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SDP – a guaranteed 10% on up to $10k!

Probably the best guaranteed investment one can make is a little-known program for military servicemembers called the Savings Deposit Program (SDP). It offers a 10% annual return on up to $10,000 (ie $1000 profit per year). I took advantage of this program the entire time I was in Bahrain. However, there are some major caveats:

-you must be serving in an SDP-eligible combat zone

-you must be deployed for a minimum of 30 consecutive days or at least one day in each of three consecutive months

-you must be receiving Hostile Fire/Imminent Danger Pay (it will show up on your leave and earnings statement)


You might be asking, where is an SDP-eligible combat zone? It actually encompasses most of the Middle East and Central Asia, to include:

  • Effective 1 February 2003, members serving in Operation Enduring Freedom\Iraqi Freedom to include the total land area of the Arabian Peninsula to include the Persian Gulf (as defined by the Arabian Peninsula, the Strait of Hormuz, and that part of the Gulf of Oman which lies north of 25 degrees north latitude and 057-30 degrees east longitude), Bahrain, Iraq, Iran, Israel, Jordan, Kyrgyzstan, Kuwait, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Tajikistan, Turkey, United Arab Emirates, Uzbekistan, and Yemen.

That’s 17 countries, and quite a large land area. Most of my friends in the services have been stationed or deployed to these areas, and so could reap this amazing financial benefit.


This benefit can start on the 31st day, or the 3rd day in 3 consecutive months, after arriving in theater. Go to your local Navy PSD or finance battalion and ask to begin depositing money to the SDP. You can only deposit an amount less than or equal to your monthly pay + allowances, so in my case it took two months to reach the $10,000 limit. You can pay by check, money order, cash, or allotment (but not credit card).


Check your SDP amount on a quarterly basis, because you can withdraw on a quarterly basis anything over $10k (anything over that amount accrues no interest, so there’s no benefit to keeping it in). It accrues quarterly.


SDP interest will continue to accrue for up to 90 days after leaving an SDP-eligible combat zone, which is very cool – meaning you can continue to make $250 in interest even after you’ve left. Unfortunately, the IRS considers SDP interest unearned income the interest is taxable even though the soldier is located in a combat zone tax exempt (CZTE) area (I will be going over tax benefits of the military member in a future post).


If you get back from a combat zone, and forget to withdraw your original SDP principal and/or interest, it will be automatically deposited to you 120 days after leaving. You cannot withdraw your original principal $10k while in the combat zone unless approved by your CO. If you want more nitty-gritty details, check out this post. This is one of the coolest benefits of being deployed or stationed in the Middle East, and one I definitely took advantage of.


If you have any questions about it, please feel free to email me at sheepae@gmail.com.

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