The United Services Automobile Association, better known to most as USAA, is a financial institution founded in 1922. Headquartered in San Antonio, Texas, USAA began when a group of 25 military officers decided to start their own company after not being able to get car insurance due military people being labeled as a high-risk group by the insurance industry. Today, that company has more than 12 million military-affiliated customers.
USAA has a reputation for being a military-friendly bank and there’s a good reason for that. USAA serves customers who have a military connection:
- Active duty servicemembers
- Veterans with honorable discharges
- Cadets
- Midshipmen
- Military spouses
- Dependents
- Parents
- Parents-in-law
- Certain children of former USAA members
You must have a military connection to be a USAA customer, though you don’t have to be in the uniformed services yourself. Federal special agents, foreign service officers or specialists are also encouraged to contact USAA to determine eligibility for services, accounts, loans, etc.
Some family members (such as parents-in-law) may qualify but further development may be needed in some cases.
USAA: Member-Owned
One of the perks of joining USAA is being part of a member-owned company that has an interest in paying dividends to its customers under certain circumstances. One excellent example of this? USAA partially refunded auto insurance payments to its members during the COVID-19 lockdowns in 2020.
The official site reports some $800 million in auto insurance funds returned to auto insurance policy holders–inspired by “data showing members are driving less due to stay-at-home and shelter-in-place guidance across the country” during the worst of the pandemic in 2020.
USAA Services
USAA members are offered financial services including:
- Banking (including VA home loans)
- Investments
- Insurance
- Advice and financial tools
Quick Loans Pros & Cons
Pros
- Expert in VA loans plus other perks like a first-time homebuyer program and vacation and investment property financing
- Unlike many lenders, USAA manages the loans it originates so members can enjoy the same great service
- Accessible mobile app with popular features
- No minimum balance requirement or monthly fee for the savings account
- Generous free access to 60,000 ATMs plus minimal out-of-network ATM fees
- No monthly fee checking and savings accounts
Cons
- Limited brick-and-mortar locations
- Difficult to join without military affiliation
- Only five branches in the U.S.
- Rates and fees are competitive but generally not lower than other major lenders
USAA Banking Options
Banking services include the usual personal savings and checking accounts, youth banking, car loans, personal loans, and more. Banking services at USAA also include VA home loans and related options.
If you are not eligible for a VA mortgage because you don’t have enough time in service or because you have already used your VA home loan entitlement and have not had it restored yet (after paying off the original loan or selling the home), there are other USAA options including both FHA loans and First-Time Home Buyer mortgages.
VA home loan applicants will likely appreciate USAA’s range of financial services that include, but certainly do not limit the borrower to VA mortgages. And because VA loan programs do not permit the purchase of vacation homes or other non-primary residences, the USAA banking options also include options to apply for a non-VA loan to buy such property.
USAA has perks for new recruits who sign up for checking or savings accounts. Their program includes a waiver of the initial $25 deposit required to open an account (no minimum balances are required after doing so) and a benefit unique to new recruits.
What is that benefit? When USAA is notified by the Defense Finance and Accounting Service that military paychecks are coming, the bank makes those funds available a day early for recruits with USAA accounts.
All applicants are also eligible for USAA “classic” checking with no monthly fee or minimum balances.
USAA Insurance
USAA’s insurance options include auto insurance, renter’s insurance, and life insurance. But the company also offers:
- Homeowner Insurance
- Rental Property Insurance
- Valuable Personal Property Insurance
- Condo Insurance
- Flood Insurance
- Umbrella Insurance
- Motorcycle, RV & Boat Insurance
- Small Business Insurance
But there are also medical coverages; USAA provides help with Dental, Vision, and Medicare solutions. Some customers don’t need USAA Medicare options, the official site reminds, “TRICARE For Life is TRICARE’S version of a Medicare Supplement insurance program. If you’re eligible for TRICARE for Life, you don’t need a Medicare supplement or prescription drug plan.” But the options are there for those who DO need such coverage.
USAA Investment Services
Members have options including mutual funds, stock investments, and can take advantage of USAA-managed portfolios. The company also invites its members to explore their options with exchange-traded funds (ETF) which are described as “a diversified collection of securities.”
This program has similar features to stock market trading and with all USAA investment options, consumers should know there is a risk of loss of your initial investment.
Investing is not a risk-free option in these areas, but USAA reps can explain the investments you are most interested in. Don’t invest without carefully reading all applicable paperwork, agreements, and procedures.
Investing has many different facets. Those with an eye on saving money for higher education for themselves, a spouse, or a dependent should consider the USAA 529 Plan.
The USAA official site describes this program as “more than just a college savings plan.” It is actually considered an investment account “that gives you tax benefits while saving for education” according to the official site. 529 Plans can be arranged for yourself or a beneficiary.
Retirement Planning
USAA’s retirement services include IRAs, trust services, and wealth management, but it also offers something some military applicants don’t think about..at first. Long-Term Care insurance or LTC.
Described as “the assistance you may need when you can no longer perform basic, day-to-day tasks” even when medical supervision isn’t required, this is a service that requires applicants to talk to a USAA financial advisor to determine the level and duration of coverage needed.
How To Sign Up For USAA Accounts And Services
Visit the USAA official site to sign up. You will be required to determine your eligibility with an online questionnaire. Once your eligibility is established, you will be prompted to set up your account with your login, password, and other details.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
