It’s not every day that you get an extra $3,000 sent to your bank account. Yet the latest figures from the IRS indicate that the average taxpayer will receive a refund of $3,116 for the 2024 tax year. If you’re one of those taxpayers, you may be wondering what you should do with that money. 

If you’re considering investing that cash, you’ve got plenty of options. Stocks, exchange-traded funds (ETFs) and mutual funds give you a way to potentially grow your money over time through market performance. Parking your money in a certificate of deposit (CD) or a high-yield savings account can be smart, too. 

However, if you prefer to explore an alternative asset, gold provides an interesting opportunity. The precious metal’s price has hit numerous historic highs in recent years and currently sits at $3,331.77 per ounce. Though its price is rising, it’s still not too late to use your tax refund to invest in the yellow metal. 

Before you commit your money, though, it helps to know the options you have for investing your tax refund in gold. Below, we’ll break down two smart gold types to consider for your money right now.

Invest in gold now before the price rises again.

Gold investments to put your tax refund into

There are multiple gold investing options to choose from at any time but these two could make particular sense for your tax refund now:

Gold IRAs

Gold individual retirement accounts (IRAs) allow you to buy gold through a self-directed IRA. Opening a gold IRA with the funds you receive from your tax return gives you three key benefits: 

• You can opt for pre-tax contributions that reduce your tax liability in the year in which you make your contributions. 
• Your gold assets diversify your portfolio, as gold’s value typically doesn’t follow the ups and downs of stocks and bonds. 
• Adding gold to your retirement portfolio through an IRA provides a hedge against inflation. When inflation rises, gold’s value tends to rise, too, since investors buy it as a safe haven to protect themselves against the dollar losing its value and inflation-influenced market volatility. 

Gold’s role as a portfolio diversifier and inflation hedge is critical in the current economic environment. There’s a good deal of uncertainty surrounding the stock market and the economy and inflation is higher than where the Federal Reserve would like it to be right now even though it’s dropping. Those strengths play out over the long-term, too, which is why gold can serves a crucial role in keeping your retirement portfolio balanced. 

Use your tax refund to open a gold IRA here now.

Gold bars and coins

Gold bars and coins could be a great option for your tax refund for several reasons. Buying physical gold diversifies your investment portfolio, offering balance if your stocks and other market-based investments dip. During times of inflation, gold often maintains or increases in value as the dollar loses its value.

Buying gold bars and coins offers a benefit that gold IRAs don’t, too: liquidity. Whereas gold IRAs have restrictions and penalties related to withdrawals you make before you’re 59 ½ years old, physical gold has no such restrictions. You can buy gold bars and coins through a retailer such as Costco or through a trusted gold dealer today and sell them with relative ease in the future. 

If you decide to buy physical gold with your tax refund, you’ll need to consider how you’ll store it and if you want to purchase insurance for it — both of these are recommended steps to protect your investment. 

The bottom line

Gold is an ideal investment option for those looking to invest their tax refund right now. The metal’s hedging qualities and the portfolio diversification it offers are great benefits to have right now amid higher-than-desired inflation and uncertainty over where the economy is headed. Gold IRAs are a good vehicle for adding gold to your retirement portfolio, while buying gold bars or coins gives a more liquid way to invest in the precious metal.