Banks That Offer Christmas Club Accounts

The holiday season is a time for friends and family to make memories, throw parties, and exchange gifts. But being on a tight budget can quickly put a damper on that festive feeling and make holiday shopping for your loved ones all the more difficult.

If you haven’t planned and set money aside for the increased holiday spending, you might wonder how you will make ends meet. Or worse still – you might face a lot of credit card debt come January. That’s where Christmas club accounts come in.

Christmas club accounts were designed to encourage customers to save small amounts of money annually. In turn, this can help manage the financial stress of the holiday season.

If you’ve never heard of a Christmas club account before now, you’re certainly not alone. Many banks and credit unions discontinued these holiday savings accounts over the past few decades, opting for alternative short-term savings accounts. However, some still keep them to motivate customers to save up before the holidays.

So, which banks offer Christmas Club accounts? Keep reading to find out more.

What is a Christmas Club Account?

A Christmas club account is a short-term bank account with penalties and restrictions on withdrawals to discourage you from spending your savings before the holidays come around. These accounts are also structured to encourage customers to save a little bit at a time.

How Do Christmas Club Accounts Work?

Small deposits are usually made weekly or monthly by direct deposit or auto-draft from your checking account, so you won’t have to think about it. All you’ll need is your account number and routing number, and you’ll be all set.

The idea here is to impact your day-to-day spending as little as possible while allowing you to build a small nest egg by the end of the year.

Rules & Restrictions

The rules that come with these types of accounts vary from one financial institution to another. One thing most of them have in common is penalties should you withdraw funds before the stipulated date.

Remember that interest rates on Christmas club accounts are usually lower than those offered for regular savings accounts.

The discrepancy in interest rates is because banks target people who want to keep a portion of their savings specifically for the holidays. It’s essential to consider the withdrawal restrictions to reduce the temptation of dipping into funds before the holidays.

Once the cut-off date for the penalties and withdrawal restrictions on the account has lapsed, you can spend your savings and any interest you’ve accrued penalty-free.

Best Christmas Club Accounts for 2024

Your best options for Christmas club accounts are small community-based banks or credit unions, which are usually more focused on their customers’ financial health and less on their bottom line. As a result, they are more likely to have accounts tailored to these specific customer needs.

Here are some banks and credit unions that are offering Christmas club accounts:

1. American Bank & Trust Christmas Club Account

  • Monthly fee: $0
  • Minimum opening deposit: $10
  • Early withdrawal penalty: $20

The Christmas club account offered by American Bank & Trust comes with plenty of ways to make setting money aside easier to save for the holidays.

Here are the features of the American Bank & Trust Christmas Club Account;

  • Set up weekly or monthly automatic transfers from your checking account
  • Option to make manual deposits in person
  • Bank My Change, which rounds up your purchase to the nearest dollar and saves the change in your Christmas Club account

2. Consumers Credit Union Christmas Savings Account

  • Monthly fee: $0
  • Minimum opening deposit: $5
  • Early withdrawal penalty: CCU will close the account if you withdraw funds early

You must be a member of the Consumers Credit Union to open the Christmas Savings Account they offer.

Here are the features of the Consumers Credit Union Christmas Savings Account:

  • Open an account online or at one of their locations in person
  • Can set up automatic transfers or direct deposit
  • Funds transfer to your Share Savings Account (the account all members need) on November 1
  • The account automatically renews each year

3. Pen Air Christmas Club Account

  • Monthly fee: $0
  • Minimum opening deposit: $25
  • Early withdrawal penalty: $10 if you withdraw before November

PenAir is a credit union that’s open to anyone who lives, works, attends school, or worships in 17 counties, starting in Mobile County, Alabama, to Leon County, Florida, and they offer a Christmas Club account to make saving for the holidays easy.

Here are some of the features of the PenAir Christmas Club Account:

  • Open an account online or in person
  • Can set up automatic transfers
  • Can access funds penalty-free after November 1st

4. Security Service Club Savings Account

  • Monthly fee: $0
  • Minimum opening deposit: $5
  • Early withdrawal penalty: Closes the account

Security Service Federal Credit Union offers a Club Savings Account to its members. Membership to this Credit Union is limited to people living, working, or volunteering in Texas, Colorado, and Utah, along with those with an established affiliation to the Security Service.

