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 Navy:
Investment Options
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Don't confuse Savings Deposit Program (SDP) with the Thrift Savings Plan (TSP). TSP is available to everyone in the military. However, the Savings Deposit Program is available only to those serving in designated combat zones.
Military members deployed in combat zones, qualified hazardous duty areas, or certain contingency operations may be eligible to deposit all or part of their unallotted pay into a DOD savings account up to $10,000 during a single deployment. Interest accrues on the account at an annual rate of 10% (per Executive Order 11298) and compounds quarterly.
Although federal income earned in hazardous duty zones is tax-free, interest accrued on earnings deposited into the SDP is taxable. Members can designate the allotment amount in five-dollar increments and deposits may be discontinued at any time. Funds can be left in an SDP account indefinitely, however, the account will stop accruing interest 90 days after a member returns from the combat zone. Generally, withdrawals may only be made upon termination of eligibility for the program.
The savings program is not new -- it provided Vietnam veterans a way to earn extra money while on their Southeast Asia tours. DOD reopened the program to Desert Storm troops in 1991, and extended it to troops in Bosnia in 1996. The program was further expanded in 1997, 2001, and 2003.
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