Rapid refunds are probably not worth the cost unless you have an urgent need for immediate cash. Most often called refund anticipation loans (RALs), rapid refunds are also called instant refunds, fast cash refunds, rapid refund loans, or holiday loans. RALs are very short-term loans arranged through a bank or other institution. Your expected tax refund serves as collateral.

The cost of your rapid refund depends on the size of your tax refund. Rapid refunds usually carry an annual interest rate from 40% to more than 700%. They also tend to have high loan fees, in addition to fees for tax preparation, electronic filing, or check cashing. In lieu of checks, some tax preparers offer preloaded debit cards, which also have fees.

You can generally receive a rapid refund in one to four days. If you file electronically and have your refund directly deposited into your bank account by electronic funds transfer (EFT), you can receive your refund from the IRS in an average of seven to 10 days. If you are of low or moderate income, free software is available for preparing and electronically filing your tax return.

If you are eligible for the earned income tax credit or are a senior citizen, you may be able to obtain free assistance in preparing and filing your return electronically for a fast refund. Some non-profit citizen action organizations offer such taxpayers alternative rapid refunds with lower refundable bank fees and interest.

You can read more information about rapid refunds at the U.S. Department of Consumer and Regulatory Affairs (PDF) Web site.