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What Is a Holiday Club, and Do I Need One?

Holiday Club

Chances are, you already have a savings account at a bank or credit union. So, when you hear about opening “club accounts,” what does that mean, and how do you know if you need one? 

A club account is a type of savings account in which the account holder makes regular contributions toward a predetermined goal. The most common example of this is a Holiday Club, in which the goal may be saving for the holiday season. In this case, a bank customer or credit union member will make regular contributions throughout the year and withdraw the money saved before the December holidays. Of course, the member may save money all year long and choose to use it for a different purpose. 

Most savings clubs are offered by credit unions. At Service Credit Union, we offer a Holiday Club that earns 3.00% APY* on up to $3,000. Members can make deposits all year long, in-person or online, and funds are disbursed on the first business day in November. When December rolls around, your gift budget is in the bag. 

So, what is the difference between a savings club and a regular club account?  

Savings club accounts may offer slightly higher interest or dividend rates than a typical savings account, depending on the amount you put in. However, be wary of some financial institutions potentially issuing penalties for withdrawing funds prematurely or failing to make a scheduled contribution. You may also need to wait for a certain date to reap the benefits of the club account. 

Club accounts are also a great way to set aside money for a specific and timely goal that’s separate from your normal savings account, such as the aforementioned holiday season, a vacation or a large-ticket item such as a down payment on a car. You may open several club accounts to save for different goals. 

If you’d like to keep the savings going beyond your Primary Savings Account and start building up the funds for your goal of choice, a Holiday Club may be right for you. Learn more here, or reach out at any time.

* Annual Percentage Yield (APY) is accurate as the last dividend declaration date of 12/01/2023 and subject to change without notice. Dividends paid on daily balances of $3,000 and less at 3% APY. If daily balance exceeds $3,000, the remaining balance will receive a variable APY of 3.00%-0.26%. On the first day in November, funds are disbursed via transfer to a Service CU account of your choosing at time of account opening. One Holiday Club account allowed per primary account holder. Must be a member of Service CU or eligible for membership with at least $5 in a Primary Savings Account.