The concept of a Christmas club or holiday club savings, once a common feature at banks, has almost disappeared in recent years. This is because the banks do not make significantly enough money off of the process to justify offering this service to their clientele. So who still offers a Christmas club savings plan?
Citizens Bank still offers this service at a minimal rate because they require a person to make it least a $10.00 deposit per week from their salary or other deposits in order to be active in the club. The majority of businesses that still offer this option require a person to wait for December 1 or later in order to access their money or they wind up paying a penalty. The majority of people find this to be difficult because they are often worried about their financial future and want access to their money.
The yield rate on these holiday-centric accounts is significantly less than traditional savings accounts, because they are short term and intended for a specific purpose. Citizens Bank does not offer these options in all areas where the bank offers service. Therefore it is important for individuals to verify that their local bank branch offers this kind of service. The minimum weekly deposit is also important for people to consider because they may wind up forfeiting their money if they do not meet the minimum requirements.
TD Bank
This bank still offers a Holiday Club account. As these are smaller accounts, the interest rates on the accounts are generally lower than the typical amount of interest you would get with a traditional savings account. With TD Bank’s traditional holiday club option for individuals who are looking to save up for the holiday season, the release is usually between Black Friday and the 1st of December. The bank does have specific limitations on the amount of money which can be saved in the account. Customers also have a deadline by which they must make their initial deposit in order to qualify for the service. There are stiff penalties for individuals who choose to remove their money from these accounts earlier than suggested.
Many people also choose to use CDs that are timed for release around the holiday season as a substitute for traditional Christmas club offerings and as a way to maximize the return on their investment.
Local Credit Unions
Many local credit unions in the Midwest as well as the New England area offered these types of holiday savings accounts in order to maintain business. Credit unions are struggling nationwide in order to keep customers in the face of larger banking institutions becoming a monopoly. Therefore many smaller lending institutions such as credit unions try to offer a more personal touch through offering Christmas clubs and other more traditional offerings in order to help with customer retention efforts.
The willingness of customers to stay with a smaller lending institution also pays off because many credit unions do not have a minimum investment amount for individuals who want to take advantage of the Christmas club offerings. Instead customers are able to put money into the accounts whenever it is convenient for them to do so. This is advantageous for people who do not have the ability to make a weekly commitment to the process of savings for the holiday season but still want the option of a Christmas Club account.
If you can find a Christmas Club account at your bank or credit union, it may be worth opening in the year to come. The decision to make an investment in the holiday season all year long can help to reduce stress and help you enjoy a happier holiday!
