SDP Calculator

What SDP Is and Why 10% Is Locked In

The Savings Deposit Program (SDP) is a Department of Defense program codified in 10 U.S.C. § 1035 and operationalized in DoDFMR Volume 7A. Service members deployed to a designated combat zone, qualified hazardous duty area, or contingency operation can deposit up to $10,000 of their pay into SDP and earn 10% annual interest.

Two things make SDP unique in military finance:

• The rate is set by federal statute — the base 4% comes from 10 U.S.C. § 1035; the additional points (up to 6% currently) are set by DoD under the same authority. The consolidated 10% rate moves only when Congress or DoD changes it. It hasn't in decades.
• The risk is zero. The deposit is a U.S. government obligation; the only realistic risk is the same risk that applies to TSP G Fund and Treasury bonds (sovereign default), and that risk doesn't materially exist.

For comparison: a high-yield savings account in 2026 typically pays 4–5%; the S&P 500's long-run average is about 10% with significant volatility. SDP delivers the long-run equity return with zero risk and a guaranteed time horizon. This is why deployed service members who run the math typically max it out as soon as practical.

Who's Eligible — The Specifics

Eligibility comes from three coordinates: location, duration, and service status.

• Designated combat zone or qualified hazardous duty area. The Secretary of Defense designates which operations qualify; the IRS publishes the official list at irs.gov/individuals/military/combat-zones. The same list typically governs SDP eligibility plus the combat zone tax exclusion.
• 30 consecutive days minimum deployment. Shorter trips, even into a combat zone, don't qualify. The 30-day clock starts on arrival in the zone, not on order date.
• Active service status. Active duty, Reserve and Guard activated under Title 10 — all eligible. Drilling reservists, retirees, military dependents, and civilian DoD employees are not eligible. The calculator above gates on this with a self-attestation toggle.

If you're unsure whether your specific deployment qualifies, ask S-1 / personnel office before deploying or ask the Military Expert. Don't assume; the wrong assumption costs you the program.

Deposit Mechanics: How to Actually Get Money In

SDP isn't automatic. You have to actively set it up — usually within the first month of deployment when finance staff has capacity to process the paperwork.

1. Contact the deployed-station finance office. Within the first week if possible. They'll confirm eligibility, hand you the form (DD Form 2558 or local equivalent), and walk through deposit options.
2. Choose deposit method. Two options: lump sum (a check or wire from your existing savings) or recurring myPay allotment (typically monthly). For best return, lump-sum the full $10,000 as early as possible — every month earlier is another month at 10%. The calculator above models the lump-sum-day-1 case as the ceiling.
3. Verify the deposit appeared on your LES. SDP deposits show as a line item. Cross-check the next LES after deposit; if it's missing, follow up before another month passes.
4. Don't exceed the $10,000 cap. Cumulative principal across the deployment is capped. Finance won't accept overage; if you accidentally try to exceed via myPay allotment, the system rejects subsequent contributions and you lose interest time.

The 90-Day Grace Period

SDP earns 10% during deployment. It also earns 10% for 90 days after you return to your home station. This 90-day grace period is meaningful: the principal continues to accrue at 10% while you're back at your home station.

Two things to know:

• The grace period starts on your return-to-home-station date, not your DEROS or transition leave date. Confirm with finance which date applies to your specific situation.
• After day 90, interest stops accruing. The principal can sit there for up to a year (under DoDFMR 7A) but produces 0% from day 91 onward. The optimal play: withdraw at the end of the grace period.

Taxes: The Part Most Service Members Get Wrong

SDP interest is reported on a 1099-INT the year DFAS pays it — typically the calendar year after deployment ends, since the standard payout window is ~120 days post-deployment.

The combat-zone tax exclusion (CZTE) does cover SDP interest, but only the interest accrued while you're physically present in the combat zone. The 90-day post-exit grace-period interest is taxable at ordinary income rates because you're no longer in the qualifying zone. The calculator above splits these two windows in the tax-treatment expander so you can see what's excluded vs. taxable on your specific deposit.

State income tax depends on your state of legal residence. Some states (Texas, Florida, Tennessee, etc.) don't tax interest at all. Most states tax it as ordinary interest income. A few states have specific military exemptions that may apply — check with your SLR's revenue department or a Military OneSource tax consultant.

