By BankingMyWay.com Staff
There's only a month left to file your 2008 tax return. Like most Americans, you may be counting on a refund check from Uncle Sam. But before you go out and spend your windfall on some consumer goods, consider using it to boost your emergency savings.

According to the IRS' most recent data, 78% of the 138.4 million tax returns filed in 2006 received a tax refund. The average amount of that refund was $2,227. That amount of money could buy you a 50" plasma HDTV from Panasonic (Stock Quote: PC) to watch March Madness games. But while college hoops will look great on a monster TV, there’s an even better way to use that money: deposit it in a money market account (MMA).

The key to surviving uncertain economic times is maintaining your financial flexibility, and stashing money in an MMA can help you do that by offering easy access and relatively high interest rates compared to other savings accounts. The $2,227 could add an extra month of fixed expenses to your existing emergency fund, or it could get you well on your way towards saving up for an upcoming major housing expense, such as a repairing your roof or fixing your furnace.

Interest rates on MMAs currently average 0.56%, according to the BankingMyWay.com Money Market Rate Index -- double the 0.28% offered by the average savings account. The higher interest rates are important to help your money stay ahead of the eroding power of inflation.

And while certificates of deposit (CDs) typically offer higher interest rates -- the average on a 12-month CD recently was 1.57% -- customers typically are charged fees to withdraw money before the CD has matured. MMAs, on the other hand, typically allow customers to make as many deposits as they want, while limiting withdrawals to six times transactions per month. Building a CD ladder can help you earn a high interest rate while maintaining some access to your money,but short-term ladders are often not worth the hassle due to lower interest rates on short-term CDs.

If you are expecting a tax refund and plan on saving it instead of spending it, your first step should be to shop around for the best interest rates. Head to BankingMyWay.com and search for Money Market offers from local institutions. Interest rates can vary widely from lender to lender. For instance, residents of North Carolina can get an MMA from Bank of America (Stock Quote: BAC) with an interest rate of 1.0% or from Wachovia (Ticker: WFC) with a rate of 0.15%. Meanwhile, Mountain Credit Union is offering a rate of 2.58% to its customers.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.