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How to earn 5% or more on your tax refund now
Tax time is here, and with the majority of Americans expected to receive a tax refund, you could soon get a check for the money you’re owed by the IRS. While it’s tempting to think of your tax refund as extra spending money, it makes sense to put that cash to work instead.
And when you do, it’s important to use a savings vehicle with a meaningful rate of return. With today’s inflation rate hovering above 3%, you could be losing money if your interest returns are too low.
Given today’s inflationary environment, it’s a good idea to look for options that offer 5% or more in annual returns instead. But where can you find those opportunities?
Earn more on your tax refund with a high-yield savings account today.
How to earn 5% or more on your tax refund now
So how exactly can you earn 5% or more on your tax refund? Here are a few ways to do that:
Open a high-yield savings account
High-yield savings accounts work similarly to traditional savings accounts by offering a safe and accessible way to store your money. However, traditional savings accounts offer an average rate of 0.47% currently. But many high-yield savings accounts outpace inflation right now, and some offer APYs as high as 5.25% or more currently.
“There are several benefits to having a high-yield savings account (HYSA),” says Michael Broughton, founder and CEO of ALTRO, a credit-building app. “Unlike stocks or certificates of deposit, HYSAs are typically accessible almost immediately, allowing you to deposit and withdraw from a HYSA as needed.”
“Most importantly, HYSAs offer security,” says Broughton. “Unlike stocks or certificates of deposit, HYSAs are fully protected up to $250,000.”
However, it’s important to keep an eye on your returns and shop around regularly.
“Always check your accounts monthly or when your statements come in to make sure you are getting the top interest rate. Banks tend to change rates unannounced,” says Dawn-Marie Joseph, founder of Estate Planning & Preservation, a financial management firm.
So, it’s likely a good idea to compare today’s high-yield savings account rates, even if you already have a high-yield savings account.
Compare leading high-yield savings accounts now.
Invest in gold
As an investment vehicle, gold has a long history of hedging against the impact of inflation. So, buying some of this precious metal may be a good way to invest the money from your tax refund.
And, while the price of gold can fluctuate, especially over the shorter term, the value of gold tends to climb over the longer term and can easily surpass a 5% return rate. Over the past 20 years, gold’s price has grown by an average of 11.2% annually.
Open a short-term CD
A certificate of deposit (CD) is a deposit account that allows you to lock in your interest rate for months or years to come. When you open a CD, you agree to keep your money in the account for the full CD term in return for a fixed interest rate on your money. And, many of today’s leading short-term CDs (with 1-year terms or shorter) are offering rates above 5% right now.
You could also opt for a longer term on your CD, but you may get a lower rate than you would with a short-term CD in today’s unusual interest rate environment. But even at a slightly lower rate, longer-term CD accounts offer a safe way to earn a meaningful return on your tax refund if you don’t need access to the money in the near future.
Take advantage of today’s leading savings opportunities now.
The bottom line
If you’re getting a tax refund this year, you could use the money from that refund to improve your financial position by putting it to work for you. When you do, though, it’s important to earn returns that outpace today’s inflation rate. And, there are a few good options to do so, like opening a high-yield savings account, investing in gold or opening a CD now.
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Homicide investigation launched after missing soldier Sarah Roque found dead in trash bin at Army base in Missouri
A person of interest is in custody and a homicide investigation has been opened in connection with the death of a soldier stationed at Fort Leonard Wood in south-central Missouri, authorities said.
The body of Sgt. Sarah Roque, 23, of Ligonier, Indiana, was found Tuesday inside a trash bin. She had been reported missing a day earlier after she did not report for formation.
No cause of death was released but the Department of Army Criminal Investigation Division said Friday that her death is being investigated as a homicide.
Roque was a mine dog handler and a member of the 5th Engineer Battalion. She enlisted in 2020.
Maj. Gen. Christopher Beck, commanding general at Fort Leonard Wood, said Roque’s body was found in a dumpster on the base near the living quarters for single soldiers, CBS affiliate KRCG-TV reported.
Army officials did not release further information about the person in custody or a potential motive.
Roque’s military awards and decorations include the Army Commendation Medal, National Defense Service Medal, Good Conduct Medal and the Army Service Ribbon, the base said.
Maj. Gen. Beck said in a statement that Roque’s death “has caused a tremendous void” at the Army base.
“The Maneuver Support Center of Excellence and Fort Leonard Wood team is deeply saddened by this devastating loss, and we send our deepest condolences to the family, friends and fellow Soldiers of Sergeant Roque,” Beck said in a statement. “Sergeant Roque was a daughter, sister, friend and Soldier who chose to serve our country bravely and honorably.”
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Watch Live: Biden delivering apology in Arizona for Indian boarding school atrocities
President Biden is in Arizona on Friday to issue a formal presidential apology to Native American communities for the atrocities committed against Indigenous people during a 150-year era of forced federal Indian boarding schools. The president’s remarks are scheduled for 1:30 p.m. EDT.
The president chose to speak at the Gila River Indian Community in Arizona, although his apology is for all tribal communities that suffered. From 1819 through the 1970s, the federal government and religious institutions established boarding schools throughout the country to assimilate Alaska Native, American Indian and Native Hawaiian children into White American culture by forcibly removing them from their families, communities and belief systems. Many children who attended these boarding schools endured emotional and physical abuse, and hundreds of them died.
“I’m heading to do something that should have been done a long time ago,” Mr. Biden told reporters before boarding Marine One on Thursday afternoon. “Make a formal apology to the Indian nations for the way we treated their children for so many years.”
The Department of the Interior, run by the first Native American Cabinet secretary, Deb Haaland, conducted the first-ever federal investigation into the Indian federal boarding school era. It revealed that more than 500 American Indian, Alaska Native and Native Hawaiian children’s deaths occurred at 19 of the federal Indian boarding schools, and identified 53 marked and unmarked burial sites at school sites nationwide. The federal government often contracted with Presbyterian, Catholic and Episcopalian religious institutions to run the schools.
The report found that when children failed to meet standards or broke rules, they were subjected to corporal punishment, including “solitary confinement; flogging; withholding food; whipping; slapping; and cuffing.” Oftentimes, older children were forced to inflict punishment on their younger classmates.
Speaking with reporters aboard Air Force One en route to Arizona on Thursday, Haaland’s voice broke.
“For more than a century, tens of thousands of Indigenous children, as young as 4 years old, were taken from their families and communities and forced into boarding schools run by the U.S. government and religious institutions,” Haaland said. “This includes my own family. For decades, this terrible chapter was hidden from our history books. But now, our administration’s work will ensure that no one will ever forget.”
How to watch President Biden’s remarks at the Gila River Indian Community
- What: President Biden delivers an apology on behalf of the country for atrocities at federal Indian boarding schools.
- Date: Friday, Oct. 25, 2024
- Time: 1:30 p.m. EDT
- Location: Gila River Indian Community in Arizona
- Online stream: Live on CBS News in the player above and on your mobile or streaming device.