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.

  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  2. Consumer Credit

    A debt that someone incurs for the purpose of purchasing a good ...
  3. Checking Account

    A transactional deposit account held at a financial institution ...
  4. Savings Account

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

    The removal of funds from a fixed-term investment before the ...
  6. Short Term

    1. In general, holding an asset for short period of time. 2. ...
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