According to the IRS, direct deposit is the “fastest, safest way to receive your tax refund.” In 2010 the IRS reports that 73 million taxpayers had their refund deposited directly into a checking or savings account, or a prepaid card. 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.
While most prepaid cards offer direct deposit of government checks, some make it easier to set up than others. In addition, prepaid cards offered by tax preparers often come with unnecessary fees. So we’ve cut through all of the marketing hype to create this list of the best prepaid cards for tax refunds.
Our list favors those prepaid cards that provide excellent instructions on how to set up the direct deposit of the refund.
- 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. The gold version of the AccountNow prepaid card earned an overall B rating.
- Emerald Prepaid MasterCard: This card from H&R Block is the only card by a tax prepare to make our list. It offers low fees and is ideal for those that use H&R Block to prepare their tax returns. The H&R Block prepaid card earned a B+ rating.
- Walmart Money Card: For those who shop at Walmart regularly, its prepaid card is an ideal way to receive your tax refund. As Walmart points out, you can get your refund in as fast as 8 days with direct deposit to a prepaid card, compared to 28 days via check. The Walmart MoneyCard earned an overall rating of B+.
- Rushcard: 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. If not, your refund will be rejected. The Rushcard prepaid Visa earned an overall rating of B from our proprietary rating engine.
- Kaiku: Last but not least, Kaiku makes our list because of its low fees. It has an overall grade of B+, and a sold A for low fees.
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.”