Christmas Club Accounts: What They Are & Why They're a Great Idea
It’s still spring, so holiday shopping probably feels like a long way off—let alone the idea of opening a Christmas Club account. But if you’re like a lot of people, you might still be paying off last year’s gift-giving. In 2024, a third of Americans took on debt during the holiday season, according to LendingTree.
The good news? You can break that cycle—and the perfect time to start saving is now, months before the first Black Friday sales begin.
For over a century, savers have relied on Christmas Club accounts—also known as holiday savings accounts—to help them set aside enough money for the season’s expenses. They’re still a great option today.
What Is a Christmas Club Account?
A Christmas Club is a type of savings account. Unlike a regular savings account, the money you deposit isn’t available for immediate withdrawal. Instead, you can access it later in the year, closer to the holiday season.
The first Christmas Club was established in 1909 at the Carlisle (PA) Trust Co. That year, 350 people saved about $28 each—equivalent to $984 today. While the specifics vary by institution, most holiday savings accounts today allow you to set up automatic transfers from a checking or savings account to build consistent savings. Many also pay interest on your balance.
Benefits of a Christmas Club Account
- Plan ahead for holiday spending instead of scrambling at the last minute
- Automated deposits ensure consistent saving
- Helps keep holiday spending in check
- Time-restricted withdrawals mean the money will be there when you need it
- No minimum balance requirements
- Earn interest on your savings
Saving at Adirondack Regional Federal Credit Union
Adirondack Regional offers members several ways to save, including traditional savings accounts, high-yield savings accounts, share certificates, and Christmas Club accounts.
“Our Christmas Club plans offer a simple, set-it-and-forget-it way to save,” said Basel Farhat, President and CEO of Adirondack Regional FCU. “If your paycheck is direct deposited into one of our checking accounts, you can easily schedule automatic transfers to your Christmas Club account every pay period. Plus, accounts with a balance over $100 earn interest, helping your holiday savings grow even faster.”
In fact, members can arrange for automatic transfers from any account to a Christmas Club plan. “For many people, having a separate savings account specifically for the holidays helps improve financial organization and encourages disciplined saving throughout the year,” Farhat added.
The savings can really add up: If you start saving $20 a week today, you’ll have $520 by October.
At Adirondack Regional, funds in Christmas Club accounts are available on or after October 15 each year. While you can access your balance sooner if necessary, many plans assess a fee to do so, or charge the accrued interest. At Adirondack Regional, there is not a penalty for early withdrawal.
Alternatives to Christmas Club Accounts
Christmas Club plans offer a time-honored way to save for the holidays, but other options might suit your needs better. For example, Christmas Club accounts typically offer lower interest rates than some alternatives. Fixed-term accounts like certificates of deposit or share certificates usually offer higher rates, though you may have to leave your funds untouched for longer. Or, if you can set aside a larger sum upfront, a high-yield savings account could be a good fit.
Other Reasons You Might Consider a Different Option
- You shop for holiday gifts gradually throughout the year
- You need more flexible access to your savings
- You're looking to build a long-term savings plan
- You plan to save more than the maximum allowed in a Christmas Club account (some have limits)
Take the Next Step
Christmas Clubs aren’t as common as they once were, but many local credit unions and banks—including Adirondack Regional FCU—still offer them. To find out if a Christmas Club account is right for you, reach out to Adirondack Regional today.