You have probably never even heard of a Christmas Club Savings Account. They are an account that helps you save for Christmas by allowing you to make direct deposits of your savings during the year but you can’t access the account without penalty until Christmas time, generally from the 1st of November. Christmas Club Savings Accounts were really popular in the 1970s and 1980s and are now becoming harder to find. The big banks no longer offer them but you can still find them with some of the smaller banks and credit unions. So are Christmas Club Savings Accounts worth it?
Well, the biggest pro for a Christmas Club Savings Account is that they allow you to start a regular savings habit for Christmas, while restricting your access during the year. Generally speaking most accounts allow you to access your money for free from the 1st of November until the 31st of January. You can set up a direct debit from your regular account when you get paid, straight to your Christmas Club Account. Even at $10 per week for a year you will have $520 by the time Christmas rolls around. Another pro is that these accounts generally have no account keeping fees and when you withdraw the money it does not have to be used on Christmas, the money can be used for bills or birthday presents, whatever you like.
The downside is that if you do need to access your money before the specified period you will be penalised. Each account has different rules around this so make sure you are aware of how your specific account works. Also, generally speaking, the interest rate on these accounts is not as good as other types of savings accounts.
So are Christmas Club Savings Accounts worth it? It depends what you are after, like all accounts there are pros and cons. If you are interested in a Christmas Club Savings account make sure you shop around for the one that suits you the most. And given each one is different make sure you understand all the terms and conditions of the one you choose. There are also loads of other ways to save for Christmas, apart from using a Christmas Club account so click here check to some of them out.
What is your favourite way to save for Christmas?
If you liked this post, you might also like:
The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances