Picture it: Louisiana, December 1. You’re scrambling to save money for Christmas presents, and you’re worried that you don’t have enough in your savings account to get everything you need to buy. If you’re pulling from your monthly allotted budgets, money will end up being a little tight for your family until January so that you can get your shopping done. With a Christmas Club savings account, this wouldn’t have been an issue.
A Christmas Club account is a type of savings account that allows you to put money away for Christmas spending. This eliminates all of that scrambling so that you don’t have to try and find ways to save money on last-minute Christmas shopping.
How does a Christmas Club account work?
With a Christmas Club account, you can prepare for the holiday season by saving money throughout the year. You work with your credit union to set up automatic transfers that go directly into this savings account, so it builds each month without even thinking about it. If you need to withdraw the money you can do so, but there’s a penalty for early withdrawal.
Money from your Christmas Club account is automatically disbursed the first week of November each year, or you can also choose to keep the money in the account for next year. This lets you have your Christmas budget on-hand without having to scramble in November and December.
What are the benefits of having a Christmas Club account?
A Christmas Club isn’t a normal savings account, and Pelican’s Christmas Club accounts come with all sorts of benefits for members, such as:
- No monthly service fee
- No minimum opening deposit or minimum balance required
- Dividend rates far above national average
- Dividends are paid on the entire balance at maturity
You also get peace of mind for Christmastime knowing that you’ll be able to check off most of the things on Santa’s list.
Is a Christmas Club account right for me?
This isn’t a yes or no answer; it completely depends on the type of saver you are. If you’re diligent enough to save each month without spending what you’re saving, then this will make saving money even easier for you. You’re able to set aside your money without even thinking about it, and you don’t have to worry about an early withdrawal penalty.
If you’re the kind of person who needs access to your savings for peace of mind, then you might not be a good person for a Christmas Club account. Save your money in a regular savings account at your current financial institution or put it away in a savings account somewhere else so that you’re less likely to withdraw it.
Another option is to start out with a high interest savings account and set up automatic drafts for your account to build up your savings. This is the same premise as a Christmas Club account, only there’s not a penalty when you make a withdrawal.
Be honest with yourself about the kind of saver you are and have a goal of the type of saver you’d like to be. This should help you further decide if a Christmas Club account is right for you.
When do you start saving for Christmas shopping, and what tips do you have for others looking to save money? Let us know in the comments below!