How to Save Money With USAA: 4 Simple Steps

April 4, 2023
How to Save Money With USAA: 4 Simple Steps

USAA is a financial services company that’s geared toward the military community. In fact, they only serve the military community.

If you’re not particularly great at money management – or even if you are – USAA is catered to helping you save and invest wisely. They’re probably one of the best services available to military members and their families; known for their exceptional customer service and low insurance rates.

Read on to find out:

  • Why you should become a member of USAA
  • If you’re already a member – what you should be taking advantage of
  • How to save money with USAA

Here are four easy steps you can take today:

How to Save Money With USAA

1. Get an insurance quote

USAA offers auto, home, life and health insurance, as well as pet/travel/small business and more. And you can get a quote on any of these categories for free. So why should you choose USAA for insurance?

Well, for starters, you should choose it because you have the option. USAA only covers people who are military-affiliated — whether they’re a service member, veteran, spouse, or child of a service member. Most people don’t have access to their low insurance rates, and if you do, you should take some time to learn about them.  

ValuePenguin writes a great review of USAA insurance here. The perks include:

  • Great rates for auto and home insurance 
  • Very affordable for young drivers (beating out Geico, Progressive and State Farm) 
  • Accident forgiveness  
  • Low premiums for homeowners with high-value properties 
  • Special discounts and services for military families 
  • Fantastic customer service

Members who switch to USAA from another insurance company save an average of $707 a year. 

2. Open a USAA checking/savings account

A lot of people don’t realize that USAA is more than just insurance. If you’re military-affiliated, you can open a free checking or savings account with them (or both). 

Here are some of the cool perks to their checking accounts

  • There’s no minimum balance
  • You avoid overdraft fees
  • Zero monthly service fees
  • Access to over 60,000 USAA-preferred ATMs nationwide
  • You can earn interest if you have a balance of $1,000+
  • Military members get paid a day early

Now, if you want to open a USAA savings account, you’ll get access to incredible interest rates. According to the FDIC, the average bank pays less than 0.1 percent interest on your savings. Here are USAA’s rates: 

  • Less than $10,000: 0.05 percent
  • $10,000 to $24,999: 0.10 percent
  • $25,000 to $49,999: 0.10 percent
  • $50,000 to $99,999: 0.90 percent
  • $100,000 to $249,999: 0.95 percent
  • $250,000 to $499,999: 1.04 percent
  • $500,000 to $999,999: 1.40 percent
  • $1,000,000 or more: 1.40 percent

Even better, USAA actually uses APYs (Annual Percentage Yield) instead of straight interest rates. This means you get to build interest on your interest, instead of just building interest on your initial deposit.  

3. Look into their CDs

Opening a CD is really how to save money with USAA. Or rather, how to make it.

A CD (or Certificate of Deposit) is like putting money into a savings account… except you can’t withdraw it. Well, at least not for a while. Essentially, it’s a time-bound agreement where you say: “I’ll put [x] money into this account for [y] time, and I won’t touch it for that entire time.” In exchange, the bank you use will give you a much higher interest rate on that money. Generally, if you put in higher amounts of money for longer, you’ll earn more interest.

Like their savings accounts, USAA’s CD rates are hard to beat. They’re entirely fixed (so you know what you’re getting), and they’re all APYs.

Their best rates are on their three-year CDs; a minimum deposit of $1,000 will earn you a 3.71 percent APY (Annual Percentage Yield), and $175,000 will earn you a 3.71 percent APY. What does that look like exactly?

After three years, your $1,000 will be $1,115.48. And that’s a pretty small investment. If you put in $175,000, you will end up with $195,209.05 — a profit of almost $20,209.

4. Use their free Savings Booster

If you’re a USAA member and you have a hard time setting aside money, you can use these free tools to help you. USAA’s Savings Booster has several different functions:

  • Text savings analyzes your checking account every few days to see if small amounts can be transferred to savings. You’ll get a daily text with your account balance. 
  • Recurring savings allows you to automatically set aside a portion of your direct deposits. You decide how much, and you can stop it at any time. 
  • ATM rebates can be transferred automatically to your savings. USAA refunds up to $15 a month in ATM fees.
  • Tax refunds lets you pre-determine how much of your tax refund to save. Then, when it’s deposited, that amount will automatically be transferred. 

Learning how to save money with USAA is as simple as visiting their home page. Seriously. You can also check out their Cash Rewards Credit Card, Market Insight, Retirement Planning, Travel Deals, and more. 

Here’s a list of the states that don’t tax military retirement (and the 8 that do).

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