Table of Contents
Are you toying with the idea of opening a Christmas Club account? It may sound like a retro idea, but a Christmas Club (or Holiday Club) account is simply a short-term savings fund that can help you plan for and manage the annual spending blizzard. The strategy can be smart. During the most recent holiday season (November 1 through December 31, 2025), retail sales were projected to reach a whopping $1.01 trillion-$1.02 trillion, representing a growth of 3.7%-4.2% over the 2024 season, according to the National Retail Foundation. Pacing yourself to save in advance of the holiday crush is great, but there can be pros and cons to a Christmas Club account. Learn the details here.
Key Points
• Christmas Club accounts date back to 1909 and were created to help people save gradually for holiday expenses, reducing the need to take on debt during the festive season.
• These accounts usually require small or no minimum deposits and involve regular contributions that are released near the holidays for planned spending.
• Although they typically offer low interest rates, Christmas and Holiday Club accounts can help enforce disciplined saving and prevent overspending on credit cards.
• Early withdrawals often come with fees, encouraging users to leave their savings untouched until the designated payout period.
• While useful for budgeting, these accounts may have savings caps and could be less flexible or rewarding than alternatives such as high-yield savings accounts or certificates of deposit.
What Is a Christmas Club Account?
Christmas Club accounts, which started in 1909 at a Pennsylvania bank, are designed to help you save money for holiday expenses. They typically don’t earn high interest but can help you pull back your purse strings and avoid debt when December comes along.
After you make regular, scheduled contributions to the Christmas account, you can withdraw the money, typically in October, November, or December, depending on your bank’s rules. Christmas Club funds are transferred to your regular checking account with the bank or withdrawn in a check to cover your holiday expenses, be they toys, trimmings, or latke parties.
Saving in increments can be easier on your budget than scrambling for cash when Yuletide, Hanukkah, and Kwanzaa come around. It can also spare you from putting all those charges on your credit cards and having a high balance.
đź’ˇ Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.
How a Christmas Club Account Works
When you sign up for a Christmas Club account, you start with a deposit. Rules and regulations vary by bank. Many Christmas or Holiday Club accounts have no minimum deposit requirement or a very low minimum, often $0-$10. Others may require an initial deposit of $10-$50.
You get to decide the amount you want to contribute regularly. For instance, you might opt for $25 or $100 transferred from your checking account to your Christmas account every week or payday.
Historically, banks have charged fees for withdrawing money before the club account matures. This encourages customers to leave their money there until holiday shopping time. Just be aware that if an emergency comes up, such as a broken water heater, and you take the money out, you’ll get hit with a fee.
Increase your savings
with a limited-time APY boost.*
Reasons to Use a Christmas Club Account
There are several benefits to Christmas Club accounts that can make them a helpful financial tool. Here are some of the reasons why people open them.
• To save for a predictable spend above and beyond your year-round monthly budget: Many of us try to celebrate the holidays on a budget. But the gifting/decorating/entertaining spree can still hit every winter. A club account plumps up a money cushion to help you avoid credit card debt.
• To afford holiday travel: Most of us need extra dough to rent a car to visit family or fly the kids home from college. To score the lowest airfare, car rental, and lodging costs, brush up on smart tips for finding travel deals. (If short-term savings won’t cover your or your loved ones’ trip, shop for the best travel loans with lower annual percentage rates, no compounding interest, and no fees.) Stashing funds in a club account, of course, is a viable solution.
• To build up funds for other planned annual costs: Just because they’re called Christmas Club accounts doesn’t mean they have to be used for holiday spending. Puzzling over how to save on spring break expenses or how to pay for your child’s summer sleepaway camp? In those cases, a club account can be golden.
Where Can You Find a Christmas Club Account?
Christmas Club accounts are most often available at smaller community banks and credit unions vs. banks with a national presence. You can open one in person at a branch or online at your bank’s website — search under savings accounts. Often, the same banks that set up payroll direct deposit plans also offer short-term club accounts.
