Photo: Wikimedia Commons.

Editor's Note: The title of this article has been changed to reflect that these credit unions cater largely to the military, instead of that they only serve military clients.

Step one: You put your money in a bank.

Step two: You take your money out of the bank.

In between steps one and two, the bank pays you interest on your money.

Once upon a time, banking used to be just that simple. But with banks across the nation now paying an average of less than 0.1% in annual interest -- not nearly enough to keep up with inflation -- bank accounts seem like a bad bargain.

Lucky for you, you don't have to play that game anymore. Lucky for you, you're in the military.

Oh, I know -- "lucky" isn't always quite the right word to describe service in the U.S. military. But there are upsides to military service. And one of them is that you have the option of getting some of the best interest rates on your savings deposits, available anywhere in the country.

Credit unions versus banks
You see, banks may be exceedingly stingy in their interest offerings these days. (NYSE:RATE) says the average bank now pays just 0.09% -- to be clear, that's nine-hundredths of one penny for every dollar you deposit.

On the other hand, banks' thriftier cousins, the credit unions, are paying relatively decent rates. Although rates vary from institution to institution, your average credit union today pays about twice the interest rate that a bank will pay on any given savings product (savings account, certificate of deposit, money market, checking account, etc.). And because they're nonprofit, credit unions tend to charge lower rates on the products they sell, too, including mortgages, auto loans, and even credit cards. It's often easier to find a credit union offering free checking as well.

According to a recent poll run by, two of the top five best credit unions in the country are open only to current and former members of the military.

In order, here's how the numbers break down:

Polling Rank

Credit Union

Checking Account Interest Rate*


Navy Federal Credit Union

Up to 0.45% 


Pentagon Federal Credit Union

Up to 0.50% 


Alliant Credit Union 

Up to 0.65% 


NASA Federal Credit Union 



Suncoast Credit Union


*Rates are as quoted on the respective credit unions' websites as of Jan. 24, 2015.

The industry leader
Navy Federal Credit Union bills itself as "the world's largest credit union" -- and with more than $58 billion in assets and close to 5 million members, it's probably right about that. In the broadest general sense, NFCU is a credit union for active-duty military personnel, but it stretches that definition to the limit, welcoming both active-duty servicemembers and reservists, retired vets, their family members, and even civilian employees of the Department of Defense and its contractors.

In short, if there's wiggle room, they'll probably find a way to fit you in.

Members praise NFCU for its "great, low-or-no-fee savings and checking accounts," excellent customer service, impressive rates, and extensive network of 223 branches and 450 ATMs across the nation.

The runner-up
The Pentagon Federal Credit Union, or PenFed, similarly opens its doors to pretty much anyone and everyone who can claim a connection to the military. And if you have a buddy who wants to join who lacks military ties, PenFed offers a workaround to the general requirement: You can become a member with a one-time donation to either Voices for America's Troops or the National Military Family Association.

How low can you go? On loan rates, PenFed can go pretty low for its members. Source: PenFed.

Lifehacker thinks it's worth it: "Membership gets you access to incredible customer service, exceptionally low rates on auto and personal loans, mortgages, and credit cards that are considered some of the best rewards cards you can get."

Honorable mention
A third "military-only" institution almost made the cut in Lifehacker's report -- but not quite. As it turns out, the United Services Automobile Association, which started out as a purveyor of auto insurance to U.S. Army officers, isn't technically a credit union -- "they just operate and behave like one," explains Lifehacker. Importantly, though, USAA is like a credit union in that it pays its customers outstanding rates and customer service.

USAA doesn't just serve the military; its website helps recruit people to serve in the military. Source: USAA.

Like NFCU, USAA is open only to veterans and members of the armed services and their family members.