When you’re eligible to join a members-only financial institution, such as USAA, it’s natural to assume you’d benefit from the association.
And with USAA, your assumption would be spot on; where you bank impacts your life every day.
And USAA offers a wide range of financial products and services to help you through just about every aspect of your financial life, including banking, investing, insurance, lending (credit cards, mortgages, auto loans, and other loans), and many more member services.
However, you do need to qualify for USAA membership, which is linked to military service.
You are eligible to join USAA if you are a current or former military member, or you are the adult child of a USAA member. You can check USAA membership eligibility here.
In this USAA review, we will look at what makes USAA unique, as well as look at an overview of the products and services they offer.
USAA Federal Savings Bank Review
- Products & Services
- Interest Rates
- Fees & Charges
- Website / App
- Customer Service
USAA offers members access to a wide range of financial products and services, including banking, investing, insurance, mortgages, loans, credit cards, and much more. USAA can cover just about any major financial need. There are two primary downsides: USAA does not have many physical branches, and their interest rates leave a lot to be desired. That said, they offer excellent customer service and an award-winning website and smartphone apps, making it easy to bank with USAA from anywhere. As for the interest rates, I recommend pairing your USAA account with a high-yield savings account that offers higher interest rates.
USAA Bank Review: A Brief History
If financial institutions could grow organically, as a natural response to the needs of their members, the final product might look something like USAA, which is not a bank but an association.
USAA stands for United Services Automobile Association, and its name offers clues about the association’s origin.
A group of 25 Army officers in San Antonio, Texas, started USAA back in 1922 to insure each other’s automobiles. At that time, cars were new on the American landscape; car insurance was even newer, and the Army officers couldn’t afford it.
Nearly a century has passed, and USAA’s membership has grown exponentially.
Now, USAA serves about 12.5 million members, the majority of whom are current or former military personnel and their families.
The association has also expanded beyond insurance.
In the 1970s, USAA added mutual funds to its offerings, and in 1983, the USAA Federal Savings Bank opened for business.
But USAA’s name hasn’t changed and neither has its core philosophy: USAA’s members still own the organization and share its costs and its profits.
USAA Membership Eligibility
In some ways, becoming a USAA member is similar to joining a credit union. There are certain eligibility requirements that must be met before you can join.
If you’re thinking about partnering with USAA Bank, you’ll first need to join USAA, which is open to anyone on active duty or anyone who has been honorably discharged from the armed services, along with their immediate family members.
Who can join USAA? USAA membership is open to former and active U.S. military members and their families. Members can access insurance, banking, and financial planning services. Check your eligibility at the USAA website.
Where can you find USAA Bank?
USAA operates a handful of financial centers located near military bases, but it does not maintain a nationwide network of physical branches.
Back in the dark days, before the Internet, this was more of an issue. A member who wanted to deposit a check in, say, 1985, would have mailed it to San Antonio, then waited a week or so for confirmation of the deposit.
Now, if you’re retired from the Air Force, for example, and no longer live near a base, you can bank online, through other banks’ ATMs (USAA will refund some of the fees), or through USAA’s mobile app.
In fact, USAA has pioneered the use of online and mobile banking because its members needed better access to their services. For example, USAA was the first bank in the United States to allow mobile check deposits.
USAA Banking Products & Features
If you’re eligible to join USAA, you’ll have access to financial services that include:
- Savings accounts
- Free checking accounts
- Access to mortgage, auto, and personal loans
- Credit cards that offer special rates to members
- Investment accounts such as IRAs, 529s for education expenses, mutual funds, ETFs, and more.
Unless you’re looking for something super specific, USAA should be able to provide your basic, day-to-day banking needs.
But the question remains: Should you use USAA Bank, or would you get a better deal with a neighborhood bank or an online-only bank?
The answer will depend on your specific needs and what’s most important to you. Let’s take a closer look at USAA Bank’s services to find out how they stack up.
USAA Bank Savings Accounts
USAA routinely earns top ratings from independent ratings agencies such as A.M. Best, Standard & Poor’s, and Moody’s. Deposits are FDIC insured up to $250,000.
