How to Invest Your Tax Return this Year

With Tax Day just around the corner, many people are anxiously awaiting the arrival of their tax returns. Whether you’re getting a lot back or just a little, tax returns present the opportunity to make a meaningful financial move. Rather than spending your tax return on an impulse buy, consider investing your tax return to work towards long-term financial growth.

Keep reading to learn about the benefits of investing your tax return, types of accounts to invest in, and how investment checking accounts work.

Why Should You Invest Your Tax Return?

The temptation to spend your tax return may be great, but there are lots of even greater reasons why investing your tax return can benefit you for years to come. That’s because, by making the investment, your money has the potential to grow over time. Which means your wealth can grow over time.

Investing your tax refund can serve as a stepping stone toward reaching your financial goals. Whether you're aiming to retire comfortably, purchase a home, finance your children's education, or establish an emergency fund, investing your refund can get you on the right track.

By investing your tax return wisely, you're not only making the most of your money but also laying a solid foundation for long-term financial success. It's a proactive step toward securing your financial well-being and achieving your goals.

Ways to Invest Your Tax Return: CDs and CD IRAs

While there are many different types of investment accounts, those who are looking to invest their tax return with less risk may be interested in a Certificate of Deposit (CD)¹ or CD Individual Retirement Account (IRA).²

CDs are a low-risk investment option offered by banks and credit unions. When you invest in a CD, you agree to deposit a certain amount of money for a fixed period, known as the term or maturity period. In return, the financial institution typically offers a higher interest rate compared to standard savings accounts.

While CDs offer security and guaranteed returns, it's essential to be aware of potential drawbacks, such as early withdrawal penalties and the opportunity cost of tying up your funds for a fixed period.

For those looking to save for retirement while enjoying the benefits of CDs, CD IRAs offer a tax-advantaged investment vehicle. Similar to traditional IRAs, CD IRAs allow you to invest in CDs within a retirement account framework.

Can You Invest with a Checking Account?

Traditionally, checking accounts have been associated with everyday transactions rather than investment activities. However, the Academy Bank Elite Investment Checking³ Account combines the convenience of a checking account with the potential for investment growth.

What is an Investment Checking Account?

An interest checking account is a type of bank account that combines the features of a traditional checking account with the ability to earn interest on the funds deposited.

Unlike standard checking accounts – many of which do not generate interest – investment checking accounts offer account holders the opportunity to earn interest on their account balance.

Like standard checking accounts, investment checking accounts offered by FDIC-insured banks are protected by FDIC insurance, providing peace of mind against bank failures up to the insured limit.

While investment checking accounts offer convenience and accessibility, it's essential to weigh their features and fees against your investment objectives and compare them with other investment options available to you.

Academy Bank Elite Investment Checking Account: Checking Accounts with Interest

With the Academy Bank Elite Investment Checking Account,³ you may be wondering… Is Elite Investment a checking account or savings account?

The answer is… YES!

Elite Investment Checking is a tiered-earning checking account. Which means that the rate of return rises as your balance rises.

Earn increasing interest⁴ depending on your balance. You’ll get special loan discounts, including a mortgage closing cost discount ($250). And there are no fees on money orders or cashier’s checks.

Here’s what else you get with our Elite Investment Checking Account:

• Mobile Banking and check deposit^5,6
• Get paid one day early with Early Pay⁷
• Complimentary standard checks
• Free paper statements and eStatements
• Access to 38,000+  ATMs through MoneyPass⁸
• VISA debit card usage alerts
• Eligible for Saving Cents⁹ - round up your debit card purchases automatically and put the change in your savings
• Make Referrals, Get Rewarded: Refer your friends and family to Academy Bank for a new checking account. They’ll get $50 and you’ll get $50 for every new referral.¹⁰

Be sure to keep this in mind:

• There is a $100 opening balance requirement on Elite Investment Checking account.
• No monthly service charge when you meet one of the following requirements each statement cycle:
  • Maintain a daily balance of $5,000 per monthly statement cycle
  • OR maintain an average balance of $10,000 per monthly statement cycle
  • Otherwise, a monthly service charge of $20 applies.
• Closing new accounts within 90 days of opening will result in a $20 early closure fee.
• Add cash to your account from thousands of retailers with Cash2Debit^{TM 11}

Invest Your Tax Return, Invest in Your Future

While putting your tax refund in an account to grow – rather than spending it – may not seem like much fun, the truth is that it can (literally) pay dividends for years in the future. Whether you choose to invest in a CD¹ or CD IRA,² or explore the possibilities of an investment checking account,³ the key is to align your investment strategy with your financial goals, risk tolerance, and time horizon.

By making informed investment choices, you can make the most of your tax return and pave the way towards a more secure financial future.

 

Member FDIC

¹ $500 minimum opening deposit. A penalty may be imposed for early withdrawal. Fees charged to the account could reduce earnings on the account.

² $500 minimum opening deposit. A penalty may be imposed for early withdrawal. The Annual Percentage Yield (APY) is accurate as of today. CD rates are subject to change at any time and are not guaranteed until CD is opened. Fees charged to the account could reduce earnings on the account.

³ $100 opening deposit required. $20 monthly service charge applies unless you maintain a daily balance of $5,000 per monthly statement cycle OR maintain an average balance of $10,000 per monthly statement cycle. Closing new accounts within 90 days of opening will result in a $20 early closure fee.

⁴ We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day. The Annual Percentage Yield (APY) is accurate as of today. The interest rate may change after the account opening. Fees may be charged to the account, which could reduce earnings on the account. If the account is closed prior to the interest payment date, no interest will be paid.

⁵ Message and data rates charged by your mobile phone carrier may apply.

⁶ Deposits are subject to verification and not available for immediate withdrawal. Deposit limits and restrictions apply.

⁷ Direct deposit required. Maximum ACH credit is $15,000.

⁸ No fees for withdrawals, transfers balance inquiries or denied ATM transactions at ATMs in the MoneyPass® Network if you have a MoneyPass® logo on the back of your card.  MoneyPass® Network ATMs are within the U.S. only.

⁹ Choose from $1 to $5 increment to round up on your debit card purchases from your checking account. Each night all the extra change will automatically transfer from your checking to your savings.

¹⁰ Referee must enroll in Digital Banking and make one or more direct or mobile deposits that total $300 within 60 days of opening their account. Message and data rates apply. Refer A Friend terms and conditions apply. 

¹¹ A $4.95 fee may apply. Deposit limits and restrictions apply. Not available in Vermont. Ask an Academy Bank associate for details. Not available at self-checkout.