Why I'd Put My Tax Refund in a Money Market Account

You've done your due diligence. You found the right tax software, accountant or did the taxes yourself. And after crunching the numbers, you've discovered you're getting a tax refund.

Success! But now you turn your attention to what you plan to do it with it. The winter has been, well rough in many parts of the country. Perhaps, a well-deserved trip to see that warm, orange globe in the sky is just what's needed.

Or, maybe you have some items on your to-do list you're eager to get to. But before you set your sights on ways to spend your tax refund, why not earn a little juice on it first.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Here's why a money market account is the one of the best ways to achieve this.

Grow your tax refund with a money market account

A money market account (MMA) combines some of the best features of a savings account with the quick accessibility checking accounts offer.

Unlike high-yield savings accounts, where having access to your cash is limited to ATMs, ACH payments, in-person transactions at your bank or account transfers, money market accounts give you more ways to access your money.

With many banks and credit unions, you'll receive a debit card for purchases. In some instances, you can even write checks off the account. This gives you quick access and flexibility you won't receive with other savings vehicles.

And right now, you can earn an excellent rate of return. Explore and compare rates using the tool below, in partnership with Bankrate:

Outpace inflation while setting short-term savings goals

Planning a fall getaway and using a travel rewards credit card? One smart move is to set aside the money you'll use to pay off the card in a money market account while you wait.

Money market accounts currently offer interest rates that outpace inflation, which is holding at 2.8% — though that could rise if tariffs start to have an impact.

To stay ahead, look for a savings option earning 4% or more. Here are some of the top-performing money market accounts available now:

Swipe to scroll horizontally

Top-earning money market accounts
Account	APY	Min. Opening Deposit
Vio Bank	4.41%	$100
Brilliant Bank	4.40%	$1,000
CFG Bank	4.32%	$1,000
Merchants Bank of Indiana	4.25%	$50
Quontic Bank	4.25%	$100
All America Bank	4.25%	$500
Republic Bank of Chicago	4.25%	$2,500

What you'll find is that many money market accounts offer rates of return comparable to high-yield savings accounts and certificates of deposit (CDs).

The difference? Money market accounts often provide a unique combination of competitive interest rates and flexible access to your funds.

That means you can reach your short-term savings goals faster — without locking your money away. It's a great option if you want your cash to grow while still keeping it within reach.

Things to keep in mind with money market accounts

There are a few things to consider with MMAs, such as:

Interest rates are variable: It means if the Federal Reserve cuts interest rates in the future, MMA rates will likely dip.
Minimum balances might apply: Many banks and credit unions have minimum balance requirements for these accounts. Failing to maintain that could result in a fee that offsets any interest earnings.
Transaction limitations: It used to be you could only do six transactions per month for these accounts (ATM and in-person transactions excluded). While the Fed removed that barrier, check to see if your bank has any transaction limits for the account. If they do and you exceed them, you could pay unnecessary fees that prohibit growing your tax refund.

The bottom line

If you're expecting a tax refund this year, you might already be thinking about how to put it to good use — whether it's for home projects, travel or other expenses. While you're still in the planning phase, consider parking your refund in a money market account (MMA).

Unlike CDs or some high-yield savings accounts, MMAs offer greater flexibility, allowing you to access your funds easily — often with check-writing privileges or debit card access.

At the same time, you’ll earn a competitive return that outpaces inflation, helping your money grow while it waits to be spent.

By earning interest in the meantime, your refund goes a little further — giving you extra cash to put toward your upcoming goals or to simply keep as a cushion.

Sean is a veteran personal finance writer, with over 10 years of experience. He's written finance guides on insurance, savings, travel and more for CNET, Bankrate and GOBankingRates.