December 02, 2014
The holidays have come and passed and though we have fond memories of the time spent with family and friends, it’s likely we all feel the hit our checking accounts took to celebrate this joyous time. If only money weren’t an object!! There are ways, however, to counteract extra spending for the holidays by preparing for it ahead of time with a Christmas Club bank account—and you should get one started soon!
Christmas Club Accounts
Though Christmas Club accounts can be found at many financial institutions, they’re not always a well-known product or overly advertised. A Christmas Club account is a type of savings account designed to help you tuck away money throughout the year to save up for buying Christmas presents, or to treat yourself to some other gift (travel, entertainment, etc.).
There are a couple of features about Christmas Club accounts that make them more beneficial than an average savings account. First, there may be a higher interest rate offered with a Christmas Club account so you can get a little more bang for your buck without contributing anything extra! Second, because a Christmas Club is designed to help you save money, there are generally restrictions on withdrawing from the account before a certain date (don’t worry—usually funds are released before Black Friday!)—for those of us who feel money burning holes in our wallets, this is a great feature!! If an unplanned expense or emergency arises, you can withdraw your money ahead of time; however, you may forfeit the interest accrued or pay a fee.
This isn’t a complex idea, but we sometimes forget how money can add up (whether we are spending or saving). Take a look at the table below—this is assuming you open up a Christmas Club account at the beginning of the year and deposit into it every week (besides the week of Christmas):
(after 51 weeks)
|$5.00 / week||$255.00|
|$10.00 / week||$510.00|
|$20.00 / week||$1,020.00|
|$30.00 / week||$1,530.00|
Without even adding interest, you can see how a little commitment each week can make a big difference by the holiday season! Start saving now—ask your local financial institution about a Christmas Club account and take advantage of all that saving money has to offer.
By: Jennifer Guderjahn, Personal Banker