Christmas Club

Christmas Club sounds like a biker gang for Santa's elves (by "biker," of course, we mean tricycles with streamers on the handle bars and little bells to ding when it's time to roll out for cookies). But it’s actually not a club at all...it’s a bank account. (A bank account for people, not for elves...sorry if there was any brief confusion there.)

Started in the 1920s, the account was designed for people to put money into all year long, and only be able to withdraw the money in December (you know, for Christmas). If members withdrew it sooner, they would pay a penalty. The accounts drew low interest, and didn’t offer much benefit other than the incentive to leave the money there. For that reason, the accounts lost steam, although some banks still offer them today.

Say you have trouble planning ahead. You have two kids who are going to get really bummed if they get socks and lottery tickets again this year. So you want to make sure you have enough for real Christmas presents. You set up a Christmas Club account. Every month, put $25 into it. By December, you've got $275 ($25 x 11 months)...enough to get Sally and Timmy a $125 present each, with some left over for egg nog for you.