A Christmas saving account is an account that your credit union or bank may offer to you. The premise of the account is to automatically withdraw money from your checking account each month to help you save money for Christmas. The amount that you have accumulated will be mailed to your home or deposited back into your checking account sometime in November. Creating a holiday spending plan and using Christmas savings strategies will help you make the most of your holiday savings.
Advantages of a Christmas Savings Account
The biggest advantage to this account is that you never see the money, so you are less likely to spend it. You can have the money drafted out of your account the same day that it is deposited. This account is not used as an overdraft protection account, so the funds will not be used up that way. If you have problems leaving money in savings you may want to consider using this type of account to save for Christmas.
Disadvantages of a Christmas Savings Account
The biggest disadvantage to this account is the low interest rate that your money earns in this account. You are better off putting the money into a higher interest earning account such as a money market account. If you are financially responsible and do not touch your money you can put it into a money market account (offered through your bank) or an online savings account (which offer higher interest rates).
Your Options for Christmas Savings
The Christmas savings account is a good option for those who are not disciplined enough to set aside money each month for Christmas. This can help you develop the discipline if you need it. One of the best ways to begin saving money is to do it automatically. If you are interested in opening a Christmas savings account talk to an account representative at your local bank or credit union. You may opt to open an online savings account and set up an automatic draft yourself, and have your own Christmas savings account with a slightly higher interest rate.