Facebook Twitter

MILLIONS OF AMERICANS STILL SALT AWAY CASH IN CHRISTMAS CLUB

SHARE MILLIONS OF AMERICANS STILL SALT AWAY CASH IN CHRISTMAS CLUB

The Christmas Club, that relic of Grandmother's day, is still going strong as a convenient way to save money for holiday gifts.

Hot-shot investors would turn up their noses at the low interest rates paid on Christmas Club accounts, but millions of Americans continue to salt away $10 or $20 a week.The idea is to have money - cash - to spend when the holiday gift-buying season rolls around.

Joseph Macher, chief operating officer of Christmas Club, a corporation, in Easton, Pa., says 23 million Americans still use Christmas clubs. He sells promotional materials, coupon books and special checks with holiday motifs to 5,000 banks, savings and loan associations and credit unions.

"The consumer still wants it," he says. "The clubs are popular from Virginia north to the Middle Atlantic and North Atlantic states."

A survey by Bank Rate Monitor, a financial industry trade publication, found Christmas Club accounts in such widely separated cities as Pittsburgh, Philadelphia, Los Angeles, Richmond, Va., Bridgeport, Conn., and Birmingham, Ala.

The accounts earn modest interest rates, often 5 percent or less and sometimes have stiff penalties for early withdrawal. Normally, they run from November to October, or from October to September.

Macher says the first Christmas Club dates back to 1910, when banks were smaller and more numerous. In those days, there weren't any high-interest savings and money market accounts.

The typical club member saves $450 to $475 during the year, says Macher, which is enough to make Christmas merrier than it otherwise would be.

But a customer could accomplish the same thing - and earn more dollars - by depositing extra cash in a money market account, or a high-interest savings account, and leaving it there until the holiday shopping season rolls around.