Fintech Tools for Investing Your Tax Refund

Jeremy BiberdorfBy: Jeremy Biberdorf

April 4, 2016April 4, 2016

It’s tax season again and for many people that means figuring out what to do with your refund check. Last year, the average refund was about $3,000, a decent chunk of change for a young professional looking to start investing.

Recent surveys show that while millennials are attempting to save more than previous generations, a majority of them have less than $1,000 in savings. A relative windfall like this can be the perfect time to start investing. At the same time, nearly half of all Millennials are relying on tech startups to change the banking and finance industry. Conveniently, there is a new generation of tech-enabled companies that are focused on providing investors with increased transparency, low fees, and mobile services.

Here’s a look at 6 companies for new investors who want to get educated and invest their tax refund wisely.



Fundrise is a new service that allows individuals to invest in commercial real estate. Regulations have historically limited the ability for investors to directly invest in real estate…until now. With ultra-low fees and a minimum investment of just $1,000, Fundrise allows anyone to invest in high-quality commercial real estate online. In 2015, Fundrise investors earned a net weighted average return of approximately 13% – that’s 8.5x better than the S&P 500.


Massive Online Open Courses (MOOCs) are a great new tool for first-time investors looking to learn about investing in all different types of assets. Khan Academy is a non-profit company that provides online courses completely free of charge. Their robust investment education platform can be broken down by asset types, markets, and topics that any beginner will find consumable.



Wealthfront is a popular “robo-advisor” founded in 2011, a great choice for “hands off” investors. They offer a broad suite of automated services to help reduce the action an investor must take to maintain their portfolio. One big bonus for new investors is that Wealthfront does not charge a management fee for portfolios under $10,000.



Acorns puts a different spin on the traditional robo-advisor by funding your investment portfolio with “spare change.” Acorns rounds up to the nearest dollar on any transaction you make with a checking account, and invests that change in your portfolio. Good news for new investors: as of this writing there are no account minimums, and investors between 18 and 24 (read: students) are not charged a management fee. Portfolios are distributed according to your risk preference among up to 6 ETFs.



Robinhood is an online stock brokerage platform that features zero transaction-based compensation, and no account minimum for cash accounts. Their mission is to democratize access to financial markets by trimming costs that other brokerage firms impose. For first time investors, this is a great way to get your feet wet trading stocks while avoiding the fees associated with making these trades. And if you aren’t sure what to buy, Motley Fool stock picks are a great start.

In summary, there’s no perfect strategy for what to do with your tax refund. While none of these companies will make anyone an investing wizard overnight, they can help young professionals and others to dip their feet into the investing world. Happy refund season.

This information does not constitute an offer to sell nor a solicitation of an offer to buy securities, nor does it contain any individualized tax advice.  The information contained herein is not investment advice and does not constitute a recommendation to buy or sell any security or that any transaction is suitable for any specific purposes or any specific person and is provided for information purposes only.  Each investor should always carefully consider investments in any security and be comfortable with his/her understanding of the investment, including through consultation with investment and tax professionals.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

1 thought on “Fintech Tools for Investing Your Tax Refund”

  1. I’ve heard of a couple of these tools – especially a lot about Acorn. These seem like some great ideas for spending your refund in ways that can really improve your life. Thanks for sharing this list!

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