 APY | 💳 Check-Writing? |
|---|---|---|---|
| USAA Savings | $25 | 0.01% – 1.10% | ❌ No |
| Ally Bank MMA | $0 | 4.25% | ✅ Yes |
| Navy Federal MMA | $2,500 | Up to 2.00% | ✅ Yes |
📌 💡 Best Alternative: If you need a high-yield alternative to USAA savings, a money market account at Navy Federal or Ally is a better choice.
Q: Can I Open a USAA Savings Account for a Minor?
🔹 Yes, USAA offers a Youth Savings Account for kids under 18. It transitions into a standard savings account when the child turns 18, allowing them to continue using their funds seamlessly.
📊 USAA Youth Savings vs. Competitor Accounts
| 🧒 Account Type | 🏦 Minimum Deposit | 💰 APY | 🏆 Best Feature |
|---|---|---|---|
| USAA Youth Savings | $25 | 0.01% | Parental controls, automatic transfer options |
| Alliant Kids Savings | $5 | 3.10% | High APY, educational tools |
| Capital One Kids Savings | $0 | 0.30% | No minimum balance, mobile-friendly |
📌 💡 Smartest Move: Use USAA for military-family convenience, but Alliant Credit Union offers a much higher APY for children’s savings.
Q: Is It Safe to Keep Large Amounts of Money in a USAA Savings Account?
🔹 Yes, USAA is federally insured by the FDIC, protecting deposits up to $250,000 per individual account. However, the low APY means large balances won’t grow effectively.
📊 Large Balances: Where to Keep Your Money
| 🏦 Account Type | 💰 Best for Large Balances? | 🔥 APY | 💡 Why? |
|---|---|---|---|
| USAA Savings | ❌ No | 0.01% – 1.10% | Interest growth is too low |
| High-Yield Savings (Ally, Discover) | ✅ Yes | 4.20% – 5.00% | Strong interest earnings |
| CDs (Marcus by Goldman Sachs) | ✅ Yes | 4.50% – 5.10% | Fixed, guaranteed APY |
📌 💡 Best Strategy: If you have over $50,000, split funds between an online high-yield savings account and a CD for better returns.