Christmas Club accounts are offered at credit unions all across America, from the Fidelity Bank and Trust in Iowa to the Pasadena Federal Credit Union in California, and in too many places in between to count.
Pros of a Christmas Club Account
If you’re trying to decide if a Christmas Club account is right for you, it’s worthwhile considering the advantages of these accounts.
Simplifies the Process of Saving for the Holidays
Framing your holiday budget ahead of time can cut stress. Pacing yourself to save over months may be even better. If it helps, you can give these targeted accounts nicknames to keep your eye on the goal — say, “Christmas in Vermont” or “Kids’ Lego Fund.”
Alternative to Putting Holiday Purchases on Credit Card
Using Christmas cash can help you avoid overspending with credit cards. Once you turn to plastic, things can get out of control. You start hunting online for a scooter a child has her heart set on and then see an ad for the brown suede boots you’ve been wanting … ka-ching. Interest rates on credit cards are quite high, and you can be left with debt that takes a long time to pay off.
Recommended: How Does a Credit Limit Work?
Cons of a Christmas Club Account
It’s not all a winter wonderland. Christmas Club accounts can have downsides. Here are a few to consider.
Most Banks Have Saving Limits
Most Christmas Club accounts have a maximum dollar amount you can save ($15,000, for example), but this number will vary. The cap might be less than what you’d like to save. If need be, consider opening a second Christmas Club account if the bank allows it, or open one at another bank.
Potential Fees for Early Withdrawal
If you need to get the money out before the set withdrawal date, you’ll most likely incur early withdrawal fees. These can vary. Find out what they are when you open your account.
Alternatives to Christmas Club Accounts
If you want to save money for the holidays but aren’t sure a Christmas Club account is right for you, consider these options.
• Certificate of deposit: A certificate of deposit (CD) generally offers a higher interest rate than a savings account but comes with a term. The bank holds your money for anywhere from months to years, and you collect the interest when the CD matures at the end of the term. Since a CD will lock up your money for a specific amount of time (typically between 3 months and 5 years, but some institutions offer terms as short as one month or as long as 10 years or more), you may need to plan this right to have funds available for holiday expenses.
• Money market account: A money market account is an interest-bearing account that is federally insured and has competitive interest rates. It generally requires a higher opening deposit.
• High-yield savings account: These high-yield bank accounts earn significantly more interest than standard savings. You may find higher rates at online banks compared to brick-and-mortar banks. However, the accessibility of these funds can be a downside. We all know how tempting it can be to transfer money from savings to checking when an unexpected household expense or special occasion comes up.
• Travel account: Like Christmas accounts, these savings accounts likely won’t pay great interest, but they help you save for your goal. You can pick where to keep travel fund savings and then use the money to hop on a plane when the holidays roll around.
The Takeaway
Christmas Clubs (or Holiday Club accounts) can spur you on to save regularly for the winter holiday spend. Planning ahead reduces stress. What’s more, setting a savings goal can help you keep your eye on the limit and avoid credit card overspending. But beware of fees for early withdrawals and caps on the total amount saved. In some cases, you might be better off with another savings vehicle, such as a CD or money market account.
Another option is to stash cash in a high-yield account and earn more interest there.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Do banks still do Christmas Club accounts?
Yes, community banks, smaller banks, and credit unions still offer Christmas Club accounts. Ask at your branch or search the bank’s website.
Are Christmas Club accounts worth it?
Christmas Club accounts generally have low interest rates. However, they can be worthwhile if they help you put money away regularly and thereby avoid a holiday spending blowout using credit cards.
Is there interest on Christmas Club accounts?
Yes, most accounts offer interest. The rates, though, tend to be lower than the interest rates for regular savings accounts, money market accounts, and certificates of deposit.
Photo credit: iStock/NoSystem images
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBNK-Q126-094