Now that you have submitted your tax return, you may be expecting a refund. A tax refund can be a chance to improve your finances and prepare for your future. If you receive a tax refund, there are a few different options for how you can spend, save or invest your money. With the abundance of services and options available, you may be able to start investing at a low cost and reap the rewards of letting your money grow in a certificate.
What Is a Tax Refund?
If you are employed, your employer will typically withhold a certain amount from your paycheck and remit this money to the IRS. During tax season, you can compare the amount you owed to the IRS with the amount that was sent to the IRS.
After deductions and credits, a tax refund is the amount of money that was overpaid to the government and is now owed to you, the taxpayer. Essentially, you are receiving your own money back. If you want to know how much you can expect to receive in a tax refund, you can use a free online tax calculator to estimate your potential refund.
What Is a Certificate?
A certificate is a savings tool you can use to grow your money. You can securely build your savings by earning interest based on the annual percentage yield (APY) when you open a certificate with us at Members 1st. This means you can use a certificate to earn additional money for depositing your money with us.
How much you earn from a certificate may vary depending on:
Rate
Term
Amount of initial deposit
Typically, the longer your term length, the higher your dividend rate. So, the longer you commit your funds to a certificate, the more you can earn. Certificates offer a range of options for the APY, term and dividend rate, so you can find the certificate that is best suited to your financial situation.
4 Reasons to Invest Your Tax Refund
Using your tax refund for a luxurious vacation or a major shopping spree can be tempting, but there are several benefits to investing your tax refund instead, such as:
Gain peace of mind: When you know you have set aside the money you earned, you will gain confidence from making a solid financial decision and experience the peace of mind that comes with protecting yourself for the future.
Prepare for unexpected expenses: Few things will make you feel more secure than being prepared for emergencies and major unexpected expenses. When you use your tax refund to prepare for unplanned costs, you will be able to cover that major car repair or continue paying your bills after a job loss.
Meet short-term and long-term goals: Investing your tax refund can help you achieve your short-term and long-term financial goals. For example, you can put your refund toward a short-term goal like saving for your next car or paying off a credit card balance. Alternatively, you can put your refund toward a long-term goal, like saving for a down payment on a home.
Enjoy compounding dividends: The key to growing your savings is making your money work for you with the power of compound dividends. Compound means you earn interest on the amount you deposited, and then, earn interest on that interest. With compounding dividends, even a small investment can grow to a large amount over time.
Additional Perks of Investing Your Tax Refund in a Certificate
A certificate is one of the safest ways to increase your savings. Below are some of the benefits of investing your tax refund in a certificate:
Options to choose from: We offer several share certificate options, such as a 9-month, no-penalty certificate and our bump-up certificate. The terms we offer for certificates range from three months to five years.
Protected savings: The National Credit Union Share Insurance Fund guarantees our share certificates.
Empowering consultation services: Through our MyConcierge™ service, you can chat with a local Members 1st associate to figure out the certificate option that best fits your financial situation.
Convenient mobile and online banking: Access your financial planning tools and funds anytime, anywhere via our digital banking options.
If you are interested in opening a certificate with us, all you need is a $500 minimum deposit. To learn more about the certificates available to our members, visit our website or one of our nearly 60 branch locations.
The content provided is for informational purposes only. This is not to be construed as financial or legal advice.