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. Term Deposit

    A deposit held at a financial institution that has a fixed term. ...
  3. Savings Account

    A deposit account held at a bank or other financial institution ...
  4. Short Term

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

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

    Removing funds from an account, plan, pension or trust. In some ...
Related Articles
  1. 8 Gifts For Financial Geeks
    Investing Basics

    8 Gifts For Financial Geeks

  2. What's On A Consumer Credit Report? ...
    Credit & Loans

    What's On A Consumer Credit Report? ...

  3. Tips For Avoiding A Holiday Spending ...
    Budgeting

    Tips For Avoiding A Holiday Spending ...

  4. Earn A Holiday Bonus Through Energy ...
    Budgeting

    Earn A Holiday Bonus Through Energy ...

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center