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There is a 2-year grace period from the date of your first retirement coverage to pay a military deposit in full and not be charged any interest.

Making a deposit for post 1956 military service allows you to receive permanent credit for military service under your Federal civilian retirement system, and the military service remains creditable for Social Security purposes. Making a deposit early helps to avoid the accrual of additional interest.

Subject: Calendar Year 2022 Interest Rate The U.S. Treasury has announced the calendar year 2022 interest rate is 1.3750 percent. This rate is applicable to “post-1956” military service credit accounts.

Payment can be made online via Pay.gov using checking and saving (ACH) account information, bank branded debit card, or PayPal (linked to checking and saving account only -ACH). Additional instruction on how to process payments is available through the DFAS Military Service Deposit (MSD) Payment eTutorial on YouTube.

Known as the “catch 62,” if these employees are eligible for a social security benefit at age 62 or older, and no deposit has been made for military time, then roughly 2% is subtracted from their CSRS annuity for each year of military service.

Your retirement benefit is determined by your years of service. It's calculated at 2.5% times your highest 36 months of basic pay.

A deposit is made for Post-56 military service. How Much Does The Military Deposit Cost? For periods of active duty service prior to 1999, your deposit will equal 3% of your base pay earned during the Post-56 military service.

How Much is the Deposit? CSRS - The amount of deposit is equal to 7% of military base pay earned, plus accrued interest.