CAP's Experience with R2A's and Refund Splitting
Refunds to Assets (R2A)is a free service that allows tax clients to directly deposit part of their federal refund into a savings account and receive part of it either by check or direct deposit into a checking account. The fundamental concept of the program lies in helping clients judiciously use the significant amount of money they receive in the form of a federal and/or state tax return and help them save for the future.
The tool is designed to allow clients to split their tax refund between savings and cash back to them, which should ultimately help motivate low-income families to save and engage in asset-building activities. During the 2005 tax season, CAP partnered with the Boston-based agency Doorway to Dreams and Bank of Oklahoma to operate the 2nd year pilot of the Refunds to Assets refund bifurcation tool at two of the Tulsa-area tax sites. During this time we enrolled 81 clients, opened over 200 new savings accounts, and directed $49,000 of refunds to savings. As an added benefit, Bank of Oklahoma offered CAP's tax clients free savings accounts with no minimum deposit or balance requirement.