USAA Federal Savings Bank Review 2023 – Full-Service Banking for Military Families
Military families face extra challenges — not the least of which is that they're often on the move. That can make finding the right bank difficult.Commissions & Fees - 7
Customer Service - 8
Ease of Use - 9.5
Locations - 5
Savings Options - 8.5
Rates - 4
6
USAA is a full-service, mostly online bank that offers checking and savings accounts and CDs for current and former military service members and their families. Although no money market accounts are available, there is a large selection of products. However, USAA offers some of the lowest savings interest rates compared to other online banks.
USAA began as an automobile insurer for servicemen. However, during its nearly 100-year history, it has evolved into a financial juggernaut that includes banking and investment services.
But let's focus on banking. USAA Federal Savings Bank offers checking, savings and CD accounts, along with a sizable number of in-network ATMs.
Is USAA Federal Savings Bank a good choice for your money? We took a look, and this is what we found.
USAA Federal Savings Bank Features
| Accounts | Savings, Checking, Money Market, CDs |
| Access | Web Based, iPhone App, Android App, Blackberry App |
| Amount of Branches | 4 |
| ATM Reimbursement | |
| Online Deposits | |
| FDIC Insurance | |
| Customer Service | Investment Customer Service by Phone: M-F 7:30 a.m. - 8 p.m. CT, Sat 8 a.m. - 5 p.m. CT |
What Is USAA Federal Savings Bank?
Once upon a time, military service personnel found it all but impossible to get automobile insurance. The insurance companies just wouldn't cover them because the servicemen were considered too high risk.
In 1922, a group of Army officers in San Antonio, Texas, decided to take matters into their own hands. They started a company that would eventually become the United Services Automobile Association, or USAA.
USAA has a comprehensive list of products and services in the areas of banking, investments, retirement, and insurance. The longer you research its products, the more you realize USAA competes not only with online banks but also with specialty member-only credit unions and seeks to provide the sort of customer experience you'd find at a brick-and-mortar bank.
However, that doesn't mean you're likely to find a branch in any given town. USAA has only a few physical locations in Texas, Colorado, Maryland and New York. But it does have an extensive online presence.
How Does USAA Federal Savings Bank Work?
USAA's target demographic is all members of U.S. military services and their families. According to the USAA website, here's who can currently sign up:
- Current or former military service members from any branch of the military (Army, Air Force, Navy, Marine, Coast Guard and National Guard, including Reserve Officer Training Corps, cadets and midshipmen at U.S. service academies, or officer candidates).
- Family members of the above servicepeople (spouses, children, legal guardians, parents).
- Immediate family members of someone who is already a USAA member.
USAA Mobile App
USAA offers a mobile app that is honestly the most comprehensive app I've ever seen. It's available on both the Google Play store and the iOS App Store.
The app handles most of USAA's business. So you won't find just banking options — here, you'll also be able to manage insurance and investment accounts, etc. Just about anything that can be done on the USAA website can be done via the app:
- Deposit checks
- Manage transactions
- Transfer money
- Pay bills
- Get/manage insurance
- Get a loan
- Manage investments
- Get real-time stock quotes
- Send money with Zelle
- Explore financial tools
- More
USAA Checking Accounts
USAA offers two types of checking accounts. In order to select the right account for you, ask yourself this question: “Do I prefer to use cash or my debit card?”
If you're a dedicated debit card user, Classic Checking is the correct choice for you, but if you find yourself frequenting the ATM, check out Cashback Rewards Checking.
You get the following features with both types of accounts:
- iOS and Android mobile app
- No monthly maintenance fees
- Mobile check deposit and deposit by mail
- The ability to open multiple checking accounts within your USAA account (other banks don't usually let you do this)
- Access to more than 60,000 USAA-preferred ATMs
- Free overdraft protection when you also have a funded savings account
- No minimum balance required to maintain an account
- Free bill pay
- Visa debit card
- Paycheck planner and budgeting tools
Classic Checking
This account is for members who are more likely to use their debit cards at the ATM to get cash instead of making purchases at the register or online.
With Classic Checking, you get 10 free ATM withdrawals every month if you use USAA-preferred ATMs (with more than 60,000 ATMs to choose from), and subsequent withdrawals are $2 each. USAA will reimburse you up to $15 a month for using other banks' ATMs.
You'll also earn a small amount of interest depending on your balance. If you have more than $1,000 in the bank, you'll earn 0.01%. While that's better than nothing, this rate isn't as good as Ally Bank, which pays 0.25% APY on accounts over $15,000 and 0.10% for all others with no minimum.
Cashback Rewards Checking
This account is for members who are more likely to use their debit cards for purchases rather than hitting up the ATM for cash.
This checking account lets you earn $0.10 cash back on each debit card transaction (not dollar amount), and there is no limit to the number of rewards you can earn in a year.
However, the following types of purchases do not count toward a cashback reward:
- Cash advances
- USAA bill pay
- ATM withdrawals
- Tax payments
- Cash equivalents (money orders and cashier’s checks)
- P2P payments (Zelle, PayPal, etc.)
