Christmas Club

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.

BREAKING DOWN '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.

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RELATED FAQS
  1. How can I find an investment club in my area?

    Investment clubs have been around for several decades and are simply groups of people who get together to invest. While the ... Read Answer >>
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  3. How is a savings account taxed?

    Read about the taxation of interest income on personal savings accounts, how the tax is calculated, and how to report savings ... Read Answer >>
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    Examine the consumer electronics sector and learn what typical seasonal sales patterns can be identified for this important ... Read Answer >>
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