It is never too early to think ahead: Holiday Clubs make saving for gift-giving easy as 1, 2, 3

RISMEDIA, December 22, 2006-(MCT)-Some people still pay for Christmas the old-fashioned way: They save for it.

At least a couple of local banks still offer "holiday club" savings accounts that allow consumers to set aside money throughout the year for spending during the holiday season. Plenty of grandparents and other smart savers take advantage of them.

"It's a very successful product for us because so many other banks have stopped offering the clubs," said Tiffany Glenn, senior vice president and marketing officer for Bank of Hampton Roads, with 17 local branches. "Believe it or not, every year we sell more clubs than we did the year before."

The bank lets customers use direct deposit or a coupon book to pay into their holiday club accounts. Usually starting at the beginning of the year, they make 49 weekly deposits of $10, $20, $30 or $50, and the bank makes the 50th payment for them.

Checks go out around Nov. 1 in amounts of $500, $1,000, $1,500 or $2,500, depending on the size of the weekly deposit. The $20 club is the most popular, Glenn said.

Wachovia Bank, with Hampton Roads' highest deposit market share, has never offered a holiday club, spokeswoman Christine Shaw said. Instead, the bank sells a 12-month Systematic Saver CD, which takes designated weekly deposits for a year and pays more interest than a regular savings account, she said.

Bank of the Commonwealth also pays interest on its holiday clubs, said Karen Wilson, the bank's vice president of strategic planning, marketing and facilities management. Club holders receive their balance the first week in October, and payments into the club usually begin the second week of that month.

Bank of the Commonwealth had 115 club accounts in 2006, about the same as last year, Wilson said.

More holiday shoppers should choose a Christmas club, said Robert Pagliarini, a California financial planner and author of "The Six-Day Financial Makeover." He suggests in his book that consumers set up separate savings accounts for specific goals, and that's exactly what a Christmas club is.

"I just don't think we really are great savers," Pagliarini said.

In 2005, for the first time since the Great Depression, American consumers spent more than they earned. Last year, Pagliarini said, the average consumer racked up $1,200 on credit cards during the holidays, with $800 of that debt from gift purchases.

"It really helps with budgeting," Glenn said of the Bank of Hampton Roads club. "People who end up in debt after the holidays don't want to end up that way the following year."

Distributed by McClatchy-Tribune Information Services.

Real Estate Hot Topics

Profit Center: Real Estate Tips, Training & Events

RISMedia Solutions

RISMedia on the Go

Today's Featured Listing