5 Benefits of Christmas Club Savings Accounts
Tips for Saving Money for the Holidays
Buying gifts, hosting parties, and traveling to visit family are just a few of the expenses that can break your budget every holiday season. Without saving throughout the year, these expenses can easily end up on a credit card. Then you are stuck paying for them the entire next year, or even longer, with interest. If you want to break this cycle, consider opening a Christmas Club account. This is a short-term account set up by your bank to allow customers to set aside money for the holidays. Christmas Club accounts make the holidays feel a lot more affordable. Let’s take a closer look at how these savings accounts work and the benefits of setting up an account now to prepare for next year.
How do Christmas Club savings accounts work?
Typically, Christmas Clubs are offered by community banks. They begin around fall/the start of the new year. Jarrettsville Federal Community Bank began savings for Christmas of 2023 at the beginning of November. Automatic contributions to the account can be set up on a regular basis. The owner of the account determines if the contributions are weekly, bi-weekly, monthly, or quarterly. Some account users set up direct deposit so that a portion of their paychecks are deposited into the account. Oftentimes the bank will pay interest on the balance in the account so that your savings will grow.
Towards the fall or end of the year, close to Christmastime, the money can be withdrawn to pay for all of your holiday purchases. Depending on who you have an account with, you can have your earnings mailed to you by check, or automatically transferred into your checking account. It is important to read the rules and details for your specific bank before opening the account, such as availability of funds or penalty for early withdrawal, if allowed.
When did Christmas Clubs originate?
Christmas Club accounts are designed with two practical purposes in mind. They encourage depositors to have the discipline to save money for Christmas spending and discourage them from withdrawing the money for other reasons. If you or your family have had Christmas Club accounts in the past, it’s not surprising, since these savings accounts go back generations.
These accounts became popular in the 1960s and 1970s. Today, they are more commonly offered through smaller local community banks. The first one was offered in 1909 by the Carlisle Trust Company in Pennsylvania. These accounts have stood the test of time because holiday spending returns year after year.
What are 4 benefits of opening a Christmas Club savings account?
- Christmas Club accounts allow consumers to manage their finances and be prepared for the holiday season.
- Community banks are typically the banks that offer these types of accounts. They are smaller banks that know their customers well. They are more interested in the overall financial health of their customers.
- Having this money in a separate account from regular savings makes it easier to avoid touching these funds and spending them accidentally. Since this money may have early withdrawal penalties, you are much less likely to dip into this money.
- Shoppers that use Christmas Club accounts avoid creating and accumulating credit card debt when holiday shopping.
Contributing to a Christmas Club savings account is an easy way to develop positive spending and savings habits. Spreading out the expenses across the entire year makes the holidays much more manageable.
There is so much stress in our lives these days, especially with inflation at an all-time high. Celebrating the holidays with loved ones doesn’t have to contribute to that stress. Christmas Clubs are an excellent way to save money and keep your budget in check.
Jarrettsville Federal Savings and Loan put down roots in the community in 1869 as a strong, stable financial institution. Over the years, we have developed relationships that span generations. Our 153-year tradition of community banking helped us to grow. Today, we continue to thrive, with checking, savings and loan products that meet our customers’ needs, technology that brings us into the future, and community service that gives back to our customers.
At Jarrettsville Federal Community Bank, our Christmas Clubs make saving easy. Christmas Clubs for next year began on November 2, 2022. Weekly deposits allow you to watch your holiday budget grow.
- Save $2, $5, $10, or $20 weekly increments
- Checks are issued at the end of October
- Accounts do not allow for early withdrawal
- Free gift with new account while supplies last
Why stress about the holidays? Check out our website for more information. Or contact us at 410-692-5151 and speak with one of our friendly staff with any questions you may have.