Americans Plan to Save Their 2026 Tax Refunds, but Most Will Stash the Cash in Low-Interest Accounts: Report

Americans are walking into the 2026 tax season with a clear goal. They want to save more money, and they see their tax refunds as the perfect chance to do it. That sounds like a smart move, and on the surface, it is.

But there is a problem hiding in plain sight. Most people plan to stash that money in places that barely earn anything. That one decision could quietly cost them hundreds or even thousands over time.

A strong wave of savings is building across the country. A recent Santander Bank survey found that 76% of consumers say saving more is their top financial priority for the year.

Around 57% of Americans expect to receive extra income this year, and for most, that means a tax refund. Among those expecting a refund, 88% say they plan to save at least part of it. That level of intent shows people are serious about improving their financial situation.

The size of those refunds is adding even more momentum. Thanks to tax law changes in 2025, refunds in 2026 could be up to $1,000 larger than last year. Total payouts may even cross $400 billion, which puts a lot of cash into people’s hands all at once.

Many households are counting on that money. About 85% of people expect refunds of at least $500, and 41% believe they will get $2,000 or more. That kind of lump sum can make a real difference, especially for families trying to build savings or catch up financially.

The Hidden Problem With Where the Money Goes

Karola / Pexels / Around 58% say they will keep their refunds in low or no-interest options like checking accounts, basic savings accounts, or even cash.

Only about 27% plan to use higher-yield options like high-yield savings accounts or CDs. That gap might not seem like a big deal at first, but it adds up quickly. The difference in earnings over time is hard to ignore.

For example, putting an average tax refund into an account earning about 3.50% APY could generate more than $1,500 in interest over three years. That same money in a traditional savings account earning around 0.39% APY would bring in only about $165.

That is nearly a tenfold difference, and it comes down to a single choice. The money itself does not change, but where you put it makes a huge impact. Over longer periods, the gap gets even wider, especially if some of that money goes into investments like the stock market.

Even with strong plans to save, real life often gets in the way. Economic pressure is still a big factor for many households. Rising costs for basics like food and energy are eating into budgets, leaving less room to follow through on savings goals.

A Smarter Way to Make That Refund Work

Dave / Pexels / The good news is that fixing this does not require a complicated strategy. It starts with separating saving from investing and giving each one a clear role.

That small shift can make a big difference over time.

An emergency fund should come first. That money needs to be easy to access and safe, which makes a high-yield savings account a strong choice. It keeps your cash protected while still earning a decent return.

Once that base is covered, extra money can go to work in other ways. Contributing to a 401(k) or an IRA is one of the most effective moves, especially if there is an employer match involved. That is essentially free money added to your savings.

For those already using high-yield accounts, the experience has been positive. More than 90% say these accounts are easy to open and simple to manage. Many also report that the extra interest helps them feel like they are making real progress.