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What Is A Christmas Club Savings Account?

Americans planned to spend roughly $833 on gifts, food, and decorations in 2022, according to the National Retail Federation (NRF). If you haven’t saved in advance for that holiday spending, it can be hard to budget for out of your regular paycheck. That’s why Christmas Club Accounts have been a longtime customer favorite. In this article, we’ll break down what a Christmas Club is and how it can make holiday budgeting easier.

What type of Account is a Christmas Club Account?

A Christmas Club is a type of savings account. It works a little differently from the typical personal savings account, though.

With a Christmas Club, you earn interest on the deposits you make throughout the year. Each fall, typically by the end of October, you receive a check for your total Christmas Club balance. This provides a lump sum for your holiday shopping on gifts, food, and decorations.

Although holiday-themed in name, some people use Christmas Club accounts to save for vacation or major purchases. The main benefit is being able to “set it and forget it” for a period of time and then receive a lump sum of cash to use for the intended purpose instead of going into debt. 

Benefits of a Christmas Club Account

Now that you understand how a Christmas Club works, let’s take a closer look at the benefits of having one.

You save all year.

  • Instead of budgeting right after Thanksgiving, you already have money saved up.
  • Though it’s still important to budget what you have saved.
  • What you spend can help you determine whether you should increase your contributions for next year’s savings.
  • You decide how much you want to save.
  • You can automate savings.
  • Check your balance and manage your account online with online and mobile banking.
  • By saving all year, you can avoid racking up massive credit card debt.
  • You can go into the new year in a healthier financial position.

You get paid just in time for the holidays.

As mentioned, a Christmas Club saves you the trouble of having to create or adjust your budget during the holiday season. As your account matures just in time for Christmas, you will receive the funds.  If you have a First Exchange Checking account, the money from your Christmas Club account will be transferred to that account upon maturity for convenient access to your funds.

Earn Interest

  • Christmas club savings accounts are also interesting savings accounts.
  • You get paid to save your money for the holidays.
  • Interest can be higher than traditional savings accounts.

Low Opening Balance

  • Minimum required opening balance of $10.
  • These accounts often have no service charge.

Disadvantages of a Christmas Club Account

Because the whole purpose of a Christmas Club Account is to save for your holiday shopping, these accounts may have early withdrawal penalties.

  • May not be ideal for someone who starts their shopping earlier than usual or wants to shop in bits and pieces throughout the year.
  • For long-term savings goals, consider a Personal Savings or Money Market account.
  • A Christmas Club should not be a substitute for a regular savings account or an emergency fund.

When to Open A Christmas Club Savings Account

While you may be thinking about a Christmas Club account during the holiday shopping season, the best time to open one is after the holidays, at the beginning of a new year. Open your Christmas Club account during the first or second quarter of the year when you’ll have time to save. If you’re in North Central West Virginia, you can open a Christmas Club account at First Exchange Bank. Visit your nearest branch location in White Hall, Mannington, Fairmont, Morgantown, Hundred, or Fairview.


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