With large refund averages and an increase in the release of refunds the IRS has begun reminding taxpayers of their refund options. They offer several options for depositing your refund, including a Saving Bond Option.
By March 4, the IRS had issued more than 52 million refunds worth $161 billion for an average refund of $3,070.
This year taxpayers can choose to split up their refund and purchase savings bonds in their or other individuals names. In addition to this taxpayers may choose to direct funds from their refunds into many different types if savings accounts.
Refunds can be directed into bank accounts and other financial institutions where their mutual funds or retirement accounts are managed and to purchase U.S. Series I Savings Bonds. Taxpayers can choose to use a portion of the refund to buy up to $5,000 in low-risk savings bonds, which earn interest and protect owners against inflation. The bonds must be purchased in $50 increments
Form 8888, Allocation of Refund must be filed along with your 1040 to choose one of these options. Any excess funds that are not specifically allocated can be issued to the taxpayer by check. It is important to weigh your options when receiving tax refunds because some of these options may be more lucrative for you than putting the money in a savings and may assist in long term financial growth.