As IRS is now processing tax return filings, a large number of Americans might discover they are entitled to a notable tax refund. Following last year's tax filing deadline of April 15, the average 2024 refund was approximately $2,850. If you're not in urgent need of these funds, you can leverage the current competitive interest rates to inflate the value of your refund for a more profitable future.
There are several secure and straightforward methods to bolster your refund, such as high-yield savings accounts, money market accounts, and certificate of deposit (CD) accounts.
High-yield savings accounts are one of the easiest ways to get excellent returns on your cash. Top-rated accounts currently offer a 4.75% APY, significantly higher than big banks and the national average of 0.41%. These accounts provide flexibility, letting you deposit and withdraw freely without time constraints.
However, the rates are susceptible to changes and are not guaranteed. A similar option with the added benefit of check-writing is a money market account. The top-rated nationwide money market account also offers 4.75% currently.
All institutions featuring these accounts are federally insured by either the FDIC for banks or the NCUA for credit unions, offering protection for your deposits up to $250,000 per individual per institution.
For those who can lock away some or all of their refund for an extended period, a CD account offers a higher guaranteed yield until its maturity date. Current CD rates are high and locking in now ensures these rates are secured despite possible future changes. Top CD rates currently range between mid to high 4%, with one 8-month CD offering 5.50% until Jan. 31.
However, withdrawing from a CD account prior to maturity may incur penalties, therefore the term choice should be considered carefully. CDs not only increase your refund but also discourage impulsive spending due to the potential penalty on early withdrawals.
The Federal Reserve is anticipated to make modest rate cuts in the coming year, with the exact timing and scale being uncertain due to the potential impact of newly implemented policies by the Trump administration.
To ensure access to the best rates, our rankings of high-rate deposit options are updated daily, including high-yield savings and money market accounts, and various CD accounts.
These rankings are based on national averages which often fall significantly below our top rates. Banks and credit unions fitting our criteria, which include federal insurance and an initial deposit not exceeding $25,000, are tracked. National availability, in at least 40 states for banks, and reasonable eligibility criteria for credit unions are prerequisites.