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Are Christmas Savings Accounts Worth It?

We don't think so. Let us explain...

Banks and credit unions offer Christmas Savings accounts (also known as Christmas Club accounts). They’re designated accounts that allow you to automatically save until the shopping seasons begins. Think of it as an early Christmas present that’s supposed to surprise the heck out of you. We wanted to make sure you knew the pros and cons…


  • Set specific goals for holiday spending

  • Automate deposits (don’t have to think about it)

  • Save throughout the year


  • Account limitations (such as minimum deposits and savings caps)

  • Money is locked up (some have early withdrawal fees)

  • Super low interest rates (earn more storing savings in another account — like a CD)

  • Extra account to manage

  • Closing account may void interest

What Are Christmas Accounts Used For?

  • Gifts

  • Holiday hosting

  • Holiday dinner

  • Holiday travel

Who Are Christmas Accounts Good For?

  • People who need help saving

  • People who may overspend or go into debt for the holidays

  • People lured in by clever marketing

Christmas accounts were started on the idea that having a separate account will make it less tempting for you to touch and easier for you to save. They’re marketed as a way to “stock up for the holidays.” But with mobile and online banking, accessing different accounts is super easy with the click of a button. Investopedia says they were popular in the 60s and 70s, but we found less institutions having them. 

Do Christmas Accounts still exist?

Yes! And interestingly, all the accounts below are from credit unions. The following info is accurate as of Dec 18, 2023, but can change at any time. While we try our best to summarize each account, please refer to each financial institution for the official details.

Graph comparing different Christmas Club Accounts

CDC Federal Credit Union

CDC Federal Credit Union is based out of Atlanta, but if you work for Whole Foods or another one of their 100 Select Employees Groups -- you can join. They limit transactions to 6 per month and only charge a $10 early withdrawal fee. Learn more.

Metro Credit Union

Metro Credit Union is located in Boston and also requires you meet certain eligibility criteria to become a member. While you only need $10 to open their Christmas Club, you need $25 to start earning interest. It beats other club accounts in that the savings are transferred a month earlier - October 1st. Interest is compounded monthly, but if the account is closed interest is lost. Learn more.

Ascend Federal Credit Union

Ascend is based in Tennessee, is reserved for a specific set of people, and also requires a membership account. If you're eligible, it's the most appealing on this list as it has the highest rate and no penalty or limits. Learn more.

When Are Christmas Accounts Started?

According to Google Trends, Christmas Club account searches noticeably increase every December. Below is a graph showing the spikes in inquiries.

Google Trends Graph of Christmas Club Accounts Searches From 2004 - 2023

Screenshot of Google Trends Christmas Club Accounts Topic Search in U.S. from 2004 -2023

These searches tend to be extremely popular in New Zealand. For the U.S., Louisiana and New York also love them.

We're assuming most accounts are opened in January, just in time for New Year's resolutions. That way savers have 10 to 11 months to reach their goals.

What Are Modern Forms of Club Accounts?

Thanks to the rise of fintech (financial technology), there are more modern ways of saving. Special purpose accounts, supplemental accounts, and subaccounts are some of the products designed to designate funds for a specific goal. For example, account holders may save to pay their student loans or mortgage off early. Each institution may have a different name for these organizational tools. For example, Sofi calls them vaults and Ally calls them buckets. Despite these accounts not specifically being called Christmas accounts, they can definitely serve that purpose and have the potential to reach or surpass savings goals quicker. For example, say you want to save $200 a month for the holidays. Using the highest earning Christmas Savings account listed above, you'd only make $2.80 after 12 months (if the interest were compounded daily). You can save $1,923.93% more (that's $53.87) if you used a high yield savings account instead. Please know that some accounts compound interest monthly, quarterly, or yearly, which can decrease earnings.

Graph showing savings in a Christmas Club Account vs a High Yield Savings Account

We hope this demonstrates that where you store your money definitely matters, no matter what your goals are.

How Much Do Families Typically Spend During The Holidays?

$1,652 predicted per consumer in 2023, according to Deloitte's annual online survey. Below is a breakdown by income...

  • >$50k predict they will spend $742

  • $50k - $99k predict they will spend $1,534

  • $100k - $99k predict they will spend $2,167

  • $200k+ predict they will spend $3,922

Similar to any research study, these are the results of an extremely small sample and may not represent all consumers.

What Are Helpful Ways To Save During The Holidays?

  • Pay close attention to what your kids talk about so you’re only buying what they really want.

  • Only buy 1-2 gifts (per child)

  • Utilize cash back cards (some will save you up to 5% or more)

  • Take advantage of big sale days (i.e Black Friday, Cyber Monday, etc).

In conclusion, having a way to plan and organize savings is smart!! However, Christmas Savings accounts seem to have way too many restrictions and (we think) there are more beneficial ways to save.

Are you happy with how much your savings is making? Which digital tools do you use to save?

Until next time…

Love The Journey,

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