Christmas Clubs

Personal Finance

Many banks gave promotional tokens like this when someone opened a Christmas club account.
Photo Credit:

If you haven’t heard of Christmas clubs, don’t feel bad. These types of accounts fell out of popularity in the 1970’s and are rarely offered at financial institutions anymore. During their heyday, though, Christmas clubs served a very practical purpose: help people budget for Christmas spending.

Merkel Landis, treasurer of the Carlisle Trust Company, created the first known Christmas savings fund in 1909. There were about 350 account holders with an average of $28 (which equates to roughly $330 in today’s market).

These accounts weren’t meant to collect a great deal of interest or compound the account holders’ money. They were essentially started so people could protect their money from themselves, most notably by charging fees for withdrawals before the holiday season.

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An old brochure promoting Santa's Dime Saver Christmas Club at Amoskeag Savings Bank. According to US Bank Locations, this bank was shut down in 1991.
Photo Credit: Todd Franklin, Flickr

Christmas clubs gained popularity throughout the 1950’s and 60’s before peaking and starting to decline in the 1970’s. Low interest rates and an assortment of fees meant fewer customers were willing to open Christmas club accounts, and the additional costs of managing extra accounts combined to slowly phase out Christmas clubs.

Even though they were started over 100 years ago, though, one thing has remained the same: many people still have a difficult time saving money. If you haven’t done so in the past, we recommend starting a Christmas budget early in the year. Between travel, food, and gifts, Christmas expenses can add up quickly. Setting aside a few dollars a week throughout the year can make the season of giving more affordable and less stressful.

Most financial institutions have deposited Christmas clubs into their history books, but the idea behind them is alive and well: saving for Christmas is an important part of most household budgets.

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