Best Military Banks and Credit Unions

Since almost 90% of American families have neither a head of household nor spouse in active military service, it’s no wonder that many businesses offer few benefits specifically targeting military families.

Fortunately, many banks and credit unions recognize the unique needs of those families, and choosing the right financial institution can offer numerous advantages. Whether it’s the convenience of branches located near military bases, discounted loans and fees, military-specific perks like deployment support, or employees who recognize the circumstances facing active and retired service members, it makes sense to look for a bank or credit union that makes a point to serve the military.

When your occupation means that you can be sent almost anywhere in the world – with or without your family – for an indefinite time with little notice, it creates dynamics that few in civilian life encounter. It affects your ability to access your finances, get your pay, pay your bills, securing affordable housing and planning for the future. It can be critical to be connected to a bank or credit union that understands your needs and offers the appropriate benefits.

What Makes a Bank or Credit Union “Military Friendly”?

Accessibility is a key factor in whether a financial institution is “military friendly.” It helps to have branches on or near military bases while still having good access to ATMs and online banking services. The bank or credit union should offer VA mortgage loans, a significant perk available only to those in the military or veterans.

Military friendly institutions offer special discounts to service personnel – reduced or waived fees, better interest rates on loans or savings/checking accounts – and products that take into account the difficulty of deployments. A key difference between traditional banks and military credit unions is that the latter are often member-owned, so the profits are poured back into lowering fees and offering specialized support.

Top Military Banks and Credit Unions: The Standouts

Although most also accept civilian customers, several banks have been formed specifically to assist with the financial needs of military members. Such banks often have branches on or near military bases. Other big, national banks have products and even dedicated advisers to handle issues from their military members. This list covers some of the best options out there for service personnel, veterans, and their families.

Navy Federal Credit Union

Navy Federal serves 15 million members. Active military, veterans, Department of Defense employees or retirees and their family members are eligible for membership. It has more than 360 branches worldwide, some of which are on military bases – a smaller number than some financial organizations.

Active-duty members receive discounts including no monthly maintenance fee, access to more than 30,000 no-fee ATMs in North America, free checking, and early access to direct deposit. It also offers up to $240 per year in rebates for fees at 2 million Visa/PLUS ATMs worldwide.

Active-duty and veteran members can receive 100% financing VA home loan options, a $200 bonus for refinancing an auto loan of $5,000 or more from another lender, share certificates with APYs up to 3.8% and discounts on insurance, vehicles and trust and will preparation services.

USAA Bank

USAA may be better known for insurance, but it has a wide range of financial services, including banking, investment accounts, mortgages, and other loans. Founded by soldiers more than 100 years ago, USAA membership is available to those who are actively serving or U.S. Armed Forces veterans and their family members, as well as employees in a variety of defense-related government branches.

Those banking with USAA can get their military pay two days early with direct deposit. USAA offers both VA and conventional mortgages, as well as auto and personal loans and credit cards. Withdrawals and deposits at USAA ATMs are free, and there are 100,000 USAA-preferred ATMs in the U.S. where the first 10 monthly withdrawals are free. USAA will reimburse up to $10 per month in fees charged by the out-of-network ATM providers.

USAA only has a few brick-and-mortar offices, so it may be a more attractive option for those who are comfortable with mobile and online banking. Its mobile app is rated 4.8 out of 5 stars in the Apple store with over 2 million reviews.

Armed Forces Bank

Although Armed Forces Bank serves active-duty military and veterans, it is not limited to them; civilians can access its financial services, too.

Military personnel can get early pay with direct deposits into the Access Freedom Checking account, which has no monthly service fees, no minimum balance requirements, and no-fee money orders. It also provides early pay for military direct deposits. Armed Forces Bank provides access to over 38,000 surcharge-free ATMs. Its investment checking account provides interest and unlimited ATM fee waivers. A wide array of loans, including VA, FHA and conventional mortgages, are also available.

All its branches are located on military bases, so those without base access will have to bank online.

Pentagon Federal Credit Union (PenFed)

Despite its military roots, Pentagon Federal Credit Union (PenFed) also is open to civilians. But its commitment to service personnel and veterans remains. PenFed’s Veteran Entrepreneur Program has assisted more than 120 veteran and military injured, wounded, and aging heroes. This year, PenFed is introducing programs to provide resources to veteran and military-spouse business owners.

