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Compare Christmas club accounts to save for the holidays

Don't rely on a holiday miracle to help you pay for presents in 2023.

A dedicated Christmas savings account could help you prepare for the often-expensive holiday. These accounts automatically deduct a set amount of income from your paycheck via direct deposit and set it aside. When the holidays roll around, these funds are released into your main checking or saving account. But their rates are often very low compared to high-yield savings accounts.

Banks that offer Christmas club accounts

NameAPYMinimum opening depositMonthly fee
American Bank & Trust Christmas Club account0.5%$10$0
Premier Bank Christmas Club account1%$5$0
America’s Credit Union Christmas Club account0.10%$5$0
BankPlus Christmas Club Savings0.05%$5$0
Space Coast Credit Union Christmas Club Savings0.25%$5$0
Park National Bank Christmas CLub Savings0.03%$0$0
Consumers Credit Union Christmas Savings account0.25%$0$0
Pen Air Federal Credit Union Christmas Club account0.3%$25$0
Security Service Club Savings Account0.05%$5$0

Is a Christmas Club account worth it?

Christmas club accounts are notorious for having low APYs and strict penalties if you dip into funds before November. Because of this, opening a high-yield savings account just for Christmas may be a better idea. You’ll most likely earn a higher rate — and you won’t pay a penalty if you need to withdraw cash before the holidays.

Alternatives to a Christmas Club account

Here are a few alternatives to consider if you’re not set on a Christmas savings account:

  • High yield savings account. If you don’t need a penalty to motivate you to keep your hands off your savings, open a high-interest savings account just for your Christmas money. You’ll earn a higher APY, plus you’ll be able to withdraw funds at any time throughout the year. Some of these accounts, like UFB Preferred Savings, compound interest daily as well, which grows your funds faster than a Christmas Club account could manage.
  • Savings account with sub-accounts. If you don’t like the idea of having to manage multiple savings accounts, look for one that offers sub-accounts. For example, Ally Savings lets you split your money into different Savings Buckets, so you can track and manage multiple savings goals all in one place.
  • Christmas budget. Decide how much you want to set aside each month and write it into your budget — or have it transferred directly to your savings account as soon as your paycheck is deposited. If budgeting isn’t your strong suit, tools like Cleo or sub accounts can help.
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    Compare savings accounts

    If higher rates are what you’re after, compare high-yield savings accounts by APY and minimum deposits. Select up to four accounts and click Compare to check out their rates side-by-side.

    Name Product Annual Percentage Yield (APY) Minimum balance to earn interest Minimum deposit to open Offer Estimated total balance
    American Express® High Yield Savings Account
    Finder Rating: 4.6 / 5: ★★★★★
    American Express® High Yield Savings Account


    Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
    CIT Bank Platinum Savings
    Finder Rating: 3.8 / 5: ★★★★★
    CIT Bank Platinum Savings



    Earn 4.4% APY on balances of $5,000 or more. Open an account in five minutes or less. Easily manage your account with CIT’s mobile banking app. FDIC insured.
    Patriot Bank High-Yield Money Market Deposit Account
    Finder Rating: 4.9 / 5: ★★★★★
    Patriot Bank High-Yield Money Market Deposit Account


    Money market deposit accounts earn interest like savings accounts but also come with checks and debit cards. Earn 4.75% APY with Patriot Bank’s MMDA. Open an account online in under five minutes. $1 minimum deposit. FDIC insured.
    Western Alliance Bank High Yield Savings Account through SaveBetter
    Finder Rating: 4.9 / 5: ★★★★★
    Western Alliance Bank High Yield Savings Account through SaveBetter


    Get an impressive 4.8% APY, which is 13.5x higher than the national average. All with $0 fees and only a $1 minimum deposit required. FDIC insured.
    U.S. Bank Elite Money Market
    Finder Rating: 3.9 / 5: ★★★★★
    U.S. Bank Elite Money Market




    With a tiered interest rate, U.S. Bank Elite Money Market pays you more interest for higher balances. Earn 0.01% APY for balances under $25,000. Earn 3.50% APY for balances up to $499,999.99. Monthly fee is waived for a $10,000+ balance. Member FDIC.
    Lemmata Savings Bank Money Market Account
    Finder Rating: 4.6 / 5: ★★★★★
    Lemmata Savings Bank Money Market Account


    Get a competitive 4.55% APY with a $0 monthly fee. Open with as little as $1. FDIC insured.

    What is a Christmas club account and how does it work?

    Christmas club accounts are short-term savings accounts offered by many credit unions and smaller banks. You deposit money into the account each month, then the bank “releases” the funds to you in November just in time for the holidays. You’ll typically pay a penalty if you need to make a withdrawal before November.

    These accounts earn interest on your deposit, though the APY offered by these accounts are far lower than other investing options, such as high-yield savings accounts and CDs.

    Pros and cons of a Christmas club account

    Opening a Christmas club account instead of using a traditional savings account can help some people save for the holidays, but it isn’t for everyone.


    • Can compel you to save. If you find it difficult to leave your money be, you’ll like that access isn’t easy before the term is up.
    • Can help you avoid credit. Planning your holiday spending in advance means you won’t have to rely on interest-accruing credit cards to buy presents.
    • Motivation. Penalty fees for withdrawing early can keep you motivated to stay away from your savings before Christmas.


    • Penalties for early access. You’ll pay a penalty of up to about $20 or experience an account closure for accessing your money too early, even if for an emergency.
    • May not be necessary. Your average $0-fee savings account provides many of the same benefits — interest and monthly automatic transfers — without the limitations.
    • Interest rates. Christmas club accounts usually offer lower interest rates than high-yield savings accounts or CDs.

    How to choose the best Christmas club or savings account

    While the basic structure of a Christmas club account or savings account is consistent among the financial institutions that offer them, details in the features make each one unique. Here are a few key features to look for when finding the best account for you:

    • High interest rate. Even a small difference in interest rate can start to add up over the year.
    • Pays out interest frequently. The more frequently interest is compounded, the more you’ll earn.
    • Easy to deposit funds. These can include cash deposits, online transfers and automatic withdrawals from your checking account.
    • Low fees. Look for accounts that do not charge any monthly or transaction fees.
    • Easily accessible. If you don’t plan to use cash for your Christmas shopping, an account linked to your checking account will let you use your savings with your debit card.
    • Minimal penalties. Many Christmas club accounts will charge a penalty if you withdraw your money before November, while traditional savings accounts let you withdraw at any time. Decide if the motivation of a penalty is worth the fees you’ll face if you don’t stick to your savings plan.

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    Are there any risks I should be aware of?

    Although any deposit up to $250,000 is backed by the US government if you use an FDIC-insured bank or credit union, there are risks to be aware of if you use a Christmas club or savings account.

    • Withdrawal fees. Christmas club accounts may charge fees for withdrawing early, and traditional savings accounts often charge fees for making more than a certain number of withdrawals per month.
    • Low rate of return. Low-risk means low-reward, and savings accounts and Christmas Club accounts will provide a lower rate of return than riskier investments like stocks.

    Bottom line

    Setting aside money throughout the year can help take the stress out of the holidays — and prevent you from racking up credit card debt. But they usually have lower interest rates than $0-fee savings accounts and you can’t access your money until a certain time. If you won’t be tempted to spend your money on other things, you’ll want to compare more options and go with a $0-fee savings account instead.

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