You may have heard that Form 8888 allows you to direct-deposit your tax refund. In fact, the 8888 gives you three powerful ways to save. (Who knew the IRS could make life better?)
|Not only can you stash your refund in up to three checking or savings accounts—at up to three different institutions—you may be able to contribute to a CD, your HSA or a Coverdell (an Educational Savings Account). Call your bank, and allocate your heart out.|
|Thanks to a new initiative by the D2D Fund (the folks who piloted this whole refund-splitting concept), you can now buy Series I U.S. savings bonds with your refund.|
The Series I bonds aren’t high-yield, but they’re a safe place to park your money. You can’t touch the money for a year—longer if you want to redeem your bonds for their full value—and the Treasury will replace lost bonds.
Hunting for a graduation gift? Bonds are a money-smart alternative to a check tucked in a card.
|Remember, your refund is your hard-earned cash coming back to you—like good karma. Keep that energy moving forward, and put some money into your existing IRA, Roth, or SEP. You can choose whether your deposit should go toward your 2010 or 2011 contributions (and make sure you don’t exceed the yearly contribution limit).|