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Open a bank account so IRS can direct deposit your tax refund


Millions of taxpayers are anxiously awaiting the start of tax filing season 2024. They are expecting tax refunds.

Most of these filers also know that the quickest way to get their tax cash is to file electronically and have their refunds directly deposited. The Internal Revenue Service says that when you take this digital route, you will, in most cases, get you your refund in 21 days or less.

Some taxpayers, however, aren't eligible for this faster refund option. They don't have any financial account into which the IRS can electronically deposit their refunds.

Millions of under- and unbanked: Almost 6 million households don't have a bank account, according to a 2021 Federal Deposit Insurance Company (FDIC) national survey.

These so-called unbanked individuals tend to earn less, which explains their decisions not to open an account. Many of these households, notes the FDIC, report that financial institution fees and minimum balance requirements are the main reasons for not having an account.

Another nearly 19 million households are what is known as underbanked, according to the FDIC survey. These individuals have a checking or savings account, but tend to turn to alternative financial services.

The financial transaction alternatives include pawn shops, payday lenders, and private sector check cashing operations, which carry their own, often exorbitant, associated costs.

Options for unbanked: Still, there are some options if you want a bank account for, if nothing else, getting quicker access to your tax refund.

The FDIC's Get Banked program offers an online guide to opening an account at one of its insured banks.

Get banked FDIC graphic

The FDIC suggests you review this checklist before using its online search tool BankFind. You also can check out the lists of banks that offer accounts that can be opened online from:

If you prefer a credit union, the National Credit Union Administration website has its own credit union locator tool. You can search for a credit union by address or name, then pick one (or more) from the results to view more information.

The info will include the credit union's charter number. Plug that into the Credit Union Locator's companion Research a Credit Union online tool for more specifics on that branch.

If you're a military veteran, check out the Veterans Benefits Banking Program (VBBP). This partnership between the U.S. Department of Veterans Affairs (VA) Veterans Benefits Administration (VBA) and Association of Military Banks of America (AMBA) helps veterans and their families find account options at participating banks and credit unions.

Mobile banking options: If you're all in on mobile, some financial apps and prepaid debit cards allow for direct deposit of tax refunds.

In order for the IRS to be able to deposit your refund, the apps must have routing and account numbers associated with them that can be entered on a tax return. Check with the mobile app provider or financial institution to confirm which numbers to use.

Whichever account route you choose, set it up before your file. Now is a good time. Since the IRS usually doesn't start accepting and processing tax returns until the end of January, that gives you three weeks or so to get your account ready for your direct tax refund deposit.

You also might find these items of interest:



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