The Best Bank for Our Armed Forces

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Maybe haven’t heard of it, but if you are either serving in the armed forces or were honorably discharged from the military, there’s a top-ranked bank eager to have you as a customer. It’s called USAA, and it has a deal or two for GI Joes and Janes.

USAA doesn’t actually bill itself as a bank, although banking is at the very core of what it does. Its Web site describes it as “a diversified financial services group of companies, (that) is among the leading providers of financial planning, insurance, investments and banking products to members of the U.S. military and their families.”

The bank — yes, that’s what we’re calling it — counts 7.3 million members or former members of the military, with $68.3 billion in assets under management. In 2009, when a lot of banks recorded their financial ledgers in red ink rather than black, USAA earned $423 million in net income and generated positive investment income. The bank also returns a good chunk of those profits to members in the form of dividend checks.

According to its Web site, USAA was founded in 1922 by a group of Army officers who decided to self-insure each other, forming the United States Army Automobile Association. In 1923, the company began to extend eligibility to the other branches of the armed services, and was renamed United Services Automobile Association (USAA) the following year. In 1996, eligibility was extended to U.S. military enlisted personnel — but only personnel who served in or after 1996.

But now the bank is offering membership to U.S. armed forces veterans who served prior to 1996. Joe Robles, a retired Major General in the U.S. Army and the chief executive officer at USAA, announced in a recent letter to members that the banks was lifting the restrictions on retired U.S. armed forces personnel. “Our mission states 'USAA seeks to be the provider of choice for the military community.' Not just the officer community. Not just military retirees. Not just those who served after 1995. (So) we are carefully and responsibly managing USAA's growth, and have taken incremental steps in expanding membership eligibility to bring us to this point. We wanted to be very sure that USAA has the capital, the operational capacity and the capability to precisely underwrite and price for risk at the individual level.”

The bank thinks that there are enough interested U.S. military veterans that it could raise its membership rolls from 7 million to anywhere between 25 million to 60 million — particularly with the huge influx of retired Korean War veterans (3 million), Vietnam veterans (about 7.3 million) and almost 2 million Gulf War veterans, according to the U.S. Department of Defense.

The bank has a good story to tell veterans too. It’s been named “Customer Service Champ” by Business Week three years running; it has a reputation for low credit card rates that don’t rise on a whim; and it has a good track record on keeping bank fees low.

What are the up-to-date criteria for becoming a member of USAA? According to the bank, you can join USAA if:

  • Your parents have ever been USAA members;
  • You serve in the military;
  • You have served in the military and were honorably discharged.

If that describes you, check out USAA for yourself here.

We can never really repay the brave men and women who put their lives on the line to protect our country,but USAA is certainly doing its part to make life a bit easier for our armed forces, current and retired. And there’s something to be said for that.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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