Before you spend all your refund on an expensive weekend or a new 85” TV, take a step back and weigh all your options. Getting your tax refund is a great opportunity to revisit any financial resolutions you set at the beginning of the year. If you hadn’t set any resolutions around finances, you can still consider some of these alternative ways to use your tax refund this year.
Build or boost your emergency fund
Having a strong emergency fund is an important part of your financial health and stability. If you don’t have a fund with three to six months’ worth of living expenses set aside to cover unexpected events, work on setting one up now. Use some of your tax refund to start building your emergency fund or boost an existing one.
Pro tip: MSGCU offers a You-Name-It Savings Account, which is a secondary share. These accounts allow you to call them whatever you wish, such as Emergency Savings, and they accrue interest daily.
Pay down high-interest debt
High-interest debt can kill the best of budgets. If you’re carrying outstanding debt with high interest, consider using some of your tax refund to pay it down.
If your tax return doesn’t tackle all your high-interest debt, another way to make a dent is with a balance transfer. Moving your debt to a new credit card with a low interest rate or a zero-interest offer can be a great way to pay down debt with your refund. Now until June 30, MSGCU is offering a 3.99% APR* promotional rate on balance transfers to our Rewards, Titanium, and Classic cards. There is no transfer fee, no minimum or maximum to transfer, and when your 6-month promotional period has ended, you’ll still get a great low rate on your MSGCU Visa card.
Get a guaranteed return on your refund with a CD
If you don’t have an urgent need for your refund, like repairs or paying down bills, consider investing your return in a Certificate of Deposit (CD). A CD is an account offered by banks and credit unions, in which the money you deposit earns a fixed rate of interest for a specified length of time, or term.
Since your money in the account is set for a predetermined time, your bank or credit union pays higher interest on CDs than on traditional savings accounts. This means that your money makes more money. MSGCU offers a variety of CD options, and even offers a promotional 9-month CD with a rate of 4.40% APY**.
Invest in your education
If you’ve been looking for a way to advance your career and increase your earning potential, this may be your chance. Consider furthering your professional education by allocating some of your tax refund to career workshops, conferences or additional certifications.
Start or contribute to a college fund
If you have children, or plan to start a family in the future, consider allocating a portion of your tax refund to a college savings fund, such as a 529 savings plan. Contributions to a 529 plan may be deductible on your state taxes, and earnings are tax-free when used for qualified education expenses.
Feed your savings
It’s always a good time to boost your savings, and tax refund season is no exception! Set aside a portion of your refund for your long-term savings to help you get closer to your financial goals.
Prepay your mortgage
Making an extra mortgage payment or two can be a great way to free up some money for the long term. Reducing the principal can have an exponential effect on your loan since so much of it goes towards interest over the life of the loan.
Make home improvements
Spending some, or even all, your tax refund on improvements that increases the value of your home is an investment in your equity. If your return doesn’t cover the project completely, MSGCU can help. We offer home equity options with rates as low as 6.49% that you can use in tandem with your refund towards refreshing your bathroom, or finally finishing that basement. It’s easy to apply and there’s no application fee.
Invest in your retirement
If eligible, consider allocating a portion of your tax refund to your employer-sponsored 401(k) or an IRA. The earlier you start investing for retirement, the more you can potentially accumulate for your golden years.
Can’t decide which option is best for your tax refund? We can help. Call, make an appointment at one of our 22 branches, or video bank from the comfort of your home to discuss your options.
*3.99% APR for 6 months on balance transfers only. Interest will begin accruing from the time of the transfer. No balance transfer fees. Members can make multiple transfers up to available credit limit. One balance transfer allowed per card. Standard APR applies beginning 6 months from date of the first balance transfer. Eligible on Titanium Visa Credit Card, Rewards Visa Credit Card, and Classic Visa Credit Card. Available to new and existing MSGCU cardholders. No minimum or maximum transfer amount is required. Transfer up to available credit limit. Offer valid 1/6/2025- 6/30/2025.
**APY = Annual Percentage Yield. $500 Minimum Average Daily Balance Required. Certificate of Deposits will automatically renew at maturity. You have a grace period of ten (10) calendar days after the maturity date to withdraw the funds in the account without being charged an early withdrawal penalty. Promotional Certificates will automatically renew at maturity to a standard term Certificate offered at the time of maturity.
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