DEFINITION OF ‘MILITARY BANK’
A financial institution that offers services tailored to members of the military. Some banks focus the majority of their business on military service people, while others focus on the broader consumer marketplace but dedicate a segment of their business to members of the military. USAA, Navy Federal Credit Union, Air Force Federal Credit Union, Pentagon Federal Credit Union and Armed Forces Bank are examples of military banks. Some military banks require customers to have a military affiliation, either directly or through a family member, in order to use the bank’s services. Mainstream banks like U.S. Bank, Bank of America, Wells Fargo, Chase and many others also have services specifically geared toward military members.
INVESTOPEDIA EXPLAINS ‘MILITARY BANK’
Individuals who are serving in the military, along with their families, have unique banking needs that military banking services are designed to meet. Frequent travel and relocation make features like fully refundable out-of-network ATM fees and remote check deposit valuable. An account that has no foreign transaction fees helps a service member deployed abroad. Military banks often have branches and ATMs located at or near military bases. Military banks also offer specialized products that are only available to those who meet service requirements, such as VA mortgages. Some military banking benefits are available not only to current military members but also to former members, their spouses, their surviving spouses and/or children.
Military banks and regular banks offering military banking services should understand the provisions of the Servicemembers Civil Relief Act of 2003, which provides benefits such as a 6% cap on interest rates for debts incurred before entering the military, delayed legal proceedings for mortgage foreclosure while a soldier is deployed, the right to terminate an auto lease early upon deployment, and more.
Many benefits that military banks offer to military service members are also available to civilian consumers through regular banks. Members of the military should explore all the banking options available to them and not automatically assume that a military bank will best serve their needs or that it has the lowest fees and best interest rates.