When many banks went into a tailspin during the Great Recession in late 2008 and early 2009, USAA Bank continued with business as usual. Its assets continued to grow. Deposits in the bank now exceed $62.5 billion.
If you’re looking for a basic savings account that’s reliable and safe, USAA Bank is a model soldier.
Members can open a basic savings account with a $25 minimum deposit or a Performance Savings that requires a $10,000 minimum deposit. USAA’s Web site offers helpful ways to re-direct pay into savings automatically.
The bank’s Performance account will offer a higher savings rate than the basic account.
But if you’re serious about saving money and would like to earn more on your savings, you may want to take a closer look at using an online-only bank in conjunction with USAA or your current bank.
Online-only banks offer rates that are five times higher than USAA’s best rates and 10 times higher than its basic savings rate.
You can also find rates on certificates of deposit at an online bank that exceed USAA’s CD rates.
Who should use USAA Bank’s savings:
- If you’re already a USAA member and your savings goals are short term — you’re saving for a used motorcycle or a new laptop, for example — your interest rate won’t matter as much, and you’ll probably be fine with USAA Bank’s options.
Who should look elsewhere:
- If you’re saving for the long term and want the best savings rate, check out an online bank. Banking doesn’t have to be an all-or-nothing activity: Even if you use USAA for checking or for an auto loan, you can still open a high-yield savings account elsewhere.
USAA Bank offers its members a basic, free checking account along with three specialized checking products:
- An account designed specifically for new military recruits that includes help filling out direct deposit paperwork.
- An account designed for children age 9 to 17 that allows parents to set spending limits.
- An account for college students that includes free bill-paying apps.
None of the options charge monthly service fees or require a minimum balance. They all offer features such as text alerts about large transactions or low balances along with free online and mobile banking.
USAA Bank’s mobile app features an easy-to-use graphic interface and quick syncing with Google, Apple, and Samsung Pay.
These kinds of features are a must when you’re deployed or on tour. Even if you’re retired or if you’re a military spouse who doesn’t live near a base, mobile banking can make life easier.
Still, it’s likely you’ll need an ATM to access cash, and unless you live near a base or a USAA financial center, you aren’t likely to come across one that features the USAA logo.
USAA Bank answers this need by giving members free access to other banks’ ATMs up to 10 times a month. The bank will also refund up to $15 in other banks’ ATM charges each month.
After you’ve surpassed those limits, expect to pay normal ATM fees, both from USAA and the bank that owns the machine.
Keep in mind that a 1 percent fee also applies to all international transactions.
Who should use USAA Bank’s checking accounts:
- If you’re on active duty, USAA Bank’s checking options are tailor-made for you and your family.
Who should look elsewhere:
- If you want a face-to-face, neighborhood bank and you don’t live near a USAA financial center, you can likely find comparable checking accounts at a local bank.
Mortgage, Auto, and Personal Loans From USAA Bank
Borrowing money from your bank can enhance your buying power and help you get ahead financially.
USAA Bank offers its members access to some pretty good lending programs.
If you’re ready for home ownership, USAA Bank can help with the financing.
As with USAA’s savings options, you can probably find a better mortgage rate online or even at a local credit union. However, USAA excels in providing VA loans.
Military veterans can use a VA loan to finance a home without a down payment and without private mortgage insurance. There is an origination fee that can reach close to 2.5 percent of the loan’s value.
Compared to a conventional loan that may require 10 percent down along with the mortgage insurance you pay to protect the lender, a VA loan can be helpful.
USAA Bank’s site offers first-time home buyers a wealth of information such as where to find a Realtor and what to expect at closing, whether you’re using a conventional or a VA loan.
Auto Financing Through USAA
USAA Bank members can also take advantage of auto financing that’s transparent and easy to access. To get the bank’s best lending rates, buyers must use USAA’s car buying service.
That may sound like a drag at first, but the car buying service can be a benefit, especially if you’re on active duty and would like to help your spouse back home with the car buying process.
USAA’s car buying service even allows you to customize features if you’re shopping for a new car, but it’s most helpful if you’re looking for a specific make and model of a used car.
