Three Smart Ways to Use Your Tax Refund

The COVID-19 crisis has brought both a deadline extension for filing 2019 taxes and a heightened awareness of the need to plan for financial security. If you are due a refund, you have probably already filed your taxes or plan to file soon. Here are three productive ways to consider using that refund money:

  1. Pay off debts – Use your refund to tackle any existing debts you may have. It might not be the most exciting use of your refund, but it’s always a smart financial move.
  2. Start an emergency fund – Saving smarter means being prepared when the unexpected occurs. Consider opening a savings account that’s designated for emergencies only, like sudden medical expenses or unexpected complications with your job. Start building now with the goal of setting aside 3 to 6 months of income to see you through a future crisis.
  3. Prepare for big future expenses with a CD – If you know you’ll need a new car in a few years or want to start saving now for a future home improvement, consider opening a certificate of deposit with your tax refund. By setting the money aside now in a high-interest CD, you can ensure you have the funds available when your next big expense arrives.

Save smarter this year with help from Discover Bank®* – the only bank that offers AAA members preferred member annual percentage yields (APYs). To learn more about savings, money market and CD accounts, visit AAA.com/Deposits or call 1 (800) 347-7056.

*Discover Bank, Member FDIC