About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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New USAA Bank Customers Must Now Have Military Affiliation


USAA Bank has recently implemented a change in its policy regarding who is eligible to open bank accounts. For new customers, only those with a military affiliation are eligible to open deposit accounts. For several years USAA Bank was allowing anyone in the country to open a deposit account. However, it hasn’t always been open. When I first started to report on USAA Bank eight years ago, the military affiliation was also enforced.

Thanks to the reader who emailed me news of this policy change. I have also confirmed this change by calling USAA. According to the USAA CSR, new customers must have some military affiliation to open a deposit account. That affiliation can include being an active military member, being a veteran or having a family member who is a USAA member. Those who already have a USAA deposit account are grandfathered in. Even if existing bank members don’t have a military affiliation, they can remain with USAA and open new deposit accounts just like they have in the past.

I also asked if existing bank members who don’t have a military affiliation can deposit checks using their PCs or smartphones. These features are called Deposit@Home and Deposit@Mobile. There has been a long-held policy that to use these features, the member must be eligible for USAA auto or property insurance. This essentially limits these features to members with military affiliation. According to the CSR, this is still the case.

Although this news is disappointing, it’s probably not a major issue for most savers who don’t have USAA accounts. The bank does offer a nice free checking account with many perks, but the other deposit accounts don’t have much to offer. Currently, the interest rates aren’t competitive compared to rates at other internet banks. For example, its 5-year Jumbo CD has a yield of only 1.11% (as of 9/17/2013). That hasn’t always been the case. In 2011 USAA Bank was offering some competitive Jumbo CD rates.

It is important to remember that USAA is not a credit union. It’s a bank, but they now act like a credit union in limiting who can open accounts. Just like Navy Federal Credit Union, you must have a military affiliation to be eligible to join. However, there are several credit unions which make it easy for all to join. One noteworthy example is Pentagon Federal Credit Union. Anyone can join PenFed by joining an association. Based on recent news, these all-access credit unions may become less common.

Related Pages: USAA Bank

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Previous Comments
  |     |   Comment #1
This is pathetic!  A bank trying to act like a credit union?  What else are they going to do to drive us away. Like I would want to do business with USAA Bank no matter what it calles itself.  They have one of the worse EWPs around last time I did business with them years ago.  I guess they won't be insured by the FDIC now either.  The banks must have heard we were leaving them for credit unions so now they are becoming credit unions??  I sure hope none of the others decide to cross over. 
  |     |   Comment #2
I made an error in my first post.  The bank I am referring to is US Bank.  I keep getting them confused.  We don't even have a USAA  Bank in our area.  I don't know anything about USAA Bank.
  |     |   Comment #3
I don't use them for banking, but do use them for practically everything else.  I had access to them through my father.  I have never had any problems with them.  BTW, USAA use to also have a CU but they recently changed their name and received a community charter.  They are now United San Antonio Community Federal Credit Union.
  |     |   Comment #4
By implementing this change I expect improvements in customer service, higher deposit rates and lower loan rates. Once the scope of eligibility, or membership, for some of these major banks and credit unions expands beyond their original charter things seem to go gradually downhill. Perhaps USAA saw the light. Hint to PenFed?
  |     |   Comment #5
Strange how the world works.  Forty-four years ago I was drafted.  When I showed up to be mustered in, the Army flunked me out for physical reasons, and I eventually became 4F.  Little did I realize this would impact my ability to later open a USAA deposit account!


In fact, I've been letting my CDs at USAA run off because its rates haven't been competitive recently.  I have my last CD maturing in November.  I wonder if they'd let me open a free checking account right now to keep my grandfather status alive.  Or maybe I could roll the minimum amount of the CD over and stay qualified.  Not sure it's worth the effort. 
  |     |   Comment #6
This is not the first time that USAA has flip flopped from NonMilitary to Military eligibility.  This is only a guess, but I suspect that the door will be closed to NonMilitary applicants for a good long time.  Hopefully, they will start to offer better CD rates in the future.
  |     |   Comment #7
For years they've always kept changing their policy on who could  open an account.  I've been with them for 10 years, always kept some type of an open account.  Years ago, they had some great rates.  They let me in the first time, had an uncle in WW2 (I was in the very gray area of getting in). 
  |     |   Comment #8
Just remembered, I did rec. a notice: if in the future, I closed my current account, I would not be eligible to open a new account.
  |     |   Comment #9
Ken: I hope you will comment in your blog what others have touched on - that USAA, which once had the best savings and cd rates, has for a long time been highly noncompetitive in their rates (I have moved my life savings out of there as their 7 year cd rate is 1.06 compared with 2.73 for a bank in Richmond that you include in your rate list; I save at Amex, whose savings account rates are 4 times what USAA pays (.85 vs. .20). USAA used to be the place military and affiliate families could trust their life savings; they have disrespected that trust in my view by offering rates that are 2-4 times less than the most competiive banks.
  |     |   Comment #10
#9, whats the name of that Richmond bank? and I assume that's Richmond VA
  |     |   Comment #11
Hi Hoody: It is Franklin Federal - Ken's got it posted in his rates. They are rated B- by Weiss which is I think the same as USAA - a decent rating. It is VA.
  |     |   Comment #12
OK thanks KC, I see they have a branch by Ironbridge Road  Chester, I might look into them, Navy is a lot lower than that. Not right off, but something to keep in mind.
  |     |   Comment #13
Well just looked at their rate sheet, and looks like Navy does have them on anything less than 4 year mark, and since I don't want to go much further than 2 years I guess I'll stay with Navy for now, they are at .95 for 18 mo and 1.05 for 24 mo, while Franklin is at .60 for those.

But its still something to consider depending.......
  |     |   Comment #14
What is the EWP for the 7-year certificate at Franklin Federal?
  |     |   Comment #15
Lou: I didn't ask about early withdrawal penalty in my conversation with them, but the contact at Franklin is Saundra, who can be reached at SJohnson at franklinfederal dot com   If you find out, please post.  Also to Hoody, don't forget to considerthe possibility that longer cds with small EWPs may beat shorter cds even if you pull out early, as Ken has pointed out with places like Ally. 
  |     |   Comment #16
Be careful with Ally.  They can change the terms of the deposit agreement.  This is from the Ally terms and agreements:

Please be aware that accounts or services can change over time. We reserve the right to delay,

discontinue or make changes to accounts or services, and to convert your existing accounts and

services into new accounts and services. You may not get advance notice of this. We may change

this Agreement, and we may add to or delete from this Agreement, and the updated agreement

will supersede all prior versions.


Srock Gibson
  |     |   Comment #17
Just as with PenFed, I believe you can still open an account at USAA by paying $5 to join the National Military Family Association.

Here's the USAA page on their partnership:


  |     |   Comment #18
Re: Srock Gibson (anonymous) - #17,Wednesday, September 18, 2013 - 12:01 PM

On the site page you posted it contains the following regarding a partnership with the National Military Family Association..."You and your family members may be eligible to enjoy the benefits of investments and insurance from USAA."

Per a phone call with a customer representative for USAA @ Sep 19th 4:48 PM:

If you join the National Military Family Association through a civilian family membership you may be eligible for USAA insurance products. For new banking accounts only those with a military affiliation are eligible to open accounts.

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