The practical implication: budget for the tax bill on the grace-window portion. Set aside ~25% of the grace-period interest if you don't want a surprise on the 1099-INT year. For state-residency complications — especially if your spouse is in a different SLR — use the Spouse Tax Wizard for the spouse-side residency walkthrough.

SDP vs TSP During Deployment: The Right Order

Many deployed service members ask: “Should I max SDP or prioritize TSP?” The honest answer is both, in this order:

1. TSP up to the BRS match. Contribute at least 5% of basic pay to capture the full 5% government match under the Blended Retirement System. This is free money and the highest-priority deployment financial move.
2. SDP to the $10,000 cap. Once the BRS match is captured, max SDP. The 10% guaranteed return outperforms most other risk-free options during the same window.
3. Roth TSP using tax-free combat pay. After SDP is maxed, channel additional savings to Roth TSP. Combat-zone pay is already federally tax-free; contributing it to Roth TSP creates effectively triple-tax-advantaged retirement money — tax-free in, tax-free growth, tax-free out at retirement. This combination is unique to deployment and worth the paperwork.
4. Beyond that: Roth IRA (if eligible), high-yield savings, or paying down high-interest debt. Each has a place; SDP + Roth TSP captures the structurally unique deployment benefits first.

Common Mistakes That Cost Real Money

• Waiting until month 3 to set up the deposit. Every month delayed is another month at 10% the principal doesn't earn. Set up SDP in week 1–2.
• Trying to fund the $10,000 from current deployment pay only. Combat pay plus base pay rarely covers a full deposit in the first month. Plan ahead — fund SDP from pre-deployment savings if possible. The calculator's lump-sum-day-1 model is the ceiling; monthly contributions earn meaningfully less because they accrue for fewer months.
• Forgetting to withdraw at end of grace period. Principal sits at 0% from day 91 forward. Calendar a reminder for day 88 to start the withdrawal paperwork.
• Underwithholding for the 1099-INT. The grace-window portion of SDP interest is federally taxable income. A maxed-out year can drive the tax bill up enough that the underpayment penalty kicks in. Adjust W-4 or pay estimated taxes if the projected balance is large.
• Conflating SDP interest with the combat zone tax exclusion blanket. CZTE covers your combat pay entirely, but it covers SDP interest only for the period you're actually in the zone. The 90-day grace window earns taxable interest at home. Two different windows, two different tax treatments — the calculator shows both.

How This Calculator Works

The calculator above takes your deposit amount and deployment duration and computes interest using the SDP rules: 10% annual rate per 10 U.S.C. § 1035, accrual through deployment plus the 90-day post-deployment grace period.

We model this with simple interest rather than DFAS's actual quarterly compounding. Simple interest understates the return, which is the right error direction for a planning tool: your actual payout is at least the figure shown, never less. The tradeoff is precision — if you want to the dollar, the DFAS official SDP calculator at dfas.mil/militarymembers/payentitlements/sdp applies the quarterly-compounding math against the same statutory rate.

The math also assumes your full deposit hits the SDP account on day 1 of deployment. Partial / staggered deposits earn less because they accrue for fewer months. The methodology expander in the calculator output shows the exact formula and walks through the lump-sum assumption explicitly.

The eligibility gate at Step 1 prevents the calculator from producing a number for users who legally can't enroll (drilling reservists, retirees, dependents). If the gate blocks you and your status is genuinely ambiguous (Title 10 vs Title 32 mobilization, orders pending), use Ask the Military Expert with your specific orders.

Related Garrison Ledger Tools

SDP is one piece of a deployment-finance plan. A few related tools:

• TSP Calculator — Model the BRS match and Roth TSP-during-deployment combination. Most service members run SDP + Roth TSP in parallel during a combat-zone deployment.
• Salary Calculator — Total compensation including deployment differentials and the tax effects of combat-zone pay.
• PCS Budget Planner — Many deployments coincide with a follow-on PCS; budget for the move costs and the post-deployment financial picture together.
• Ask the Military Expert — Five free questions a month with citations from 10 U.S.C. § 1035, DoDFMR, and IRS combat-zone publications. Useful for the deployment-specific edge cases this guide can't cover.
• Monthly Military Financial Briefing — One email a month covering deployment-finance moves and tax-season planning that intersects with combat-zone pay.

Sources

10 U.S.C. § 1035 — Savings Deposit Program statute · DoDFMR Volume 7A — Military Pay (SDP procedures) · IRS combat zone designations · DFAS SDP overview · TSP combat-zone contribution rules