Their Christmas Club account is called a ‘Club Savings account’ and can be used for any savings purpose, including the holidays.

Here are some of the features of the Security Service Club Savings Account:

  • Can make deposits any time
  • Funds automatically transfer to a Basic Savings Account on November 1st
  • Earns a competitive interest rate

Keep in mind if you withdraw funds before October 31st, not only will they close your account, but you will forfeit any interest earned for that month.

How to Choose the Best Christmas Club Account

  • Interest rate. The slightest increase in interest rate percentage and the more often interest compounds, the more you’ll earn by the end of the account term. Always shop around to make sure you’re getting the best possible rates.
  • Depositing options. Make sure to opt for an account that accepts cash deposits, online transfers, and automatic transfers from your checking account. The more depositing options you have, the easier it is to ensure you don’t give in to the temptation to skip deposits.
  • Lower penalties. Christmas savings accounts or Christmas club accounts often have early withdrawal penalties. These penalties are meant to stop you from dipping into your savings before the account has matured. Should an emergency occur, having lower penalties or fewer restrictions will help ease the blow.
  • Read the fine print. Save yourself a lot of hassle and ensure you know the full details before committing to an account. Read the fine print and any disclosures on the financial institution’s website beforehand.

Pros & Cons of Opening a Christmas Club Account

Having an account specifically designated to help you save for the holiday season can have its advantages and disadvantages:


  • If you find it challenging to reach your savings goals, an account like this can help you save without feeling the pinch that comes with setting aside large sums of money in one go.
  • This type of account can motivate you not to dip into your savings before the holiday season. The penalties for an early withdrawal might force you to re-evaluate your spending habits to avoid paying the penalty to access your own money.
  • Having money put aside for the holiday season gives you peace of mind and can keep you out of credit card debt and away from overdraft fees.


  • Christmas club accounts typically have a low APY (Annual Percentage Yield) compared to CDs and other online savings accounts.
  • Most financial institutions have hefty withdrawal penalties for accessing your savings before maturity. You might have to pay a penalty fee, lose accrued interest, or potentially have your account closed for early access to your money in the case of an emergency.

Alternatives to Christmas Club Accounts

Here are a few alternatives to Christmas club accounts.

Online Savings Accounts

If you worry about the Christmas Club account’s early withdrawal penalties, consider opening a high-yield savings account online. You get similar features, including automatic transfers, but may earn a higher yield.

Online savings accounts have much more flexibility, even if they restrict you to six monthly withdrawals; there’s no penalty for withdrawing those funds as needed. Many high-yield savings accounts also compound interest more frequently than Christmas Club accounts, with some offering daily compounding.

¹Annual Percentage Yield (APY) is accurate as of 1/17/2024 and subject to change at the Bank’s discretion. The minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.

High-Yield CD

If you have a lump sum of money you can set aside for the holidays, you can open a high-yield CD with a maturity date that matches when you’d need the funds. For example, if you open it in January, you would look for a 6 – 9 month CD so you have the funds by the time holiday shopping begins.

CDs typically pay higher APYs than other accounts, but you pay a penalty if you withdraw the funds before maturity. Shop around for the best rates, as many banks run promotions for short-term CDs with six and nine-month terms.

Money Market Account

A money market account is a high-yield savings account with some checking account benefits. It has more flexibility than a traditional savings account or Christmas Club account.

MMAs often pay higher interest rates than savings accounts but allow the option to write checks or withdraw funds using a Visa debit card. There aren’t withdrawal limits or penalties on MMAs, but the ease of spending money can be a downside since you can easily access your funds, making it easier to spend the money before the most expensive season of the year begins.

Shop around to ensure you’re getting the best deal possible, and choose a reputable, FDIC-insured financial institution to protect your funds.

Whichever method of holiday savings you go for – be it a Christmas Club account, a regular savings account, or an envelope of cash – setting money aside is a good idea, and knowing which banks offer Christmas Club accounts can help you make a decision!

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