According to the IRS, direct deposit is the “fastest, safest way to receive your tax refund.” The IRS reports that nearly 75% of taxpayers get a refund. And the vast majority of those 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;
- It’s more secure than getting a check in the mail (thousands of refund checks are returned to the IRS each year);
- Direct deposit avoids expensive check cashing fees; and
- You can get access to the cash faster than depositing a refund check because you don’t have to wait for the check to clear.
Using Prepaid Cards to Receive Your Tax Refund
While the benefits of using direct deposit for tax refunds are compelling, some refund recipients don’t have a bank account to receive the refund. That’s where prepaid debit cards come in.
Prepaid cards can be used like bank accounts to receive tax refunds. The process is nearly identical. You just need to check the box on your tax return to receive your refund by direct deposit and fill in a routing number and account number for your prepaid card on line 20 of the 1040 Form.
You can find your routing number by signing into your prepaid card account and going to the direct deposit section of your web portal. For some cards, you can also get your routing and account numbers by text. For a Netspend card, for example, you can text “DIRECT” to the Netspend SMS number, 22622.
Unlike bank accounts, however, prepaid cards have balance limits. All cards cap the amount that you can have on the card at any time. Those balances vary significantly among prepaid cards, so you’ll want to make sure your prepaid card has a sufficient card limit to receive your refund.
Tax Refund Prepaid Cards
While most prepaid cards offer direct deposit of tax refunds and other government payments, some cards make it easier to set up than others. So we’ve cut through all of the marketing hype to create this list of the best prepaid cards for tax refunds. Our list also favors those prepaid cards that provide excellent instructions on how to set up the direct deposit for tax refunds and card limits sufficient to accommodate them.
- 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. The Netspend card has a generous $15,000 card balance limit–adequate for for most any tax refund. Plus, it offers a high-interest savings account to earn more money if you want to save that refund for later. And any amounts transferred to your savings account don’t count against the card balance.
- Brink’s Prepaid Mastercard offers similar benefits to the Netspend card. It offers the same $15,000 card limit with a savings account to extend that limit. And it offers step-by-step instructions to set up direct deposit for your refund.
- Green Dot Visa. And Green Dot waives its monthly fee if you load $1,000 or more to the card saving a few extra bucks. You can quickly get your account number and routing number for the Green Dot card via text. Just text DDinfo to 37267.
- Walmart MoneyCard has some great benefits, like cash back rewards and a savings vault, in addition to offering a fast way to get your refund.
If you do use a prepaid card to get your refund, you can track the status of the direct deposit. Offered by the IRS, it’s called “Where’s My Refund.” You’ll just need your social security number, filing status, and the amount of your refund.