More than a Third of Americans Plan to Spend All or Part of Tax
Refunds, Finds Survey
Refunds, Finds Survey
MCLEAN, Va., Mar 17, 2011 (BUSINESS WIRE) --
This year's April 18th tax filing deadline is just around the corner, and according to the latest IRS statistics, the average federal tax refund will be $3,129. A new survey from Capital One Bank (www.capitalone.com/bank) finds that more than one-third (37 percent) of Americans plan to spend all or part of this year's refund.
Among the ways consumers plan to spend their refunds is on everyday expenses (23 percent), new clothing and accessories (11 percent), a vacation (6 percent), or an iPad, TV or other electronics (4 percent). By comparison, only 5 percent of respondents plan to save their refund for retirement and 5 percent plan to set the money aside for their children's college education.
"With so many Americans slated to receive a significant refund, tax time is an ideal time for consumers to evaluate their long-term financial goals with an eye toward saving for the future or paying down debt," said Mark Elliot, Executive Vice President for Consumer Banking at Capital One Bank. "We often think of a tax refund as an unexpected bonus, which makes it tempting to treat ourselves by spending it. But for many people, receiving a tax refund provides an opportunity to think about how to improve their financial health."
Some Americans are heeding that advice. Of consumers polled, 31 percent plan to save at least part of their tax refund, and another 19 percent plan to use their refunds to pay down debt.
For those consumers who will owe taxes this year, about one-third (34 percent) report that they will need to dip into their personal savings to cover the cost. About the same percentage (35 percent) have set aside savings specifically for taxes and about one-fifth of those who owe taxes (21 percent) are unsure how they will pay their taxes this year.
Capital One Bank offers the following tips for consumers considering how they can boost their savings, whether they're looking to improve their financial security by saving their tax refund or planning to set aside taxes they might owe for next year:
- Start saving ASAP - In the fluctuating economy it can be challenging to think about saving money, but the adage "the sooner the better" certainly applies when it comes to saving and it's 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.
- 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're looking for more flexibility and access to your funds, an online savings account may be a better fit because it allows funds to be easily transferred and deposited. Capital One Bank's InterestPlus Online Savings (www.capitalone.com/directbanking) account has one of the best savings rates among the top national banks with a 1.10% annual percentage yield (APY) on balances of $1,000 or more, much higher than the 0.21% APY national average. Additionally, customers who keep an average monthly balance of $10,000 or more in the account or use a Capital One credit card at least once a month receive an extra 10% quarterly bonus on interest earned. InterestPlus Online Savings is a no fee, FDIC-insured savings account that customers can open online.
- Save regularly by setting up automatic transfers - Don't stop contributing to your savings after getting that tax refund. While it can be difficult, it's always a good idea to get into a routine of putting aside money. One of the easiest ways is to have fundsautomatically moved to a savings account every month or with every paycheck. This is particularly important if you need to set aside savings for taxes at the end of the year. 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.
- Avoid unnecessary fees - When choosing a savings product, make sure that you're not losing your hard-earned cash to fees. Look for a product that offers no recurring monthly fees.
- Make sure your money is safe - Make sure any savings tool you use is FDIC-insured.
Capital One Bank is a leader infinancial services and online banking, offering great rates on a variety of online money market accounts, savings accounts, certificates of deposit and business money market accounts nationwide. Customers enjoy convenient and secure access to their accounts and Capital One Bank service representatives via online, phone or mail channels. Capital One Bank's Call Center for online banking products has been recognized by J.D. Power and Associates for providing "an outstanding customer service experience," two years in a row under the J.D. Power and Associates Certified Call Center Program.
The findings reported in this release are from 1,037 telephone surveys conducted by the opinion research firm, Braun Research of Princeton, NJ. The survey was sponsored by Capital One Financial. Braun Research completed 829 landline and 208 cell phone interviews with US resident adults age 18 and over. All interviews were by telephone. The interviews were conducted March 3 to March 9, 2011. The margin of error is ± 3.04 percentage points at the 95 percent confidence level. Interviews were monitored and verified at random. Sampling for this study was conducted using a national probability sample. All interviews were conducted using a computer assisted telephone interviewing system. Landline interviews were conducted with normal dialing processes and cell phone interviews were dialed by hand in compliance with state and federal rules. Statistical weights were designed from the United States Census Bureau statistics.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N.A., had $122.2 billion in deposits and $197.5 billion in total assets outstanding as of December 31, 2010. 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.
SOURCE: Capital One Financial Corporation
Amanda Landers, 703-720-2478