Capital One Offers Tips to Make the Most of Your Tax Refund

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Consumers Should Take Measures to Supplement Savings While Examining Financial Goals
 
MCLEAN, Va., Mar 24, 2010 (BUSINESS WIRE) -- The April 15th tax filing deadline is just a few weeks away, and for many Americans that means a federal tax refund will follow. This week, the IRS announced1 that average tax refunds are up nearly 10 percent this year from the previous year, with the average federal refund totaling $3,036, an increase of $266 from the prior year. With many consumers slated to receive a refund, tax time is an ideal time for consumers to evaluate their financial plans and financial goals with an eye towards saving for the future.

"It has been a challenging year economically, but if the historic trends hold true, most consumers can expect to get a fairly significant tax refund," said Pam Girardo, spokesperson for Capital One. "It's easy to think of a tax refund as 'found' money or a bonus, and while it can be tempting to spend, before that check arrives in the mail, it is a good idea to map out a plan to help you put your refund to good use. Setting aside a small amount to reward yourself makes sense, but tax refunds offer a perfect opportunity for consumers to supplement their savings and earn interest for the future."

Capital One offers the following tips for consumers looking to make the most of their tax refund by putting a portion of it towards savings:

  1. Start saving ASAP - In the fluctuating economy it can be a challenging to think about saving money, but the adage "the sooner the better" certainly applies when it comes to saving and it is never too early to start. The sooner you start saving the more interest you can earn. Every little bit saved can help, so start saving as soon as you can.
  2. Look for a savings product with a strong rate - When reviewing your savings options choose the product with the best rate of return that matches your lifestyle and needs. A CD tends to offer higher interest rates than savings accounts because the holder commits to a fixed rate for a set term. If you are looking for more flexibility and access to your funds, an online savings account may be a better fit since it allows funds to be easily transferred and deposited. Capital One's new InterestPlus Online Savings account gives one of the best savings rates among the top national banks with a 1.25% annual percentage yield (APY) on balances of $2,500 or more, much higher than the .45% APY national average. Additionally, customers who keep an average balance of $15,000 or more each month in the account or use a Capital One credit card at least once a month qualify for a 10% quarterly bonus on interest earned.
  3. Save regularly by setting up an automatic transfer - Don't stop contributing to your savings after getting that tax refund. While it can be difficult, it is always a good idea to get into a routine of putting aside money. One of the easiest ways to do this is to have funds automatically moved to a savings account every month or with every paycheck. Consider an online savings account that offers free online transfers to and from existing accounts and set up automatic transfers in regular increments to ensure that money goes directly to savings.
  4. Avoid unnecessary fees - When choosing a savings product, make sure you that you are not losing your hard-earned cash to fees. Look for a product that offers no recurring monthly fees.
  5. Make sure your money is safe - Make sure any savings tool you use is FDIC-insured.

Capital One is a leader infinancial services and online banking, offering Internet-based Savings accounts, High-Yield Money Market and Business Money Market accounts most of which have no minimum balance, consistently high rates and no monthly maintenance fees.

About Capital One

Capital One Financial Corporation (http://www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $115.8 billion in deposits and $212.0 billion in total managed assets outstanding as of December 31, 2009. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.

1 "IRS Issues 2010 Filing Season Statistics," International Revenue Service, March 23,2010.

SOURCE: Capital One Financial Corporation

Capital One Financial Corporation
Pam Girardo, 703-720-2351
pam.girardo@capitalone.com