- Gaming and gambling transactions
Cashback Rewards Checking accounts do not reimburse you for ATM withdrawals or offer interest on accounts.
Have Both Types of Accounts
The best part about having a USAA bank account is being able to have multiple checking and savings accounts. Use your Cashback Rewards Checking card to make purchases at the store or online so you can get cash rewards, and if you ever need cash, use the card from a Classic Checking account so you don’t have to pay ATM fees, ever.
USAA Savings Accounts
As with USAA's hassle-free checking, savings accounts have no monthly service fee and no minimum balance requirements.
In addition to those features, you get:
- iOS and Android mobile app
- The ability to open multiple savings accounts to meet your savings goals
- Deposit checks by mobile or by mail
- The ability to set up recurring transfers to save more money
- Optional ATM card
- 10 free ATM withdrawals from USAA-preferred banks or a refund of up to $15 per month of other U.S. banks’ ATM usage fees (however, federal regulation caps withdrawals from a savings account to only six per month)
- Fraud protection
- Online security tools
- Text Savings, a microsavings app that monitors your checking and automatically saves money in increments of $1 to $9 without affecting your spending or causing overdrafts (similar to the Digit app).There are two types of FDIC-insured savings accounts:
- USAA Savings – For members who are just starting to save toward a goal
- USAA Performance First – For members who have $10,000 or more already saved
USAA Federal Savings Bank Savings Account
USAA Savings
This savings account is best for people who want to start saving toward a goal. You can open an account with as little as $25.
| Available For | Taxable |
|---|---|
| Account Fees | None |
| Savings Rates |
|
USAA Performance First
This account is for people who have already saved a significant amount of money. The minimum amount to open is $10,000, but there's no minimum required to maintain an account.
However, this account's interest rates are low compared to other banks. While USAA's savings rates are less competitive than other online banks, average APYs have dropped significantly across the board as of this writing.
| Available For | Taxable |
|---|---|
| Account Fees | None |
| Savings Rates |
|
USAA CDs
USAA offers the most flexible CD features of most banks that I’ve researched. There are three CD options and a flexible term window that most banks don’t have. And while most CDs lock you into a rate and one-time deposit, USAA offers options where you can add money throughout the term depending on the type of CD you choose.
Here’s a breakdown of current CD terms:
USAA Federal Savings Bank CD Rates
Standard Fixed Rate CDs
With these CDs, you can earn a guaranteed rate of return. However, no additional deposits are allowed until maturation. The minimum required is $1,000.
| Term | Minimum Deposit | APY |
|---|---|---|
| 30 days | $1,000 | N/A |
| 91 days | $1,000 | 0.05% |
| 120 days | $1,000 | N/A |
| 150 days | $1,000 | N/A |
| 182 days | $1,000 | 0.05% |
| 7 months | $1,000 | 0.05% |
| 270 days | $1,000 | 0.05% |
| 1 year | $1,000 | 0.07% |
| 15 months | $1,000 | 0.09% |
| 18 months | $1,000 | 0.09% |
| 2 years | $1,000 | 0.12% |
| 30 months | $1,000 | 0.15% |
| 3 years | $1,000 | 0.19% |
| 4 years | $1,000 | 0.26% |
| 5 years | $1,000 | 0.37% |
| 7 years | $1,000 | 0.43% |
Jumbo Fixed Rate CDs
Currently, USAA's Jumbo CDs pay the same as the standard CDs. However, there are additional terms you can choose.
| Term | Minimum Deposit | APY |
|---|---|---|
| 30 days | $95,000 | 0.05% |
| 91 days | $95,000 | 0.05% |
| 120 days | $95,000 | 0.05% |
| 150 days | $95,000 | 0.05% |
| 182 days | $95,000 | 0.05% |
| 7 months | $95,000 | 0.05% |
| 270 days | $95,000 | 0.05% |
| 1 year | $95,000 | 0.07% |
| 15 months | $95,000 | 0.09% |
| 18 months | $95,000 | 0.09% |
| 2 years | $95,000 | 0.12% |
| 30 months | $95,000 | 0.15% |
| 3 years | $95,000 | 0.19% |
| 4 years | $95,000 | 0.26% |
| 5 years | $95,000 | 0.37% |
| 7 years | $95,000 | 0.43% |
Super Jumbo Fixed Rate CDs
Currently, USAA's Super Jumbo CDs pay the same as the standard CDs. However, there are additional terms you can choose.
