Direct deposit is the "fastest, safest way to receive your tax refund," According to the IRS. There are several advantages to direct deposit of a tax refund:
- You can get your refund much faster, typically in about 8 to 10 days;
- More secure than getting a check in the mail (thousands of refund checks are returned to the IRS each year);
- For those without bank accounts, direct deposit avoids expensive check cashing fees; and
- You can get access to your refund faster than waiting for a check to clear.
Many have refunds direct deposited to a checking account or savings account. For those without a bank account, however, a prepaid debit card is a good alternative. While most prepaid cards offer direct deposit of government checks, some make it easier to set up than others.
In addition, some prepaid cards offer bonuses when you deposit your tax refund on the card. With that in mind, the list below favors those prepaid cards that provide excellent instructions on how to set up the direct deposit of the refund and that offer tax refund bonuses.
- Rushcard: The Rushcard prepaid Visa makes the top of our list for one reason--it is offering a cash bonus of up to $30 when you have your tax refund direct deposited onto the card. The details: When you apply for a Prepaid Visa RushCard and direct deposit a total of $3,000 or more of your tax refund, you'll get $30. When you direct deposit between $2,000 and $2,999, you'll get $20. And even if your refund isn't that big, having it direct deposited on the card is easy. The folks at Rushcard have provided some really helpful information on tax refunds. For example, it points out that if you file a joint return, the prepaid card should be in the name of the first person on the return.
- Netspend: The Netspend prepaid card does an excellent job of walking through the steps necessary to get your refund deposited onto a prepaid card. In addition to the routing number and bank account number, both of which are supplied once you get the card, they also walk through the steps to set up the deposit. Netspend earned an overall B+ rating based on fees, features and limits in our proprietary rating algorithm.
- AccountNow: This prepaid card offers an interesting twist. Not only do they walk through how to set up direct deposit, but they also help you prepare your taxes. AccountNow partnered with ezTaxReturn.com to help its cardholders prepare their tax returns. In addition, AccountNow is running a contest that will triple the lucky winner's tax refund, up to $15,000. To enter, direct deposit your federal or state refund on an AccountNow Card by April 29, 2016 and you can get a chance to triple your refund.
- Green Dot: This prepaid card is running a contest with the winner getting their tax refund doubled, up to $15,000. To enter direct deposit your tax refund onto a Green Dot prepaid card. You can also get up to 9 bonus entries by making additional cash reloads or direct deposits with a minimum of $10 per load or direct deposit (excluding reload fees). Promotion starts on January 1st, 2016 to April 29th, 2016. One (1) qualifying load or direct deposit is equivalent to one (1) bonus entry.
- Kaiku: Last but not least, Kaiku makes our list because of its low fees and rich features. With Kaiku you can pay bills online, transfer money to friends and family with a Kaiku card, and get cash at 55,000 surcharge-free ATMs.
If you do use a prepaid card to get your refund, there is a free tool to track the status of the direct deposit. Offered by the IRS, it's called "Where's My Refund."