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Bank Savings
- FDIC Insurance
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Savings Accounts
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Money Market Accounts
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Money Market Mutual Funds
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Certificates of Deposit (Time
Deposits)
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Holiday Savings Clubs
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Vacation Savings Clubs
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Treasury Savings Bonds
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Holiday Savings Clubs
A holiday savings club
is a disciplined, systematic approach to savings for the peak spending
periods around the year-end holiday season. It’s a nice way to avoid the
buildup of high interest credit card debt during the holidays.
Clubs are normally
started in January, but the start dates are usually flexible. The monthly
payments are small, $5 to $100, and there is no minimum balance requirement.
On a monthly basis, the bank transfers the predetermined amount from your
checking account to the club’s savings account. The club normally runs from
January to October. Usually on the first of November, the club’s balance is
automatically transferred to your savings account.
The interest rate earned
is usually nominal, but competitive. The compounding of interest varies by
bank. If the funds are withdrawn prior to November, accrued interest is
normally forfeited. However, there are usually no monthly maintenance fees,
and the record keeping is very convenient.
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