| Term | Minimum Deposit | APY |
|---|---|---|
| 30 days | $175,000 | 0.05% |
| 91 days | $175,000 | 0.05% |
| 120 days | $175,000 | 0.05% |
| 150 days | $175,000 | 0.05% |
| 182 days | $175,000 | 0.05% |
| 7 months | $175,000 | 0.05% |
| 270 days | $175,000 | 0.05% |
| 1 year | $175,000 | 0.07% |
| 15 months | $175,000 | 0.09% |
| 18 months | $175,000 | 0.09% |
| 2 years | $175,000 | 0.12% |
| 30 months | $175,000 | 0.15% |
| 3 years | $175,000 | 0.19% |
| 4 years | $175,000 | 0.26% |
| 5 years | $175,000 | 0.37% |
| 7 years | $175,000 | 0.43% |
USAA Federal Savings Bank Pros & Cons
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| Highlights |  |  |  |
|---|---|---|---|
| Rating | 7.5/10 | 8/10 | 6/10 |
| Accounts | Savings, Checking, Money Market, CDs | Savings, Checking, Money Market, CDs | Savings, Checking, Money Market, CDs |
| Online Deposits | |||
| Physical Branches | |||
| FDIC Insurance | |||
| ATM Reimbursement | |||
Summary
USAA is undoubtedly unique. In addition to all of the above banking services, it also offers a full menu of personal, mortgage and auto loans, insurance, investment accounts and even shopping discounts.
If you qualify as a full-service member, you can’t beat free savings and checking, free ATMs and all the investment and loan services you could ever need.
But if you’re looking for non-investment savings, shop around. USAA offers a paltry interest rate for savings, even for high-balance CDs. And I was surprised that the bank doesn’t provide a money market savings account for high-balance savers.
Have you tried USAA? Let us know your experience in the comment section!
Their website advertises falsely that they follow the SCRA and offer even lower benefits to active duty and deployment services, which is great since it is a military based company. However, when I called about it after submitting documents they said they no longer offer these benefits to Service members effective October 1, 2019. When I told them this was federal law, they said yes, but it doesn’t apply to credit cards, apparently finding a “loophole” somewhere to deny the SCRA to members serving their country on deployment. This is literally the only one of my creditors that doesn’t offer these benefits to customers. American Express, Discover and Chase all offer a reduced rate while on deployment. In fact, American Express took my APR to zero while my husband is deployed.
1st let me state up front that I have been a USAA member since 1985. I have had insurance from them since then. I have used their auto financing for every vehicle I have bought since 1992 and I have had a USAA Credit Card since around 1990. I recently moved and wanted to start a new house account for my wife and I to use for house expenses. I opened the account with the help of the customer service people because the website was not operating correctly. I deposited $500 via an ACH (Automated Clearing House) transfer from my long term Wells Fargo Account. I immediately got a note that a 5 day hold was put on the deposit and only $100 was available. This is extremely unusual since ACH transfers usually complete with in moments and never take longer than end of next business day. I called back the Customer Service people and the representative assured me that because it was a new account and that it would not happen in the future. To make a long story short, a month later I now have made multiple deposits for thousands of dollars and EVERY deposit I or my wife have made has had a 5 day hold. This has even gotten so petty that a $2.50 deposit from her BofA account got a hold put on it. I require better integrity than this in my business relationships. This account is going to be closed very soon because of dishonesty and bad practices not adhering to the regulations banks normally follow.
I do not recommend this bank any longer. I have been with them for well over 10 years. Two years ago we bought a house and needed to give a check to basically hold the house. For some reasons, the “people” that were selling the house, decided to keep the check for 2 years and then decide to cash it, in the middle of a pandemic where a lot of people have lost jobs, including my husband. So what was left in the bank was already spoken for. Well, despite having a three month “expiration” date for checks, wonderful USAA decides to cash the check and will not help to get the money back. I even called the other bank and the other bank was willing to help, but since USAA refuses to help, we are now out money for our mortgage. Thanks a lot USAA, I can really tell how much you value your long standing customers. Why even bother having an “expiration” date for checks if you don’t honor it? I’ve had other issues with this sorry bank before, but this one takes the cake, and I will be looking for another bank, I suggest you do the same too.
I recently enrolled into USAA. I opened a savings account and moved several thousand into that account. I talked to a financial adviser and created an IRA into which to rollover my 401k. I then initiated the rollover, which hasn’t yet occurred.
This morning I attempted to login and found that I was locked out. I contacted support and after MANY handoffs I learned that USAA has decided that I was doing something fraudulent. They will do no business with me, and they won’t explain the decision. And there is no way to have them reconsider that decision.
So now I have 10,000 in a savings account that I can’t reach and I have several hundred thousand being rolled over into an IRA which is an account that has been canceled. I am attempting to cancel the rollover but am unsure if I can do so.
When they decided to cancel my account they made no effort to reach out to me. What a mess!
They told me on the phone that it was not possible to tell me why they think I am doing something fraudulent.
Also, their web software is extremely buggy. I attempted three separate operations online on three separate days. All three operations failed due to buggy software. I kept encountering pages in which the “Next” button would not work. All three operations had to be done via phone.
Was on the phone many times and spent most of that time listening to their USAA jingle.
I strongly suggest that you avoid USAA. How I wish I could rate them less than 1 star! This was my biggest mistake in many years.
usaa banking’s customer service is the worst in the business. i suggest you contact customers or read reviews online about how they have eroded over time. you can’t even get through to them on the phone and their chat option is an absolute joke with single replies every 10 min!