When choosing to split and save a portion of your refund using IRS Form 8888, you have a number of savings options. Here you can learn more about a number of those options.
Saving with any of the following types of accounts will mean you are eligible for entry into SaveYourRefund:
- You may direct part of your refund into a savings account at any bank, credit union, or other financial institution.
- Savings accounts are typically used for funds that you wish to remain easily available in case of need in the short term. They are safe and low-risk, with small gains in the form of accrued interest. Deposits are insured by the federal government.
- This option is great if you already have a savings account.
U.S. Savings Bond
- You can choose to purchase U.S. Series I Savings Bonds using a part of your refund. Savings bonds have no fees, have safeguards to protect from changes in the economy, and start at $50. They are mailed to buyers after tax returns are processed.
- Savings bonds are also giftable! You can buy them as a gift for a loved one simply by entering their name on Form 8888.
- This a great a great choice if you don’t have a savings account or the account information, or if you want to give the gift of savings to a family member.
myRA or Individual Retirement Account (IRA)
- MyRA is a government sponsored, no-fee “starter” retirement account for those who may not have access to retirement benefits through an employer. You can use your refund to fund your myRA account if you have previously opened one. Additional resources about myRA can be found here.
- A refund can also be used to fund other types of IRAs.
- This is a good option if you want to shore up your retirement account.
- A 529 account is designed to make it easier for people to save for a child’s education. Funds are invested and the accounts have special tax advantages: earnings are not subject to tax as long as they are used to pay for qualifying educational expenses.
- A tax refund may be used to contribute to an existing 529 account.
- If you have already opened a 529 for your child and wish to add to your savings for their education, this is a good option.
Certificate of deposit (CD)
- A certificate of deposit (CD) is a savings vehicle offered by a financial institution. Much like savings accounts, funds are federally insured. CDs typically have withdrawal restrictions–meaning savers cannot access the money as easily–but may also offer slightly higher interest rates compared to traditional savings accounts.
- This option is worth consideration if you want to lock away your savings for future use.
- A prepaid card (or prepaid debit card) is a product that someone can “load” money onto and then spend directly from the card. It is not connected to a bank account. Many prepaid cards offer a saving “pocket” that allows them to set aside funds they do not wish to spend immediately.
- Savers can choose to direct a portion of their tax refund onto a prepaid card.
- If you do not have a savings account, this may be a good option. It is important to review the costs and fees associated with prepaid cards to ensure they are the right choice
Another great resource for tax filers is America Saves, a campaign dedicated to helping individuals save money, reduce debt, and build wealth. Savers can take the America Saves pledge and receives tips and reminders to help them save throughout the year and during America Saves Week.
Summary of Savings Options for SaveYourRefund Eligibility