AChristmas club is a special-purposesavings account, first offered by variousbanks andcredit unions in the United States beginning in the early 20th century, including theGreat Depression. Bank customers would deposit a set amount of money each week into a savings account, and receive the money back at the end of the year forChristmas shopping.
The first known Christmas Club started in 1909, when Merkel Landis, treasurer of the Carlisle Trust Company ofCarlisle (Pennsylvania), introduced the first Christmas savings fund. The Club attracted 350 customers who saved about US$28 (equivalent to $980 in 2024) each, and the money was disbursed onDecember 1 of that year.[1]
The January 2, 1920, edition of theBelvidere, Illinois,Daily Republican announced that the town's State Farmers Bank was encouraging parents to enroll their children in the Christmas Banking Club "to develop self-reliance and the saving habit".
For decades,financial institutions competed for the holiday savings business, offering enticing premiums and advertising items such astokens. The Dime Saving Bank ofToledo, Ohio, issued a brass token "good for 25 cents in opening a Christmas account" for 1922–1923.[2][3][4] There were also numbered tokens issued by the Atlantic Country Trust Co. inAtlantic City, New Jersey, inscribed on the reverse: "Join our Christmas Club and Have Money When You Need It Most." In the February 2006 issue ofForbes magazine, business writerJames Surowiecki summarized the accounts' appeal: "The popularity of Christmas Club accounts isn't a mystery; if their money was in a regular account, people assumed they'd spend it."[5][3][4]
Key drawbacks of Christmas Club accounts included lowinterest rates and a high number of restrictions, such as not allowing withdrawals unlessfees were paid. Christmas Clubs later fell out of favor with consumers.[A]
Banks incurred high costs in maintaining the accounts. According to Dennis Halpin, theCEO for the Capital Communications Federal Credit Union, the union had 3,500 Christmas Club members in 1984. Each member required a check to be produced, signed, collated, and mailed, only for 70% to be returned to the bank to be deposited in another account.[citation needed]
Lowry recalls that he was once mentioned in a question on the television game show Jeopardy: "The question was, 'Bank president Merkel Landis founded this in Pennsylvania.' The answer was: 'The Christmas Club.'
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