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USAA (United Services Automobile Association) is a Texas-based financial services firm that specializes in insurance and banking for military members and their families. Originally founded almost a century ago to help Army officers self-insure each other at a time when military members were viewed as high-risk, USAA has expanded its services over the years. Today, USAA has close to 11 million members.
If you're eligible for USAA membership, it's worthwhile to check into their banking and investment services and find out if you can save money by switching insurance providers.
Are You Eligible for Membership?
USAA financial and banking products require meeting certain eligibility guidelines. USAA membership is a privilege earned by those in uniform that can be handed down from generation to generation. Membership is open to:*
- Active, retired and honorably discharged officers and enlisted personnel of the United States military.
- Officer candidates in commissioning programs (including Academy programs, ROTC, OCS/OTS).
- Adult children of USAA members who have or had a USAA auto or property insurance policy.
- Widows, widowers and former spouses of USAA members who have or had a USAA auto or property insurance policy.
Insurance is what USAA is known for with rates that beat the competition 75% of the time. USAA offers insurance products to cover your everything from your home and car to your business, motorcycle, and health.
USAA auto insurance comes with award-winning customer service and a host of discounts. Along with standard discounts for defensive driving, good driving records, and having multiple covered vehicles, USAA also offers unique membership savings.
If your parents also had or have USAA auto insurance, you can save up to 10%. Military members can save up to 15% on comprehensive auto coverage when their vehicle is garaged on base.
As long as you can drive and meet basic requirements, you will have guaranteed renewal of your auto insurance with USAA.
AUTO INSURANCE FROM USAA
3 out of 4 times USAA Auto Insurance rates beat the competition. And members who switch to USAA Auto Insurance save an average of over $400 a year.
Homeowners insurance is usually required when you get a mortgage. Even when it's not, it's a good idea to cover your home against fire, vandalism, theft, and weather. Unlike most insurance companies, USAA homeowners insurance offers full replacement coverage. This means that if your home is destroyed or severely damaged, your policy will help you rebuild based on current costs.
A USAA home insurance policy also covers the items in your home, providing you with 75% of the insured value of your house to replace your belongings at market value. This means if your home is insured for $150,000, USAA will pay up to $112,500 to replace damaged items.
HOMEOWNERS INSURANCE FROM USAA
There's no place like home. Make sure it's protected by an organization counted upon by generations of members.
If you rent, chances are your landlord's insurance policy will not cover you if your belongings are damaged or you're forced to relocate after a flood or theft. Renters insurance costs as little as $12 per month to make sure your belongings are protected.
USAA offers replacement cost coverage, which means your stolen or damaged items will be repaired or replaced with items that are similar in value and quality. This is a benefit most insurance companies do not include. USAA renters insurance also includes earthquake coverage, flood coverage, the cost of moving and storage, and ID theft coverage. Because these coverages are included in your policy, you don't need to pay extra for endorsements.
Other Insurance Products
USAA also offers:
- Flood insurance
- Life insurance
- Umbrella insurance
- Personal property insurance
- Motorcycle and RV insurance
- Small business insurance
USAA is an online-only bank, so you won't have a physical bank location. If you can get past that, USAA may just offer enough to convince you to switch banks.
Free Checking Accounts
If you're eligible to become a USAA member, you can open a checking account with no monthly fee.
A USAA Classic Checking account comes with some nifty perks:
- No monthly fees!
- A cash back debit card (explained below).
- Free checks for life.
- Use 60,000 preferred ATMs for free.
- Transfer money to any U.S. bank without a fee.
- Mobile check deposits.
- USAA app to manage your USAA accounts.
- The ability to host all financial accounts with a single bank, from your checking account to your credit cards, homeowners insurance, car insurance, and brokerage account.
Cash Back Debit Card Benefits
Every time you run a transaction as credit instead of debit, your USAA debit card earns 1 point for every $2 spent. This isn't much compared to a rewards credit card, but remember that it's just a debit card. It's very hard to find a debit card that offers rewards.
USAA also makes its savings accounts hassle-free with no minimum balance and no monthly fees. You can open a USAA savings account with $25 and earn an annual interest rate of 0.05% to 0.15%. A USAA Performance First savings account requires an initial balance of $10,000 and earns between 0.05% and 0.30%.
BANK WITH USAA
A FREE checking or savings account with USAA is not just a financial product. It is a membership with an institution dedicated to serving those who serve our country.
Personal and Auto Loans
As a USAA member, you can get personal and auto loans with no hidden fees and among the lowest rates available. USAA loans are notoriously difficult to get, but you can get a loan discount for buying a new vehicle if you're eligible.
As of July 2015, USAA offers 36-month new car loans with an APR of 1.49% or a rate of just 0.74% with the USAA Car Buying Service Discount. They also offer loans on used cars as well as car loan refinance loans.
You can get a discounted rate on your loan by purchasing a car from a dealer through the USAA Car Buying Service. Start your search for a car online, then choose up to 3 USAA certified dealers to do a test drive. When you're ready to make the deal, give the dealer the USAA Savings Certificate to get the lower rate. The average USAA member saves $3,485 off MSRP with this discount.
USAA also offers personal loans that can be used for debt consolidation, home improvement, or just a trip you've been dreaming about. You can apply online with no application fees and get an instant decision with the funds available as soon as the next day.
While it's been long known for its insurance products, USAA began offering brokerage services back in the 1980s. Unlike its insurance policies and banking services, both non-military and military families can open a brokerage account with USAA.
With a USAA brokerage account, you can buy and sell stocks, bonds, ETFs, and funds online. USAA's brokerage services are among the best in terms of customer service with one of the fastest customer service response times in the industry.
By default, all brokerage clients have a USAA Gold Plan. If you have at least $5,000 to invest, you can sign up for an Asset Management Account which gives you some brokerage and banking services free of charge. If you're a very active trader, you can get discount commissions with the Platinum Plan.
USAA has fair, but not rock bottom, pricing for trading stocks and options,. On the plus side, they don't charge for after-hours trading, account maintenance, account transfers, or penny stocks. Commissions per trade are as low as $5.95 (and are up to $8.95). Plus, USAA has a lower-than-average account minimum.
If you are looking to open an IRA (Individual Retirement Account) or other retirement account, or rollover your current IRA, USAA offers several options. With your account, you can invest in stocks, bonds, annuities, and USAA mutual funds, CDs (Certificates of Deposit), and managed portfolios.
The types of retirement accounts available include:
- Traditional IRA
- Roth IRA
- SEP (Self-emlpoyed) IRA
- SIMPLE IRA (which offers smaller employers a simpler alternative to 401k plans)
INVEST WITH USAA
Get 50 FREE trades for new brokerage accounts. And take advantage of USAA's easy to manage tools made for every investor.
USAA also offers youth banking, car buying services, certificates of deposit (CD), credit cards, and college savings accounts. If you're interested in credit cards, check out our in-depth review of USAA credit cards.