Christmas Club Accounts Explained and Alternatives for Holiday Savings

In 2022, the average American planned to spend $833 on holiday purchases, with $586 allocated specifically for gifts, as reported by the National Retail Federation (NRF).⁽¹⁾ For more, see our guide on savings accounts with atm card.

A Christmas savings account can help you save for the holidays — and keep that money locked away until it’s time to spend. But they’re not known for high interest rates, and your cash might grow faster elsewhere. For more, see our guide on 7 interest savings account. For more, see our guide on savings account benefits. For more, see our guide on where not to put your savings.

How do Christmas club accounts work?

Christmas club accounts are short-term savings accounts specifically for holiday expenses.

Club accounts are deposit accounts, just like savings accounts, but they have early withdrawal penalties to discourage you from tapping into your savings before the holidays. You deposit money throughout the year and earn a small amount of interest, typically accessible in October or November via check or direct deposit.

Small banks or credit unions are most likely to offer Christmas club accounts. To make the most of them, it’s ideal to open one early in the year, such as January or February, to give yourself more time to save.

Is a Christmas club account worth it?

A locked savings account can make a lot of sense if you find yourself withdrawing cash intended for holiday savings. With penalties for early withdrawal, these accounts make it a bit harder to access your money, which can help you stay on track.

However, Christmas club accounts don’t usually have the best APYs, often around 0.01% and 0.25%. You can find much better APYs with high-yield savings options, which can offer rates well above 4%.

Where to find Christmas club accounts

Christmas club accounts are somewhat rare, but we’ve found a few to compare.

Community Bank Christmas Club Account

Community Bank’s Christmas Club Account offers one of the highest APYs we’ve seen, providing up to 5.00% APY on balances up to $3,000. It credits interest at the end of the 12-month cycle, and transfers are made weekly or monthly to the account throughout the year. To open this account, you must have a Community Bank checking account.

American Bank & Trust Christmas Club Account

This Christmas club account has no monthly fees and a small $10 opening deposit requirement. It allows regular deposits throughout the year, with funds disbursed in October to prepare for holiday spending. A $20 penalty applies for early withdrawals, and you’ll lose any accrued interest if you close the account before maturity. For rates, you must contact the bank.

Consumers Credit Union Christmas Savings

This credit union offers a Christmas Savings Account where members can set up automatic transfers and access the funds between October 1 and December 31. Rates aren’t advertised, but Consumers Credit Union claims you can “earn a higher interest rate than regular savings accounts.” As a credit union, membership is required to open the account.

Alternatives to a Christmas club account

If you’re open to other options, here are some alternatives that may offer higher interest rates or more flexibility than traditional club accounts:

• Certificates of deposit (CDs). CDs provide fixed interest rates over terms from three months to 10 years. They impose penalties for early withdrawal, helping you stay disciplined with your holiday savings. On average, CDs offer higher interest rates than Christmas club accounts.
• High-yield savings accounts (HYSA). If you don’t need withdrawal penalties to stay on track, a HYSA can offer very high APYs. These accounts are often free to open and can be designated solely for holiday savings. In many cases, HYSAs may limit withdrawals to six per month.
• Savings accounts with sub-accounts. Some accounts, like the SoFi Checking & Savings Account or the Current Account, let you create “buckets” or “pods” to sort your savings goals.

Compare top savings accounts

Compare top accounts by monthly fees, APYs and features. For a closer comparison, tick the Compare box on multiple options to see benefits side by side.

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Finder Score	Account type	Annual Percentage Yield (APY)	FDIC or NCUA insured amount	Minimum balance to earn APY	Minimum deposit to open
Promoted 9.2 Excellent Public High-Yield Cash Account	9.2 Excellent	Cash management account	3.30%	Up to $250,000	$0	$0	Go to site View details Compare product selection Compare	loading
Promoted 9.4 Excellent Wealthfront Cash Account	9.4 Excellent	Cash management account	3.55%	Up to $8M FDIC insurance	$1	$1	New clients earn can earn 4.45% APY. New clients get a boosted APY from 3.55% to 4.20% APY for 3 months on up to $150,000. Can also earn ongoing 0.25% APY increase for monthly direct deposit of $1,000 or recurring deposits of $2,500 for a total 4.45% APY with both APY boosts. T&Cs apply.	Go to site View details Compare product selection Compare	loading
Promoted 8 Great CIT Bank Platinum Savings	8 Great	Traditional savings	Up to 3.75%	Up to $250,000	$0	$100	Earn up to 4.35% APY. Get a 0.60% boost to the standard Platinum Savings APY for six months. The boost applies when an eligible customer opens a new Platinum Savings account or enrolls a qualifying Platinum Savings account using promo code BOOST60, subject to promotion terms. APYs are variable and may change. T&Cs apply.	Go to site View details Compare product selection Compare	loading
9.2 Excellent SoFi Checking and Savings	9.2 Excellent	Traditional savings,Checking	Up to 3.30%	Up to $250,000	$0	$0	Earn up to 4.40% APY on savings and $50 or $400 with direct deposit. Open a new SoFi Checking and Savings account by 31 December 2026, set up eligible direct deposit within 60 days, and maintain direct deposit for six months. 1.10% Boost on Savings APY to up to 4.40% for up to 6 months on new accounts. T&Cs apply.	Go to site View details Compare product selection Compare	loading
9.7 Excellent Live Oak Bank through Raisin	9.7 Excellent	Traditional savings	4.10%	Up to $250,000	$0.01	$0	Up to $1200 with code SUMMER26. T&Cs apply.	Continue View details Compare product selection Compare	loading
Not scored yet Robinhood Banking	Not scored yet	Cash management account	3.60%	up to $2.5 million	$0	$0	Continue View details Compare product selection Compare	loading

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How we picked these

What is the Finder Score?

The Finder Score crunches over 250 savings accounts from hundreds of financial institutions. It takes into account the product's interest rate, fees, opening deposit and features - this gives you a simple score out of 10.

To provide a Score, Finder’s banking experts analyze hundreds of savings accounts against FDIC-reported national averages as a baseline. Accounts with rates well over the national average are scored the highest, while accounts with rates well below are scored low.

Read the full breakdown

Bottom line

Setting aside money throughout the year can take the stress out of holiday budgeting and help you avoid using credit cards to buy gifts and rack up debt.

However, Christmas club accounts usually offer low interest rates and limited flexibility. If you’re confident you won’t dip into your holiday fund, explore high-yield accounts or traditional savings accounts.

Alternatively, you can also consider challenges like the 100 Envelope Challenge to gamify your savings or check out tips on how to save $1,000 in a month.

To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.

Written by

Bethany Hickey

Banking editor

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Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio

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