Are Christmas Club accounts making a comeback?
A Christmas Club account is a special savings account with no or a low minimum balance that is used specifically to save for Christmas shopping. With this type of account, weekly or bi-weekly deposits are typically set up to be automatic from your checking account. You might wonder why this would be any different than a regular savings account? With a Christmas Club, you are saving with a specific goal in mind and the entire balance plus interest will transfer to your checking account in October or November so you can do your Christmas shopping with the money saved. Then you start all over for the next year!
The first “Christmas Club Account” was started by Dime Savings of Toledo, OH in 1922. These types of accounts were popular until the late 70’s, early 80’s. In the last few years, Christmas Clubs are making a comeback as people become more conscientious about savings and credit card debt. About 72% of Credit Unions offer Christmas Clubs, however, not a lot of banks offer a product like this. Offering club accounts could be a great opportunity for community banks to grow their customer base.
Other types of club accounts that financial institutions offer include “Vacation Clubs” to save for vacation and “Property Tax Clubs” to save for real estate taxes. The balances plus any interest on these types of club accounts would be paid out in April.
Check out this Club Account Finder for a Banks or Credit Unions near you that offer a type of club savings account. Please contact Peak at firstname.lastname@example.org for more information on implementing club accounts.