USAA vs. Navy Federal Credit Union - SmartAsset

There are special banking opportunities for those who have served our country in the military, are currently serving or for the families of these individuals. Two such options are Navy Federal Credit Union and USAA Federal Savings Bank. Let’s break down who qualifies for each institution and compare account offerings, fees, rates and more.

Once you’ve found the right bank for you, a financial advisor can help you put a financial plan together for your long-term goals.

Who Can Use Navy Federal Credit Union?

Credit unions are generally more exclusive financial institutions, reserving membership and services for certain communities like a neighborhood or set of companies. Navy Federal Credit Union keeps with this model and limits its services to servicemembers, veterans, Department of Defense (DoD) civilians and family members.

Servicemembers and veterans includes Active Duty members of the Army, Marine Corps, Navy, Air Force and Coast Guard, Army and Air National Guard, members of Delayed Entry Program (DEP), Department of Defense Officer Candidate/ROTC, Department of Defense Reservists and veterans, retirees and annuitants of those departments. Department of Defense civilians means if you are a civilian employee, U.S. Government employee assigned to DoD installations, DoD contractors assigned to U.S. Government installations and DoD civilian retirees and annuitants. Finally, you can qualify as an immediate family member, meaning grandparents, parents, spouses, siblings, children (including adopted and stepchildren), grandchildren and household members. If you’re unsure whether you qualify, you can always contact NFCU to determine your eligibility.

As a military-affiliated member, NFCU offers special perks like rewards and discounts. You’ll have access to military pay advances, favorable banking and loan rates and easy direct deposit. NFCU also provides a Thrift Savings Plan to help you save and manage your money and offers their Active Duty Checking account, made for those actively serving.

Navy Federal Credit Union has locations in the Washington, D.C. metro area; Hampton Roads, Virginia; San Diego and Jacksonville, Florida. Overseas, you can find locations in Africa, Bahrain, Cuba, Diego Garcia, Greece, Guam, Italy, Japan, Korea, Singapore and Spain.

Who Can Use USAA Federal Savings Bank?

Similar to Navy Federal, USAA Federal Savings Bank is reserved for active military, former military, family and cadets and midshipmen. Active military includes those who are current serving in the U.S. Air Force, Army, Coast Guard, Marines or Navy. Former military means those who have retired or separated from the U.S. military with Honorable discharge. Family includes widows, widowers and un-remarried former spouses of USAA members and individuals whose parents joined USAA. Finally, cadets and midshipmen includes those at U.S. service academies, in advanced ROTC, on ROTC scholarship and offer candidates within 24 months of commissioning.

Banking with USAA provides a number of great benefits like access to over 100,000 nationwide ATMs, no minimum balance fees, military pay advances and rewards programs. You will also have access to tools and guidance in saving for retirement, military and work life balance, loans and more.

USAA maintains offices in Annapolis, Maryland; Austin, Texas; Chesapeake, Virginia; Colorado Springs, Colorado; Dallas; Highland Falls (West Point), New York; Phoenix; San Antonio and Tampa, Florida. USAA also has offices in England and Germany.

Navy Federal vs. USAA Federal Savings Bank: Membership and Accounts

Although both geared toward military members and their families, Navy Federal and USAA differ a little in their eligibility requirements. This is mostly noted in Navy Federal’s inclusion of Department of Defense civilians, which USAA does not cover. Including DoD employees opens up some great banking opportunities for those who are not quite servicemembers.

Both institutions offer their customers great access with 24/7 customer service and online and mobile banking features, too. Both institutions are pretty limited in their U.S. branch locations, however. Navy Federal does provide a wider physical reach than USAA, especially overseas.

When it comes to each bank’s account offerings, both offer a great variety of accounts, including basic savings and checking accounts. NFCU stands out for its five education savings accounts (ESA) options. This means you can open five kinds of Navy Federal accounts as ESAs to save for education expenses. Similarly, USAA offers a 529 College Savings Plan which you can use to save and pay for education expenses, as well. If you’re looking for a money market account, though, you can only find that with Navy Federal.

Navy Federal vs. USAA Federal Savings Bank: Fees

A huge plus to banking with Navy Federal is that you get to avoid account monthly fees. The only account that charges a service fee is the Navy Federal Credit Union Flagship Checking Account with a $10 fee. You can still waive this fee with an average daily balance of at least $1,500. USAA also offers free accounts, except for its USAA 529 College Savings Plan which charges a $10 annual fee which can be waivable when specific conditions are met.

Both banks are generous in their fee schedule when it comes to ATM usage. Both provide access to thousands of ATMs nationwide. NFCU will even reimburse you for out-of-network ATM fees you might face, up to $10 and $20 per statement cycle, depending on the account you have. USAA refunds up to $10 per statement cycle in ATM surcharge or usage fees for transactions made at out-of-network ATMs. 1% Foreign Transactions Fee may apply.

Navy Federal vs. USAA Federal Savings Bank: Rates

On the whole, Navy Federal Credit Union offers better rates than USAA. For starters, the Navy Federal Credit Union Basic Savings Account earns at a 0.25% APY. This includes all account balances, so you don’t have to worry about meeting a certain balance to earn interest. At USAA, you’ll need a savings account balance of at least $25 in its lower tier to earn 0.01%. Even at the highest balance tier of $10,000 and over, you will still earn at a lower rate than Navy Federal’s. USAA’s Performance First Savings Account earns at slightly higher rate tiers, but you’ll need at least $10,000 to open the account in the first place.

Navy Federal’s highest rates reach 5.30% on its special and long-term CDs. The same goes for USAA, although these rates don’t match Navy Federal’s. Plus, all of Navy Federal’s checking accounts earn at a 0.05% APY, except the Flagship Checking Account which earns between 0.35% and 0.45%, depending on your account balance. USAA’s checking accounts earn at a mere 0.01% APY.

Bottom Line

While you might not have thought about a credit union over a bank, Navy Federal Credit Union offers servicemembers, veterans, their families and Department of Defense civilians a great banking option. NFCU has a wider reach in terms of both physical locations and membership eligibility. You can also find better accounts at NFCU, with more favorable fees, minimums and interest rates.

Tips for Finding the Right Bank

If you’re still undecided about which bank to choose, rest assured that there are plenty of options out there so you’re sure to find the right one. You should start by determining what you want from your bank, though. Do you want the best customer service? Check up on banks’ customer service reviews. Or if you want in-person access to your accounts throughout the country, take a look at big banks since they can offer thousands of branches and ATMs.
Of course, branch access and good customer service doesn’t mean anything if you’re not happy with your accounts. It helps to compare certain accounts like free checking accounts or simple savings accounts. That way you can find the account that best matches your financial situation and goals.
Once you’ve found the right bank, working with a financial advisor is another key step towards making the most of your money. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.