Christmas Club

What Does Christmas Club Mean?
A short-term savings account that usually pays out the full account balance to its account holders once each year, right before Christmas. Christmas club accounts pay depositors monthly interest on their account balances and often punish early withdrawals by retracting interest earned if money is taken out before a given date.

Investopedia explains Christmas Club
Because of the tremendous pressure put on people to save money for Christmas spending and the debt loads that consumers incur just before the holidays, many financial institutions offer their customers Christmas club accounts. Usually, Christmas club accounts offer systematic savings through automatic withdrawal upon deposit of paychecks to a checking account.

Filed Under: Banking, Personal Finance

Related Terms

Checking Account
Consumer Credit
Early Withdrawal
Emergency Fund
Savings Account
Short Term
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Withdrawal
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