Christmas Club

AAA

DEFINITION of 'Christmas Club'

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.

RELATED TERMS
  1. Consumer Credit

    A debt that someone incurs for the purpose of purchasing a good ...
  2. Savings Account

    A deposit account held at a bank or other financial institution ...
  3. Early Withdrawal

    The removal of funds from a fixed-term investment before the ...
  4. Withdrawal

    Removing funds from an account, plan, pension or trust. In some ...
  5. Term Deposit

    A deposit held at a financial institution that has a fixed term. ...
  6. Short Term

    1. In general, holding an asset for short period of time. 2. ...
RELATED FAQS
  1. What are some of the well-known no-load funds?

    The capital adequacy ratio promotes stability and efficiency of worldwide financial systems and banks. The capital to risk-weighted ... Read Full Answer >>
  2. How do you calculate payback period using Excel?

    Each financial institution offers similar products for its banking customers, including savings accounts, certificates of ... Read Full Answer >>
  3. What formula can I use to calculate interest on interest?

    Use the compound interest formula to determine the amount of accumulated interest on the principal amount invested or borrowed. ... Read Full Answer >>
  4. What economic factors affect savings account rates?

    At a basic economic level, the interest rate set on savings account deposits is determined by the relationship between how ... Read Full Answer >>
  5. What is the rate of return I can expect on a savings account?

    Prior to the Great Recession, savings account rates offered by banks could typically be found in the 4 to 8% range, depending ... Read Full Answer >>
  6. How much money should I have in a savings account?

    Most financial advisers or budgeting experts recommend that individuals and households keep enough money in liquid savings ... Read Full Answer >>
Related Articles
  1. Investing Basics

    8 Gifts For Financial Geeks

    Put one of these unique offerings under someone's tree this year.
  2. Credit & Loans

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.
  3. Budgeting

    Tips For Avoiding A Holiday Spending Hangover

    You don't have to go into debt to have a happy and memorable holiday season. Use these tips for a bountiful Yuletide on a Scrooge-like budget.
  4. Budgeting

    Earn A Holiday Bonus Through Energy Savings

    You can enjoy the festive season without a jolly increase in your energy costs. We'll show you how.
  5. Budgeting

    Sneaky Strategies That Fuel Overspending

    Find out how to avoid six of the worst vender ploys this holiday shopping season.
  6. Economics

    Explaining Risk-Weighted Assets

    Risk-weighted assets is a banking term that refers to a method of measuring the risk inherent in a bank’s assets, which is typically its loan portfolio.
  7. Savings

    Understanding Savings Accounts

    A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
  8. Personal Finance

    How The SWIFT System Works

    SWIFT has become the global standard for processing instructions and messages for payment and securities trade transactions. Investopedia explains what SWIFT is, how it works, how it makes money, ...
  9. Savings

    Review: Discover Checking Account

    Will having a Discover checking account save you money? It will save you fees.
  10. Savings

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center