Why direct deposit is the best way to get your tax refund
Updated Feb. 6, 2026, at 2:20 p.m. CT
If you’re expecting a tax refund this year, the way you receive your money has officially entered a new era. The Internal Revenue Service transitioned to a digital-first model Sept. 30, 2025—phasing out paper tax refund checks for a faster, more secure and cost-effective experience.
Whether you’re a long-time fan of electronic payments or a paper check holdout, here’s why digital is now the standard and what you need to know for this tax season.
Why the move to digital?
The shift to electronic payments—part of the Modernizing Payments To and From America’s Bank Account initiative (Executive Order 14247)—focuses on three main goals:
- It’s safer: Physical checks are 16 times more likely to get lost, stolen, altered or delayed. In fact, check fraud has risen 385% nationwide since 2020, according to the Bureau of Fiscal Service.
- It’s faster: Direct deposit is the fastest way to get your tax refund.
- It’s cost-effective: It costs the government about 50 cents per paper check versus less than 15 cents for an electronic transfer.
Other reasons direct deposit wins
While the government now requires digital methods for most, the IRS has long maintained that direct deposit is the superior choice. Here are a few reasons why:
|1| It’s fast
Direct deposit is the fastest way to get your money, especially when you also file your return electronically. The IRS typically issues nine out of 10 e-filed refunds in less than 21 days.
|2| It’s secure
With direct deposit, there’s no risk of having a paper check stolen or lost.
“And with our other electronic services to protect your account, you’ll be able to see exactly when your tax refund was received,” said Dupaco Credit Union’s Jill Gogel, vice president, fraud services.
|3| It’s free
You don’t have to pay a fee to receive your funds this way. Plus, it saves taxpayers money since it costs the government less to issue electronic payments.
|4| It’s flexible
You can have your refund deposited into up to three financial accounts, including:
- Checking
- Savings
- Individual Retirement Account
|5| It’s easy
Just follow the instructions within your tax software or tax form.
What you’ll need to go digital
On your tax form, you’ll select direct deposit as your refund method.
Your refund should only be put into accounts in your name, your spouse’s name or both if it’s a joint account. You’ll need to provide some information to make sure your refund lands exactly where it should.
If you’re having the money deposited into a Dupaco account, here’s what you’ll need to know:
- Routing number: Dupaco’s routing number is 273974581.
- Account number: Your full account number (not your member number). It can be located in Shine Online or Mobile Banking. From your home dashboard, click on an account. Then navigate to the Details and Settings tab to find your account number.
Avoid the prepaid card
Some tax software companies offer your tax refund on a prepaid debit card. While digital, they aren’t ideal.
These cards can come with costly hidden fees for monthly maintenance, transactions, card reloading and more.
Depositing your refund directly into your financial account helps your money work for you immediately. You’ll have easy access to your balance and funds—making it easier to save, budget and avoid unnecessary fees.
Watch out for tax-related scams
Is a large tax refund a good thing?
Sure, it can be nice to receive the extra money. But you typically receive a refund when you’ve overpaid your taxes throughout the year.
It may be worth touching base with your tax advisor to see if you’d benefit from adjusting your withholdings from your paycheck. This could put more money back into your monthly paycheck instead of waiting until next year to get it back.
Crunch the numbers with this IRS calculator >
It’s also worth making sure you’re maximizing your tax deductions for additional savings. Learn more here.