USAA’s Personal Loans
These kinds of loans can be a lifesaver if you have unexpected expenses such as a major car or home repair that you couldn’t otherwise afford.
Interest rates are lower than a credit card in most cases, and a personal loan has a set amount that you can’t exceed.
USAA Bank makes instant credit decisions so you’ll know right away how much you can borrow. If you’re approved, the money will appear in your account within 24 hours in most cases.
Again, important features if you’re in active service or on the go.
Who should borrow from USAA? If you’re already a member, USAA’s loan services work seamlessly with your checking and savings accounts.
If you’re a first-time home buyer using a VA loan, your USAA membership should pay off for you here. Likewise, if you’d like help finding the right car, USAA is well-positioned to help.
Who should finance elsewhere? You can find most of USAA’s lending services at comparable or even more affordable rates elsewhere.
If you’d like the best auto rate out there, shop around some more.
USAA Bank-Issued Credit Cards
With so many options out there for credit cards, why would you choose a card from USAA, other than the fact that you’re already a member and it’s convenient?
Answer: Low fees, attractive rewards, and flexibility.
You can mix and match those features on USAA’s site to find a card that matches your approach to spending and earning points.
For example, if you eat out several times a week, USAA’s Rewards American Express card offers 3 times the rewards point when you use it at restaurants.
If you’re looking for an all-around low rate, USAA’s Visa Platinum usually offers rates that are among the lowest for a credit card. Service men and women on active duty have access to even lower annual percentage rates.
Most of USAA’s cards charge the same interest rate on purchases, cash advances, and balance transfers. This can make deciphering your bill a lot easier.
Be sure you stay in command of the situation, though. Any kind of credit card can cost you a fortune if it gets out of control.
Why use USAA for a credit card? USAA offers a wide variety of flexible card options. If you’re already a member, this is definitely a perk.
Why look elsewhere? If you’re looking for a specific kind of rewards program, not even USAA can have every base covered. Shop around to find the card that best fits your needs.
USAA Financial Planning & Investment Services
When you’re tired of simply surviving whatever financial situation you find yourself in, USAA offers financial planning and counseling to help members shape their financial futures.
Members can access general information on the association’s Web site and find helpful tools such as debt-control calculators. Members can also get personalized advice about investment tools such as:
- Mutual funds
- And even philanthropy.
USAA even offers its members its own robo-advising style investment management system. You tell the system how aggressive you’d like to be and its algorithms do the thinking (and the portfolio balancing) for you. USAA charges a 0.5 percent annual fee for this service.
Like the rest of its products, USAA’s digital investment adviser offers an easy-to-use mobile interface. You’d need $2,000 to open a digital investment account.
USAA Insurance Products
Each of these services deserves a deeper review than we can fit on this banking review.
But it’s worth mentioning these insurance products because USAA generally offers competitive coverage and premiums, and it is very convenient to buy your insurance at the same place you do your primary banking.
Advantages and Disadvantages of USAA Bank
USAA Federal Savings Bank Pros:
- Great for mobile banking
- Accounts designed for military members
- A wide range of banking products
- Help with VA mortgage loans
- Variety of credit card options
- Insurance products and services to meet most needs
USAA Federal Savings Bank Cons:
- Small network of branches
- No high-yield savings option
- USAA does not offer business banking services
Is USAA Bank Right For You?
Using USAA Bank makes the most sense if you’re already a USAA member for your car or life insurance.
After all, as a member you own and profit from USAA’s entire line of products.
And as an all-around bank, USAA Bank performs well with its checking, savings, personal loans, and credit cards, especially considering its lack of branches and ATMs nationwide which would present a customer service challenge for any service organization.
Yes, you can find better options elsewhere for each of USAA’s banking products, especially if you have specific needs such as a high-yield savings account or a rock-bottom mortgage rate.
If that’s the case, shop around until you find the product you’re looking for, even if you already have a USAA membership.
But if you’re in the military and need a full-service bank that will be available wherever you are in the world, USAA Bank deserves closer inspection.
If you do not qualify for USAA membership, then we recommend reviewing the following to find the right banking solution for your needs.