By: Tara Lynn Wagner
March 2, 2010
New Yorkers who are not sure what to do with their tax refund can take the advice of the Office of Financial Empowerment, and save it through the city's "$aveNYC Program."
"It's this innovative program where the mayor's trying to help people take advantage of the money moment. It's the moment you find out you're about to get probably the biggest check of the year, this huge tax refund," says Department of Consumer Affairs Commissioner Jonathan Mintz.
City Program Helps Turn Tax Refunds Into Savings Accounts
The program encourages people to open a savings account, where they can deposit some or all of their refund. Through $aveNYC, the city will match the deposit 50 percent, or up to $500, provided that the money is left in the account for one year.
In other words, a deposited tax refund worth $1,000 could be worth $1,500 plus interest in a year's time.
"Fifty cents on the dollar is as good as you're ever going to find, I think," says Department of Consumer Affairs Commissioner Jonathan Mintz.
This year, the program has $465,000 in matching funds available for single taxpayers earning no more than $18,000 a year, or taxpayers with children making less than $50,000. Those who qualify can go to one of the city's more than a dozen free tax sites and open an account at the same time as you file your return.
The accounts are held at community banks like the Carver Federal Savings Bank, where the money can earn interest and account holders' interest in saving can also take root.
"I think this will be great. This will give them, I guess, the sense of security in the future, where a year from now when the funds are accessible, they can use that for whatever reason," says Carver branch manager Jeffrey Larsen. "Also, they can also put it back into another account to earn more interest."
Mintz says the $aveNYC program is only in its third year but is already a success. Last year, roughly 950 people opened accounts and saved more than $470,000.
"The average saver was making only $15,500. And I think what we're showing New York, what we're showing the country, is just because somebody is making a small amount of money living in an expensive city doesn't mean that they're not smart enough, interested and able to pull a little bit of money aside and build for their future," says Mintz.
The matching funds are only available on a first-come, first-served basis. Those who think they might qualify for a $aveNYC account might want to file their taxes sooner than later.