## Show Your Potential ### Make your tax refund work for you On average, Americans got a tax refund of $3,170 in 2025 so far. Assuming you invested that average tax refund every year for the next 20 at a hypothetical 8% annual return, you’d have nearly $160,000! Try our calculator below to see how your tax refund could work for you. Initial deposit $ Contributions $ Annual Monthly Weekly Daily Years to invest years Average annual return % Show my potential Potential Future Balance: $159,841 > Created with Highcharts 12.6.0InvestmentReturn202620272028202920302031203220332034203520362037203820392040204120422043204420452046$0$50,000$100,000$150,000$200,000 Illustration of the power of compounding based on initial deposit, contribution schedule, time horizon, and annual rate of return specified. Changes to those variables will affect the outcome. ### You worked hard for your tax refund. Let’s make your tax refund work for you. You might be one of the millions of Americans getting a refund this year (hooray!). So far in 2025, the average federal income tax refund is about $3,170. Here’s how you can put that money to good use. ## 1. Pay down your debt Before you do anything else, pay down your high-interest debt. That’s because it’s this type of debt that’s costing you the most. Case in point: credit cards. An average credit card can charge you about 23% interest on your unpaid balance. - Suppose you only made the minimum monthly payment (about $25) on a $1,000 credit card balance. It would take you almost 11 years to pay off your debt, and you’d pay an extra $923 in interest. - There’s no rule of thumb of how to tackle your high-interest debt — besides **pay it off ASAP**. If that means using your entire refund to pay it off, that’d be a great use of that money. ## 2. Save for a rainy day You cleared your high-interest debt and still have some leftover refund money. Now what? Build up your emergency fund. - An emergency fund is money you set aside to cover unexpected expenses. That way, you don’t have to take on debt or dip into your investments to cover your planned (like rent or groceries) and unplanned (like car repairs or medical bills) expenses. - **Aim to have 3 to 6 months of your living expenses saved in your emergency fund** — this should cover rent, groceries, and other bare necessities. When you save in a high-yield bank account, you may be able to build your emergency fund faster. That’s because these types of accounts can offer **APYs** around 4%. ## 3. Invest, invest, invest! While you’re saving in your emergency fund, consider investing some of your refund money. - Investing can bring the growth you’ll need to reach your long-term goals. Let’s look at the numbers: the market has increased by an average of 10.4% over the past 100 years. - **What does that mean in practice?** Let's say you invested the average tax refund from above ($3,170). After 20 years of earning 8% annual returns, a conservative number by historical standards, you've almost doubled your money! And that's not even counting what you've been steadily investing along the way. Acorns makes it easy to invest in your future once, but also again, and again — making it an automatic part of your budget. All you have to do is pick how much you want to invest daily, weekly, or monthly. We’ll put that money to work in a diversified portfolio that matches your goals and objectives. ### What are your investing goals? Click below to learn more **Retirement** Save money for retirement with our easy IRA investing options, featuring SEP, Traditional, and Roth plans. **Education** Financial literacy content right in your app. Learn how to grow your money, investment and savings strategies, and more. **Investments for kids** With Acorns Early Invest, you can start investing for the future of your loved ones. Our UTMA / UGMA investment account for kids features custom Earn rewards and education for families. **Long term wealth** Your money is automatically invested into one of our diversified, ETF portfolios, built by experts and recommended for you. Plus, easily personalize your investments with a Bitcoin-linked ETF and a Custom Portfolio option which allows you to add individual stocks to your portfolio. ### This information is for illustrative purposes only. Compounding is the process in which an asset’s earnings are reinvested to generate additional earnings over time. Compound calculators do not take into consideration fees, taxes, dividend reinvestments, or other economic or market factors that may impact performance. Actual investment results may be materially different than portrayed. Diversification and asset allocation do not guarantee a profit, nor do they eliminate the risk of loss of principle. All references to “the market” refer to the S&P 500 Index. The S&P 500 Index is a weighted index of 500 leading publicly traded companies in the U.S and often used as a market benchmark.