Yes, USAA savings accounts earn interest, but the rate changes and depends on your account type
USAA savings accounts do accrue interest — meaning the bank pays you a small percentage of your balance each month. The amount you earn depends on which savings product you choose and what annual percentage yield (APY) the bank is currently offering. APY is the yearly rate expressed as a percentage; a higher APY means more money in your account over time.
USAA offers several savings products, and each one has its own interest rate. The rate you see today may not be the rate next month, because banks adjust rates based on what the Federal Reserve does and what other banks are offering. Before opening an account, you should check USAA's website or call them directly to see the current APY for the specific account you are considering.
Key Takeaways
- USAA savings accounts earn interest that is added to your balance monthly, though the rate varies by account type and changes over time.
- The interest rate is shown as an annual percentage yield (APY), which tells you how much you will earn in a year if the rate stays the same.
- USAA's main savings products include a regular savings account and a money market account, each with different APY rates.
- You can check the current interest rate on USAA's website or by calling their customer service before you open an account.
- Interest is typically added to your account monthly, so your balance grows slightly each month without you having to do anything.
The difference between USAA's savings account and money market account
USAA offers a savings account and a money market account, and they earn interest at different rates. The savings account is simpler: you deposit money, it earns interest, and you can withdraw it whenever you need it. The money market account usually pays a higher interest rate, but it may have higher minimum balance requirements and limits on how many times you can withdraw each month.
If you are just starting to save and want the simplest option, the regular savings account works well. If you have a larger amount to save and do not plan to touch it often, the money market account may earn you more money over time because of the higher rate. Both accounts are FDIC insured, which means your money is protected up to $250,000 if USAA ever fails.
How interest is calculated and added to your account
Interest is calculated based on your account balance and the APY rate. Banks typically calculate interest daily but add it to your account monthly. This means that even if your balance changes during the month, the bank is tracking how much interest you have earned each day, and then deposits the total at the end of the month.
For example, if your account has an APY of 4.50% and you keep $1,000 in the account for a full year without withdrawing anything, you would earn roughly $45 in interest over that year (though the exact amount depends on how the bank calculates daily interest). The interest then becomes part of your balance, and the next month you earn interest on the interest — a process called compounding.
Why USAA's interest rates change
USAA does not set interest rates on its own. The Federal Reserve, a government agency, sets a target interest rate that affects the entire banking system. When the Federal Reserve raises or lowers its rate, banks like USAA adjust their savings rates in response. This is why you might see USAA's APY go up one month and down another.
Banks also compete with each other for customers' money. If another bank starts offering a higher rate, USAA may raise its rate to stay competitive. Checking the current rate before you open an account is important because the rate you see advertised may be different from the rate you get a few months later.
Where to find USAA's current interest rates
The easiest way to see what USAA is currently paying is to visit their website and look for the savings account or money market account page. The APY should be clearly listed. You can also call USAA's customer service line — the number is on your USAA card or in your online account — and ask a representative what the current rate is for the account you are interested in.
When you compare USAA to other banks, make sure you are comparing the same type of account. A USAA savings account should be compared to other banks' savings accounts, not their money market accounts. Also pay attention to any minimum balance requirements, because some accounts require you to keep a certain amount in the account to earn the advertised rate.
What happens if you withdraw money before earning interest
If you withdraw money from your savings account, you still keep the interest you have already earned. The interest is added to your account monthly, so once it is there, it is yours. However, if you withdraw money before the end of the month, you will not earn interest on the amount you withdrew for that month.
For example, if you have $2,000 in your account on the first of the month and withdraw $500 on the fifteenth, you will earn interest on the full $2,000 for the first half of the month and on $1,500 for the second half. The exact calculation depends on how USAA calculates daily interest, but the point is that you earn interest on the money while it is in the account.
How USAA savings accounts compare to other banks
USAA is a bank for military members and their families, so not everyone can open an account there. If you are may be able to access, USAA's interest rates are generally competitive with other online banks and sometimes higher than traditional banks with physical branches. However, rates change constantly, so the best rate today might not be the best rate next month.
If you are shopping around, look at both the APY and any fees the bank charges. Some banks charge monthly maintenance fees or fees for falling below a minimum balance. USAA typically does not charge monthly fees on savings accounts, which means more of your interest stays in your account instead of going to the bank.
Frequently Asked Questions
How often is interest added to my USAA savings account?
Interest is typically added once a month. The bank calculates how much you have earned each day during the month and deposits the total on a set date each month. You can check your account statement to see exactly when the interest was added.
Can I lose money in a USAA savings account?
No. Your balance can only stay the same or go up (because of interest) or go down (because you withdrew money). The bank cannot take money from your account, and your deposits are insured by the FDIC up to $250,000.
What is the minimum balance I need to open a USAA savings account?
USAA's minimum opening balance varies and may change. Check USAA's website or call their customer service to find out the current minimum for the account you want to open. Some accounts may have no minimum, while others may require $25 or more.
If interest rates go down, will my rate go down too?
Yes, USAA can lower its rates at any time. You will not be penalized for this — your money stays in the account and earns whatever the new rate is. If you want to lock in a higher rate, you could consider a certificate of deposit (CD), which guarantees a fixed rate for a set period.
Can I move money between my USAA savings account and checking account?
Yes. You can transfer money between your USAA accounts online, by phone, or through the mobile app. Transfers between your own accounts are usually free and happen within one business day.