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With the IRS now accepting tax return filings, tens of millions of Americans could find they are owed a substantial tax refund. After the April 15 tax filing deadline passed last year, the average refund issued in 2024 was $2,850. That's a hefty chunk of change you can put to good use.
If you're fortunate enough to not urgently need the cash you'll receive, you can take advantage of today's stellar interest rates to turn that refund into a more sizable sum—allowing you to do even more with it in the future.
Three safe, easy options for boosting your refund are:
We'll go over each of these options below, including how much each one can stretch various refund amounts.
One of the simplest ways to earn a great return on your cash is to put it into one of the country's best high-yield savings accounts. We rank the highest-paying options every business day, and the top rate is currently 4.75% APY, with a total of 11 options paying 4.50% or better. Compare that to big banks that pay virtually zero, or even the national average of just 0.41%.
Savings accounts let you deposit and withdraw at will, so you won't have to commit your funds for any particular duration. You can leave your money there for months, a year, or even longer. Or, if you need some of the cash, you are free to withdraw as needed.
So how much can you earn? Since savings account rates can change at any time, we can only estimate earnings going forward. But assuming an average savings account rate of 4.50%, we lay out below what different refund amounts can earn over various timeframes.
Although you can withdraw money from a savings account at any time, the tradeoff is that the rates are variable and never guaranteed. You can earn up to 4.75% right now with the best account. But there's no way to predict how long that rate will last.
Money market accounts act very much like savings accounts, except they add a special feature: the ability to write paper checks. If this feature is useful to you, choose a money market account over a standard savings account. But if not, feel free to choose whichever product pays a better rate and offers any additional features you value.
Right now, the best nationwide money market account pays 4.75%, making it an excellent choice. For more options, see our daily ranking of the best money market accounts, with about a dozen options to earn 4.00% APY or better.
To see how much you can earn, refer to our table above for a hypothetical 4.50% savings account.
All of the institutions we feature for savings, money market, and CD accounts are federally insured: by the FDIC for banks or the NCUA for credit unions. This means that your deposits up to $250,000 per person and per institution are federally protected no matter the institution's size.
Maybe you know that you won't need your refund money—or at least some of it—for a while. If you can commit to parking your money in an account for months or even years, you stand to earn even more with a certificate of deposit (CD). That's because, unlike savings and money market accounts, CDs offer a fixed and guaranteed annual percentage yield (APY) that's yours to keep until its maturity date.
Right now, interest rates are high. So locking in a top CD soon will guarantee one of today's elevated rates far down the road. You can always shop for the top rates with our daily ranking of the best nationwide CDs. The leading APYs across terms currently range in the mid- to upper-4% range. (One 8-month CD currently pays 5.50%, but the offer has an expiration date of Jan. 31.)
Just be sure to choose your CD term carefully, as you'll most likely be hit with an early withdrawal penalty if you withdraw your CD funds before maturity. By choosing a CD term you're confident you can live with, you'll protect your earnings from any penalty.
Though you can withdraw your CD funds in an emergency, the threat of a penalty may help you keep your money in savings longer than if you had easy access to it. That means CDs don't just boost your refund—they can also help you resist the temptation to spend the money on extra expenses.
To see how much you can earn by saving all or some of your refund in a CD, review our calculation table below.
It's generally expected that the Federal Reserve will push rates modestly lower this year, beyond the three rate cuts it already made in September, November, and December 2024. But the timing and pace of 2025 rate cuts are highly uncertain right now due to unknown impacts from policies implemented by the new Trump administration.
According to the CME Group's FedWatch Tool, most interest rate traders aren't anticipating another rate cut until the Fed's May 6–7 meeting. About 64% of traders think it's probable that we'll see a second Fed rate cut by the end of 2025.
We update these rankings every business day to give you the best deposit rates available:
Best 3-Month CD Rates
Best 6-Month CD Rates
Best 1-Year CD Rates
Best 18-Month CD Rates
Best 2-Year CD Rates
Best 3-Year CD Rates
Best 4-Year CD Rates
Best 5-Year CD Rates
Best High-Yield Savings Accounts
Best Money Market Accounts
Note that the "top rates" quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.