The bank surveyed middle-income Americans about theirtax refund planthis year.
Investing (16%) was another option chosen by those surveyed.
But Americans plan on spending at least some of their refunds, too.
Due tostubbornly high inflation, many families have put off these purchases over the past year.
Balancing responsible money management with enjoyment is key to creating a healthy mindset, Kennedy said.
Santander’s study surveyed over 2,000 Americans with a household income between $50,000 and $148,000.
What are the best options for saving my tax refund?
Ally Bank, Capital One and Synchrony Bank currently offerannual percentage yieldsof 4.25% or higher.
Some banks, like EverBank, offer over 5% interest rates for you to bank with them.
What else can I do with my tax refund?
Here are a few options.
There are no annual contribution limits for a 529 plan, and contributions grow tax-free.
Tax-advantaged savings vehicles
Also consider contributing to ahealth savings accountorflexible spending account.
HSAs and FSAs are tax-advantaged savings accounts that help cover your medical costs during the year.
The 2024 HSA contribution limit is $4,150 for individuals and $8,300 for families.
Those 55 and older can also contribute an additional $1,000 as a catch-up contribution.
All unused HSA funds automatically roll over to the next year.
When it comes to an FSA, you could contribute up to $3,200 this year.
That’s because the maximum carryover amount to 2025 for an FSA is $640.
You’re also not allowed to cash out your contributions at any time, barring a medical expense.
when you’ve got your financial needs covered, don’t forget to reward yourself.
Book a much-needed getaway or buy that new set ofheadphonesyou’ve been eyeing.
Thinking ofstarting a side hustle?
Your tax refund can help pay for classes or materials to get you started.
