In the United States many banks and credit unions offer their cus-tomers the opportunity to save money for Christmas by opening a special “Christmas club” savings account. Account holders make small but regular deposits throughout the year. In early November the bank sends the customer a check for the total amount saved. These savings then finance the purchase of Christmas gifts and other seasonal expenditures.
A shoe factory owner from Carlisle, Pennsylvania, devised the first Christmas club for his workers in the year 1905. In 1910 a salesman named Herbert F. Rawll got wind of the idea and began to promote the clubs to banks. The opportunity for personal profit fired Rawll’s enthusiasm for the project. As a ledger salesman, Rawll not only sold banks on the idea of sponsoring Christmas club accounts, but also provided them with the special forms needed to keep track of the transactions. Both banks and bank customers eagerly embraced the new accounts. In two years the dynamic Rawll had convinced more than 800 banks to offer the special accounts. By the mid-1920s, about 8,000 banks offered Christmas club accounts to their patrons.
The new Christmas clubs flourished because they fulfilled the needs of financial institutions and consumers. In the early twentieth century manufactured items all but replaced the homemade gifts that had characterized American Christmas giving in the nineteenth century (see also commercialism). The clubs provided consumers a mechanism through which they could accumulate enough money to buy and to give ready-made Christmas gifts. In the meantime banks were searching for ways to attract new customers, especially lower-and middle-income people who had previously avoided putting their money in banks. The new accounts succeeded in bringing in these new customers. Moreover, they helped overcome the popularly held image of banks as snobby coldhearted institutions that served only the well-to-do.
Today many Americans still rely on Christmas clubs to fund their Christmas purchases. The conditions placed on these accounts vary from bank to bank. Consumers interested in opening a Christmas club account should compare interest rates, penalties for early withdrawal, minimum payments, fees, and balance requirements.