Could Christmas club accounts be a savings option for 2021?

A woman wearing a stripy T-shirt sits at a desk, looking at a laptop.

Now you might be thinking it’s February, why are we still talking about Christmas? Well we’re not really, more a nifty way to save money. In fact, one that the Customer Owned Banking Association (COBA) is encouraging Aussies to think about in 2021.

What is a Christmas club account? 

In a nutshell, a Christmas club account is a way to save money throughout the year in preparation for the holiday season. The idea is that you deposit a little at a time and only have access to it all at Christmas, when you need it.

This type of account has been around for over 100 years, according to COBA. However, has become less popular of late with more ways to buy on credit coming to the fore.

COBA chief executive Mike Lawrence says, “With the rise of buy now, pay later schemes, we’re seeing a younger generation develop an appetite for credit culture.” 

He warns users of such schemes against impulse buys and the rapid accumulation of debt.

Which banks offer Christmas club accounts?

Despite becoming less popular in recent years, there are still a number of banks and credit unions that offer Christmas club accounts. These include:

  • Bendigo Bank
  • Gateway Bank
  • Heritage Bank
  • IMB Bank
  • The Mutual Bank
  • Woolworths Team Bank

Bank Australia also has a version of this called the Christmas Saver Account. With most of these types of accounts you will be able to access your money between the beginning of November and the end of January.

Can I earn interest on a Christmas club account?

Yes, you can usually earn some interest on a Christmas club account. That said, as interest rates for savings are low all across the board right now, it probably won’t be that much. Interest rates can range from as little as 0.10% p.a. to as much as 1.00% p.a. for these types of accounts.

Other savings options

If a Christmas club account doesn’t appeal to you, you might be interested in a term deposit instead. With a term you can lock money away for as short as one month to as long as five years. 

Or if you’d rather have your money somewhere you can access it, why not think about getting a savings account. Head over to Mozo’s compare savings accounts page to see what options are available in Australia right now.

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