While filing your taxes can be tedious, getting a tax refund is actually kind of exciting. According to the IRS, the average tax refund in 2022 was over $3,300 dollars. There’s a lot you can do with that kind of money, and if you know how to use a tax refund wisely, you can use it to improve your financial security and even reach an important financial goal.
You’ll also need to think about where to store your tax refund money while you’re figuring out the best way to use it. There’s nothing wrong with putting your money in a traditional savings account, but you have the required $2,000 for an initial deposit, you might want to consider putting it in a money market account.
Why is a money market account the best place to keep tax refund money?
Money Market Accounts Have a Higher Interest Rate
It’s common knowledge that a savings account will pay you interest on the money you keep there. However, a money market account is a high-yield savings account, which means it has a higher interest rate than a traditional savings account. While you won’t get rich off the interest payments, you will get a better return, so you’ll have more money to put toward goals like:
- an emergency fund
- down payment on a car
- home remodeling
- a summer vacation
Get started setting financial goals today!
Money Market Accounts let you Easily Access Your Money
Of course, a money market account isn’t the only way to have your money earn more interest. You can also put your money in an investment account, like a certificate of deposit, and potentially have your money earn more. There’s a trade-off, though, and it’s that you won’t be able to easily access your money.
When you put your money in a money market account, though, you can withdraw your money any time you like. The only thing you have to keep track of is whether you’ll still have the minimum required amount in your account after withdrawing money.
A Money Market Account is Easy to Open
If you're wondering "How do I open a money market account?" you'll be happy to learn it's pretty easy. If you’re a member of First Alliance Credit Union, it’s as simple as clicking a link in our online banking platform. If you’re not a member of First Alliance Credit Union, you’ll have to become a member, which you can do if you live, work or worship in our membership area and have $5 available.
A Money Market Account is Secure
Unlike many investment accounts, a money market account is secure. You never have to worry about losing the funds you put in your money market account, and thanks to the NCUA and FDIC, your money market account is insured up to $250,000. Quite frankly, if you have over that much in your money market account, you have other, more fun issues to deal with.
Got questions about money market accounts? Ask us!
Open a Money Market Account at First Alliance Credit Union
A money market account is a great place to keep your tax refund. If you have enough for the initial deposit, it’s easy to open an account. Once you do, you can take advantage of the higher interest rate and keep your money in there as long as you want. You also won’t have to jump through any hoops if you want to withdraw it.
If you’d like to take advantage of everything a money market account has to offer, become a member of First Alliance Credit Union and open an account today. It’s easy to do, and you’ll be able to keep track of your money thanks to our online banking platform and mobile app.