Christmas club accounts are now rare, but a handful of banks and credit unions still offer them
A Christmas club account is a savings account designed to help you set aside money throughout the year for holiday spending. You deposit a fixed amount each week or month, and the bank holds the money separately so you're less likely to spend it. When November or December arrives, the bank releases the full balance to you as a lump sum.
Most major national banks discontinued these accounts in the 2000s and 2010s because online savings accounts and automatic transfers made them unnecessary. But some regional banks, credit unions, and smaller institutions still offer them, often with modest interest rates and no monthly fees. If you want the structure and discipline of a dedicated holiday fund without managing it yourself, they still exist—you just have to look for them.
Key Takeaways
- Christmas club accounts are offered primarily by credit unions and regional or community banks, not by major national chains like Bank of America or Chase.
- The account locks your money until a set date in late fall or early winter, which prevents you from withdrawing it for other purposes.
- Interest rates on Christmas club accounts are typically very low—often 0.01% to 0.05% APY—so the real benefit is the forced savings structure, not earnings.
- You can achieve the same result with a regular savings account and automatic monthly transfers, which gives you more flexibility and sometimes better rates.
Where to find Christmas club accounts today
Credit unions are your best starting point. Many credit unions, particularly smaller ones and those serving specific communities or industries, still maintain Christmas club programs. Examples include Navy Federal Credit Union, which offers a Christmas Club savings product, and various local credit unions in your state. Call your credit union directly or check their website under "savings accounts" or "special savings programs."
Regional and community banks are the second source. Banks with a presence in one or two states—rather than nationwide—are more likely to keep these accounts because they serve customers who value the structure. You can search your state's banking directory or call banks in your area and ask whether they offer a Christmas club or holiday savings account.
Online banks almost never offer Christmas club accounts because their entire model is built around self-directed savings and transfers. If you bank with an online-only institution, you won't find this product there.
How Christmas club accounts actually work
You open the account and commit to depositing a set amount each week or month—typically $10, $25, $50, or $100. The bank automatically deducts this from your checking account on a schedule you choose. The money sits in the Christmas club account and earns minimal interest, if any.
In October or November, the bank notifies you that the account is about to mature. You receive the full balance—your deposits plus any interest earned—either as a check, a transfer to your checking account, or cash. Some banks allow you to withdraw early, but they may charge a penalty or reduce your interest. Once you withdraw the balance, the account closes, and you can open a new one the following year if you want to repeat the cycle.
The key restriction is that you cannot make withdrawals during the savings period. This is the entire point: the account forces you to leave the money alone. If you need the money before the maturity date, you have to contact the bank and request an early withdrawal, which may cost you.
Interest rates and fees on Christmas club accounts
Interest rates on Christmas club accounts range from 0.01% to 0.05% APY at most institutions. A few credit unions offer slightly higher rates—up to 0.10% or occasionally 0.15%—but these are exceptions. For comparison, a standard high-yield savings account currently pays 4% to 5% APY, so the interest earnings on a Christmas club account are negligible.
Monthly maintenance fees are rare. Most banks waive fees on Christmas club accounts because the account is temporary and the balance is small. However, some institutions may charge a fee if you withdraw early or close the account before the maturity date. Always ask about early withdrawal penalties before you open the account.
The real cost of a Christmas club account is the opportunity cost: your money earns almost nothing while it sits there. If you deposited $50 per month for a year into a Christmas club account at 0.05% APY, you would earn about $0.15 in interest. In a high-yield savings account, you would earn roughly $30. That difference matters if you have other savings goals.
Christmas club accounts versus automatic transfers to savings
You can replicate the Christmas club structure using a regular savings account and automatic transfers. Set up a monthly transfer from your checking account to a separate savings account on the same day each month. The money accumulates just as it would in a Christmas club account, but you retain the option to withdraw early without penalty, and you can earn a much higher interest rate.
The trade-off is discipline. A Christmas club account forces you to leave the money alone because withdrawal is difficult or penalized. An automatic transfer to a regular savings account requires you to resist the temptation to spend the money. If you know you will raid the account for other purposes, the Christmas club's restriction is genuinely useful. If you can stick to a budget, the regular savings account is the better financial choice.
Some people use a hybrid approach: they open a Christmas club account at their credit union for the psychological benefit of a dedicated, locked account, and they also maintain a high-yield savings account for other goals. The Christmas club becomes a tool for behavioral change rather than a financial optimization.
How to open a Christmas club account
Contact your bank or credit union directly and ask whether they offer a Christmas club account or holiday savings program. If they do, ask for the following information: the minimum and maximum deposit amounts, the deposit frequency (weekly or monthly), the interest rate, any fees, the maturity date, and the early withdrawal policy.
You will need to provide identification and proof of address, just as you would for any savings account. Some banks allow you to open the account online; others require you to visit a branch or call. The process typically takes a few minutes.
If your bank does not offer a Christmas club account, ask whether they can recommend a credit union or partner institution that does. Some banks have relationships with credit unions and can refer you. Alternatively, search online for "Christmas club account near me" or contact credit unions in your state directly.
Frequently Asked Questions
Can I withdraw money from a Christmas club account before the maturity date?
Most banks allow early withdrawal, but they may charge a penalty or reduce your interest earnings. Some institutions waive the penalty if you withdraw only a portion of the balance. Always ask about the early withdrawal policy before you open the account, because the rules vary widely between banks and credit unions.
What happens if I don't withdraw the money when the account matures?
Policies differ. Some banks automatically transfer the balance to your checking account. Others hold the money in the Christmas club account and may begin charging a monthly fee if you don't claim it. Contact your bank to find out what happens at maturity so you don't miss the important date.
Do I earn interest on a Christmas club account?
Yes, but the amount is very small—typically 0.01% to 0.05% APY. A high-yield savings account pays significantly more. The real benefit of a Christmas club account is the forced savings structure, not the interest earnings.
Can I open multiple Christmas club accounts at the same bank?
Some banks allow it; others limit you to one per year. If you want to save for multiple purposes—holiday gifts, a vacation, a down payment—ask your bank whether you can open separate accounts or whether you should use a regular savings account instead.
Is a Christmas club account FDIC insured?
Yes, Christmas club accounts at FDIC-insured banks are covered up to $250,000 per depositor, just like any other savings account. Accounts at credit unions are insured by the NCUA up to the same limit. Your deposits are protected even if the institution fails.