Particularly attractive to potential clients is PenFed’s high interest rates. Its Premium Online Savings Accounts earn 2.70% APY, and its checking account earns 0.15% to 0.35% APY depending on the account balance.

PenFed has branches in 13 states and Washington, D.C., and on military bases in Guam, Puerto Rico and Japan and offers free access to around 85,000 ATMs. However, there is a $1.50 charge for using an out-of-network ATM, and PenFed doesn’t reimburse fees charged by out-of-network ATM providers. There also is a 2% charge for using your debit card or credit card outside the U.S.

Security Service Federal Credit Union

With branches in Colorado, Texas and Utah, Security Service FCU is the most geographically limited institution on our list. You may join if you are a member of military branches at select bases; as a civilian if you live, work, worship, study, or have a business in Colorado, Texas, or Utah; or if you’re related to a current Security Service member. You can, however, make deposits, withdrawals, or loan payments at 5,000 other credit unions throughout Louisiana, New Mexico, Oklahoma, and Texas.

Along with banking products and investment services, Security Service offers several perks, including phone protection, zero-copay telehealth, credit monitoring, roadside assistance, a TurboTax discount, and financial education tools. Members also may access more than 30,000 ATMs.

For active-duty members or reservists called to active duty who have deployed, Security Service offers an emergency deployment loan of up to $2,500. Other military perks include lower vehicle insurance, early military direct deposit, and a dedicated military phone line.

First Command Bank

Although civilians can use First Command Bank, it maintains a focus on serving the military community. Three-fourths of its financial advisors are military spouses or veterans who understand military pay and benefits as well as the challenges and opportunities that are part of military life.

First Command’s savings options include money market accounts, CDs, and IRAs. Money market accounts allow up to six fee-free transactions per month, no monthly maintenance fees, free overdraft protection, and access to over 30,000 ATMs. It offers $10 in out-of-network ATM reimbursements per month and free incoming wire transfers. A balance of at least $100,000 is required to receive the highest APY for a First Command money market account or CD. The bank provides free overdraft protection. First Command doesn’t have traditional bank branches, and most of its 165 offices are located near military bases.

First Command offers retirement planning from its team of financial advisors and through products such as annuities, traditional IRAs and Roth IRAs.

Service Credit Union

Service Credit Union offers an array of benefits for active-duty military, veterans, and their families. Its most noteworthy feature is the Deployed Warrior Savings Account. An active-duty service member currently serving in a combat zone (as defined by the credit union) may qualify for an annual savings APY of 10% with a deposit of up to $10,000. Military relocation loans of up to $3,000 are another military-specific feature.

Savings accounts require only a $5 minimum opening balance, and there are no monthly fees. Service has more than 88,000 ATM locations worldwide, and its dividend checking account pays 0.15% APY but requires a $1,500 minimum balance to avoid service fees.

Service Credit Union has just 52 branch locations, so members may need to be comfortable doing their banking online.

PNC (and Other Major Bank Options)

PNC Bank waives monthly checking account fees for military members who set up a direct deposit of $1,000 or more per month, which is half the direct deposit requirement for civilian customers. Military members may earn a $300 reward when their new PNC Mortgage is funded. The bank also offers up to a $400 bonus for customers who make direct deposits of $5,000 or more with PNC’s Virtual Wallet. PNC also offers VA mortgage loans.

Chase Bank offers benefits for active, veteran, reserve, or National Guard military members in its Chase Premier Plus Checking. The program waives the $25 monthly service fee, waives Chase fees for non-Chase ATMs, waives fees for counter checks, cashier’s checks, and money orders; waives the monthly fee for up to two additional checking accounts and a savings account. Chase also offers VA mortgage loans.

For military members, U.S. Bank waives monthly fees on the Bank Smartly Checking account and allows four ATM transaction refunds per month. Military members also have fees waived for Standard Savings and Elite Money Market accounts and the IRA annual fee. The bank has a Military Service Center to assist with military-specific financial needs.

Specialized Benefits and Military Perks

The benefits financial institutions offer to military personnel largely fall into two categories: special deals and discounts for services offered to all customers and programs targeted at the unique needs of those in the armed services.

In the first category, benefits may include lower loan interest rates, getting pay 1-2 days early through direct deposit, waived or discounted fees for using ATMs outside the bank’s network, free or discounted checks and educational resources, including financial advisors well-versed in the needs of military personnel.

