NDSU Extension Service - Ramsey County


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Join the Club

Join the Club

            Anyone remember the "Christmas Club" accounts that were so popular in the '70s?   Due to  the recent down-turn in the economy “Christmas Club” accounts are once again popular and according to credit experts, they are a good idea for stretching those limited holiday dollars.

            The idea is simple: deposit a small amount into a special savings account on a regular basis and get a check at Christmas time to cover the annual gift-buying spree.

            According to the most recent available data from the American Bankers Association, about one-third of banks still offer a Christmas Club account.  From the banking industry's perspective, Christmas Clubs aren't about profit. They involve too little money deposited for too short a time, but many banks see the accounts as a worthwhile customer service.

            Here are some tips to make a Christmas Club account work for you:

·         Shop around. If a bank or credit union is going to be holding onto your money for an extended period of time, you deserve to be compensated. Check around to find a banking institution that offers interest on club accounts.

·         Know the terms. Often club accounts have a specific withdrawal date. Find out what the policy is at your chosen institution. Is there a possibility of early withdrawal or a penalty if you?

·         Make it easy. Set yourself up for success by making the savings process as simple as possible. Set up direct deposit to your club account through your employer or set up an automatic transfer through your checking account. Then forget about the money until you need it at Christmas

·         Give your account a name and a goal.  If you manage your bank accounts online, go ahead and set up a nickname for your club account. Tag it “Christmas” or “Cruise” or something similar, and you’ll have a visual reminder of what the money is for each time you log into your account. You’ll be amazed at how this can motivate you to save and discourage you from borrowing from the account.

·         Evaluate yearly. Total up your Christmas expenses each year to determine if you’re saving enough.  If not, adjust your deposit amount to reflect the new total that you’ve arrived at.

·         Save as a family. Teach your kids about savings by setting up a club account in each of their names. Then encourage them to make regular deposits throughout the year. Review their bank statements with them regularly to keep them motivated.



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