Christmas Club

A Christmas Club is typically offered by banking institutions to promote savings for the upcoming Christmas season. This originated in the Great Depression era to help save. The mindset behind this is relatively simple, as people are more likely to spend their money if they don’t keep it in a separate account.

The benefits, at least initially, is that banks wanted individuals to deposit money with their companies, so they would offer incentives to do so. As time went on, and competition quieted because so many people were doing it, the program briefly lost benefits, as the costs associated with it where bigger than the benefits gained.

The time is much better now to open an account, since everything has gone far more digital, so there are less costs incurred by banks or depositors. With everything moving to a digital age, this should help keep the Christmas Club accounts opening.

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