Some banks also have military-specific benefits to help those being deployed or relocated, including relocation loans, credit card or loan payment deferrals and insurance adjustments during deployment, as well as the ability to pay bills overseas in local currencies and use a V Pay card where U.S. cards aren’t accepted.

Pros & Cons of Military-Focused Institutions vs Regular Banks

Just as in civilian life, military personnel don’t all have the same financial needs. For some, a regular bank can provide everything they want and may even be more convenient. However, there’s a reason military-focused financial institutions exist. Many were created by former servicemen who knew from their own experiences and seeing what happened to comrades that some banks weren’t well-suited to those in uniform.

Below are some pros and cons to consider.

Pros

• Military-oriented institutions offer benefits tailored for service members, such as deployment loans, early direct deposits, special savings accounts for deployed personnel and VA loans (which usually offer better rates and require no down payment).
• These banks also provide perks to military personnel that include better interest rates on loans or savings/checking accounts and waiving monthly fees or paying back fees charged by ATMs from other institutions.
• Another advantage is that military-focused banks and credit unions have employees who understand issues facing service personnel, so you’re less likely to have to explain your circumstances to someone who has no idea what military life and procedures are like.

Cons

• Some military-oriented institutions serve only those in active service, veterans, or their families, so their benefits won’t extend to civilians.
• Some military banks have few brick-and-mortar branches away from military installations, so in-person banking services might not be available when you’re away from your base.
• The interest rates on savings accounts are often lower than competitors; a higher deposit is required to get higher rates.

Factors to Consider When Choosing a Military Bank or Credit Union

Not all military banks and credit unions have the same features, so it’s important to determine what features are most important to you.

Accessibility: If you’re comfortable with online banking, access to physical branch locations may not be critical to you, even if you expect to move around a lot. Depending on whether your bank reimburses ATM fees outside its network will be a factor in how big ATM network you require.

Deployment benefits: Some service members are more likely to be deployed overseas than others. If you’re one of them, inquire about what deployment benefits the military banks and credit unions offer specifically for active-duty service members.

Services, rates, and fees: You want your money to work for you, so compare the products, rates and fees offered by military banks. Depending on how much money you expect to save, interest rates may or may not be more important than the ability to avoid fees.

Financial counseling: Some military banks offer financial education and advisers to help your needs. If you don’t consider yourself financially savvy – or even if you do – see what services your bank or credit union provides.

Recent Trends in Military Banks and Credit Unions

Like everything else, military banks and credit unions change with the times. The digital banking options allow 24/7 access for military personnel, and many military-oriented banks waive monthly service fees and waive or reimburse non-network ATM fees worldwide and foreign transaction fees. Greater reliance on online banking has led banks to use multifactor authentication, website encryption, alerts for suspicious activity and other methods to prevent fraud.

There is also growing support for veteran-owned businesses and entrepreneurship like PenFed’s Veteran Entrepreneur Program. The free program uses the PenFed Foundation’s network of investors, mentors and experts to help raise early capital, build strategic relationships, and provide guidance from industry leaders. The federal Small Business Administration Veterans Advantage program includes benefits like preferred access to SBA loans and programs like the Military Reservist Economic Injury Disaster Loan (MREIDL) for those called to duty.

Although no major military bases have closed since 2005, when three Army bases and one Navy and Air Force facilities were shuttered, the possibility of downsizing emphasizes the need for service members to have good access to digital banking and a broad network of ATMs.

Federal regulatory changes have offered service personnel additional security. The Military Lending Act protects service members and dependents from credit card interest over 36%, bans prepayment penalties, forbids mandatory arbitration, and prohibits requiring military allotments for loans. The Servicemembers Civil Relief Act offers relief for mortgages and other secured loans by reducing interest and preventing foreclosures.

Tips for Maximizing Military Banking Benefits

Nothing says you must only work with one bank or credit union. If one institution has better savings or loan rates while another offers different benefits that fit your needs, consider having accounts at multiple institutions. However, make sure to avoid any excess fees.

Is a Military Credit Union or Bank Right for You?

There are a lot of excellent banks and credit unions out there, but not all of them are oriented for people who serve in the armed forces. The ones that focus on meeting the needs of military personnel provide numerous practical advantages as well as having employees who know what you’re going through. Do your research to find the financial institution that offers the programs and perks that fit your situation best.