Savings Deposit Program — DoD-administered savings account paying 10% guaranteed annual interest on deposits up to $10,000 for deployed members. Authority: 10 USC § 1035; DoD FMR Vol 5 Ch 34. Compounds quarterly (~10.38% APY).

Active duty or Reservists on active orders in a designated combat zone, with 30+ consecutive days in CZ OR 1 day in each of 3 consecutive months, receiving HFP/IDP. Sign up through in-theater finance office.

$10,000 cumulative balance. Deposit via allotment ($500-$2,000/mo typical), check, or cash. Hit the cap fast to maximize interest — money sitting at $10k longer earns more.

Yes — taxable as ordinary income on Form 1099-INT. CZTE does NOT apply to SDP interest, only to basic pay/HFP/bonuses.

SDP Calculator 2026 — 10% Savings Deposit Program

What SDP is and why it exists

The Savings Deposit Program (SDP) is a DoD-administered savings account authorized by 10 U.S.C. § 1035 that pays 10% guaranteed annual interest on deposits up to $10,000 for service members deployed to a designated combat zone. It was created in 1990 to encourage deployed members to save rather than spend, and to provide a concrete financial benefit beyond combat zone tax exclusion.

The 10% rate is set by statute and has not changed since 1990. With private-market savings rates rarely exceeding 5% and even the volatile S&P 500 averaging "only" 10% over the long run, SDP is among the highest guaranteed returns available anywhere in the U.S. financial system.

Eligibility

To be eligible to participate in SDP, you must:

Be in a designated combat zone (CZTE area per 26 U.S.C. § 112 EO designations — Afghanistan, Iraq, Kuwait, Saudi Arabia, etc.)
Have served 30 consecutive days in the CZ OR at least 1 day in each of 3 consecutive months
Be receiving Hostile Fire Pay or Imminent Danger Pay ($225/month)
Be an active-duty member OR Reservist on active orders in the CZ

Sign up through your finance office in-theater (typically during in-processing). You can begin depositing after the 30-day eligibility period; deposits made before then are returned.

Mechanics

Deposit method: Allotment from your military pay (typically $500-$2,000/month), check, or cash.
Maximum deposit: $10,000 cumulative balance. Once you hit $10k, additional deposits are returned.
Interest rate: 10% APR, compounded quarterly (~10.38% APY effective).
Interest accrual window: From date of each deposit through 90 days AFTER you leave the combat zone. After 90 days post-redeployment, the account closes and balance + interest is paid out.
Withdrawals: Generally only allowed after redeployment via written request to DFAS. Limited emergency withdrawal exceptions while still deployed.
Tax: Interest is taxable as ordinary income on Form 1099-INT. CZTE does NOT apply to SDP interest — only basic pay and re-enlistment bonuses get CZTE.

Best practice — fill the $10k cap fast

Maximize SDP by hitting the $10,000 cap as quickly as possible. The longer your $10k sits earning 10%, the more total interest you accumulate.

Example A — slow fill: Deposit $500/month for 12 months. You hit $6,000 deposited at month 12, then add $500 in month 12 to reach $6,500 + interest. Total interest after 12-month deployment + 90 days: roughly $300.

Example B — front-load: Deposit $5,000 month 1, then $1,000/month thereafter. Hit $10,000 cap by month 6. The full $10k earns 10% from month 6 onward. Total interest after 12-month deployment + 90 days: roughly $850-$900.

Where to get the front-load money: Pre-deployment savings, signing bonus, tax refund, or CZTE-tax-free basic pay during early deployment months.

SDP + TSP + Roth IRA stacking strategy

SDP, TSP, and Roth IRA work together. The optimal deployed-savings hierarchy for most service members:

Max SDP first ($10,000 cap). Guaranteed 10% is unbeatable. Use early CZ pay (tax-free) to fund.
Max Roth TSP next ($23,000 IRS limit + $69,000 annual addition limit in CZ). Roth contributions from CZ pay are double-excluded: never taxed in, never taxed out.
Max Roth IRA next ($7,000 IRS limit). Funded with already-untaxed CZ pay; grows tax-free.
Then taxable brokerage or HYSA. After all tax-advantaged accounts are maxed, additional savings go to taxable.

A 12-month deployment, fully optimized, can net $80,000+ of new savings across these vehicles — much of it tax-free forever (TSP Roth) or tax-free for years (SDP interest taxable but tax bracket lower).

When SDP is NOT the right move

SDP is almost always good, but consider alternatives if:

You have high-interest debt (credit cards 18-22% APR) — pay that off first; the SCRA 6% cap may apply to some pre-service debt
You haven't maxed your Roth TSP/IRA contributions yet — those are higher long-term value
Your emergency fund is below 3-6 months expenses — keep some liquidity outside SDP since withdrawals are restricted
You need quick access to cash — SDP locks money until 90 days post-redeployment

For most deployed members with already-good financial hygiene (debt-free, fully funded retirement accounts), SDP is the single highest-return savings vehicle available.

SDP — frequently asked questions

What is the Savings Deposit Program (SDP)?

SDP is a DoD-administered savings account authorized by 10 U.S.C. § 1035 that pays 10% guaranteed annual interest on deposits up to $10,000 for service members deployed in a designated combat zone. Interest compounds quarterly (~10.38% APY effective). Created in 1990; rate set by statute. Among the highest guaranteed returns in the U.S. financial system.

Who is eligible for SDP?

Active-duty members and Reservists on active orders who are (1) serving in a designated combat zone (CZTE area), (2) have served 30 consecutive days in the CZ OR 1 day in each of 3 consecutive months, and (3) are receiving Hostile Fire Pay or Imminent Danger Pay. Sign up through finance office in-theater during in-processing.

How much can I deposit in SDP?

Cumulative balance is capped at $10,000. Once you hit $10k, additional deposits are returned. You can deposit via allotment from military pay (typical $500-$2,000/month), check, or cash. The 30-day eligibility period must pass before deposits are accepted.

How long does interest accrue?

From the date of each deposit through 90 days AFTER you leave the combat zone. After 90 days post-redeployment, the account closes and balance + interest is paid out. Maximize SDP by hitting the $10k cap as quickly as possible to extend the period of full $10k earning 10%.

Is SDP interest taxable?

Yes — interest is taxable as ordinary income, reported on Form 1099-INT. The Combat Zone Tax Exclusion (CZTE) does NOT apply to SDP interest. Only basic pay, HFP, and re-enlistment bonuses get CZTE — SDP interest is taxed at your marginal rate.

Can I withdraw from SDP while still deployed?

Generally no — withdrawals are restricted to after redeployment via written request to DFAS. Limited emergency withdrawal exceptions exist (e.g., severe family hardship verified by Red Cross). Keep your emergency fund OUTSIDE SDP for normal liquidity needs.

How does SDP compare to Roth TSP for deployed members?

Both are valuable. SDP guarantees 10% on $10k cap = up to ~$1,000/year of interest. Roth TSP in a CZ is double-excluded: never taxed in (CZTE), never taxed out (Roth). Annual TSP IRS limit ($23,000) plus the annual addition limit ($69,000 in CZ) allows much more total than SDP. Best strategy: max SDP FIRST (front-load to $10k), then max Roth TSP, then Roth IRA, then taxable.

SDP Calculator