Now that my husband has been home a while, we've been thinking about withdrawing the money that he saved in his Savings Deposit Program account. We want to make sure that we leave it in long enough to get all the possible interest, but not leave it in much longer after that time.
You'd think that it would be easy enough to figure out when that magic day is, but I can't. I've read, and I've thought, and I can't tell for sure. There are two things that confuse me:
- Interest is compounded quarterly. Does that mean that it is only credited quarterly? Do we need to wait until the end of a quarter to get that last bit of interest credited? Is it a calendar quarter, or some other quarter?
- Interest stops accruing on the 1st day of the month in which you have been out of the eligible combat zone for 90 days. The way I read that, if my husband left on February 5th, then interest would stop accruing on May 1. (Because on May 6, he would have been out of the combat zone for 9o days.) Is that right? Oh, I found the answer: If the 90th day falls on any day other than the last day of the month, then interest will stop accruing on the last day of the preceding month.
I would check on his SDP account statement, but that isn't much help. It shows the principal deposits with the dates, and it show the amount of the last credited interest without the date, but there is no ledger type accounting that would help me to understand.
As we juggle money from one place to another during this moving process, it would be nice to better understand when we should request a withdrawal from SDP. It should not be this complicated.
Let me tell you how I finally figured out that his account had already been credited all its interest. (This worked for us because he made one lump deposit. It would be much harder to figure if you made several smaller deposits, but it could still be done.) I took the total balance and then subtracted the amount of the deposits, leaving me with the total amount of interest earned. I figured out how much interest was earned each month (principal balance times .8333 percent) and then figured out how many months of interest had been earned (total interest divided by monthly interest). I discovered that he had earned 14 months interest. He was deployed for 12 months, plus the 90 days of extra interest, minus the one month at the beginning when he wasn't yet eligible to participate. That equals 14 months, so he has already earned the maximum possible interest.
Once you make the decision to withdraw your SDP funds, the actual form (found on MyPay) is easy and once submitted, the confirmation page states that the direct transfer will occur in approximately 7 business days.
I love that SDP, but they sure could make it a little easier to understand.
