No matter how far away Christmas may be, saving up for the festive period can help you prepare for what’s an often-expensive time. It’s also much better for your finances than relying on interest-accruing credit cards to buy presents. Here’s our guide to the best ways to save for Christmas.
1. Regular savings account
Putting money into a regular savings account is a great way to set aside money and earn a bit of interest for your Christmas spending.
You’ll need to pay cash into your account each month for a set period of time and usually won’t be allowed to withdraw any of the funds during that time (although some providers might let you make a very limited number of withdrawals). If you find it difficult to leave your money alone, you’ll like that access isn’t easy before the term is up.
Many banks offer one-year regular savings accounts, so if you plan ahead and open one in early to mid-December then you’ll be able to access all the money that has accrued over the year just in time for the following Christmas.
2. High-interest savings account
If you don’t need a penalty to motivate you to keep your hands off your savings, you could open a high-interest savings account just to save for Christmas. You’ll earn a higher APR, plus you’ll be able to withdraw funds at any time throughout the year.
Just be aware that some high-interest savings accounts only pay interest if your balance is above a certain threshold. Know that amount and monitor your balance so that your money is always earning interest.
3. Savings with sub-accounts
If you don’t like the idea of having to manage multiple savings accounts, look for one that offers sub-accounts. They’re particularly useful if you want to save money towards a goal – like Christmas – as you can just move money there whenever you like.
Some of the challenger banks let you split your money into different savings buckets (like digital piggy banks), so you can track and manage multiple savings goals all in one place.
For example, Starling Bank’s Spaces feature lets you set up different Spaces for different purposes. You can set a target amount to save and squirrel cash away either manually or automatically, encouraging you to save more. However, as of February 2025, you’ll no longer earn interest on whatever you put away in your Spaces. Instead, you can open an easy access savings account with Starling to earn interest.
Monzo’s Pots feature lets you organise your money for different purposes and transfer money in and out instantly. You can create up to 20 different Pots, set goals and even lock or hide your Pots if you’re tempted to dip into one too soon. You’ll also be able to choose from different types of savings pots that pay interest on your cash.
4. Round-up savings
Many banks now offer automated savings features, where you can round up your daily transactions to the nearest £1, and send that loose change directly to your savings account.
For example, if you used your debit card to buy a book for £7.50, it would round-up the value to an even £8 and send the extra 50p to your savings account. Or you could choose to have your transactions rounded up to the nearest £5 amount, which in this case would round the purchase up to £10 and put the extra £2.50 into your savings.
It might seem like a small amount, but make a few purchases a day and this could add up to a lot of money in time for Christmas. Plus, if the extra change from your transactions are being added to a high-interest savings account, you’ll also earn interest on that money.
There are also round-up apps, like Chip. Download Chip, connect it to your current account and, using artificial intelligence, it will work out how much you can afford to save. It then moves small amounts of money from your current account into a Chip account at regular intervals of your choice.
5. Set a Christmas budget
Decide how much you want to save for Christmas each month to and write it into your budget – or have it transferred directly to your savings account as soon as you’ve been paid.
Having a proper budget in place has many advantages:
It shows you exactly how much you’re spending and what you are buying.
It lets you plan your spending and expenses so you’ll buy fewer things you don’t need.
It puts you in control of your finances, as you know when and how much you’re spending and what you’re spending it on.
It makes saving easier, as listing everything you spend gives you ways to cut back and reach your financial goals.
If budgeting isn’t your strong suit, tools like Meet Cleo could help.
How to maximise your Christmas savings
Four or five months in, think about how you can build an even bigger festive fund:
Make extra deposits. Think about making additional contributions to your savings account if you ever come into some extra cash.
Review your deposit amount. Consider whether you can save even more as the year goes on– for example, could you afford to push your monthly deposit from £75 to £100?
Can you switch? The savings account you chose months ago might have offered the best interest rate back then, but maybe another bank has a much better savings deal now. If you are allowed to change accounts without being penalised, then compare your options and switch to a better deal.
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Setting aside money throughout the year to save for Christmas can help take the stress out of the festive season, and prevent you from racking up credit card debt. Compare your options for savings accounts and start planning early.
Frequently asked questions
Christmas savings clubs are another option to start saving early by putting in a regular amount each month. You’ll get your money a few weeks before Christmas. However, with most schemes you don’t usually get the cash to spend how you want. Instead you’ll get vouchers or gift cards to exchange, or you have to buy gifts directly through the club.
It’s also really important to know that Christmas savings clubs are not protected by the Financial Services Compensation Scheme (FSCS). So if the company that runs the scheme goes bust, you’ll lose your money, as happened in 2006 with Farepak.
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Cassidy Horton is a freelance personal finance copywriter and past contributing writer for Finder. Her writing and banking expertise have been featured in Forbes Advisor, Money, The Balance, Money Under 30, Insure.com, and other top digital publishers. She holds a BS in public relations and an MBA from Georgia Southern University. See full bio
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Our guide to Santander’s savings accounts. From ISAs to regular savings, from fixed-term to junior saving accounts, Santander might have the option for you.
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