Struggling to save? Customer-owned banks say try a Christmas club account

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on January 28, 2021
Struggling to save? Customer-owned banks say try a Christmas club account

For those struggling to save money in the new year, some experts are advocating for Christmas club accounts to help Australians reach their savings goals.

With many Australians paying off a debt-hangover from the Christmas and New Year period, the Customer Owned Banking Association (COBA) is encouraging people to think beyond traditional banking products, like credit cards and savings accounts, and to consider a Christmas club account instead.  

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.


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  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.

Save Account

  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.
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Savings Account (Amounts < $250k)

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    High Interest Savings Account (< $250k)

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      Savings Maximiser (<$100k)

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        Goal Saver

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          Saver Account (<$250k)

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            Boost Saver (< $250k)

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              Easy Saver

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                Growth Saver ($1 - $25k)

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                  Growth Saver Account

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                    Online Saver ($1-$100k)

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                      Reward Saver

                        Rates based on a savings balance of $10,000. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions and for any applicable fees and charges. Rates correct as of August 20, 2022. View disclaimer.

                        Just what is a Christmas club account, exactly? 

                        Christmas club accounts have been around for more than 100 years, but the modernisation of bank accounts and the emergence of credit cards and buy now, pay later has seen them fall well out of favour. 

                        They're essentially a kind of savings account that acts like a term deposit, encouraging customers to put amounts of money away each week into an account that can only be accessed at certain times. 

                        For example, they're frequently used in the lead up to Christmas to help pay for gifts, hence the name Christmas club accounts. 

                        Customer Owned Banking CEO Mike Lawrence said these accounts are one example of how people can manage their money wisely. 

                        “Christmas club accounts are a customer-focused product that help customers plan ahead and set savings goals that will leave them with a sense of relief rather than dread after the holidays are over," he said. 

                        “As an alternative option to manage holiday spending, Christmas Club accounts are a great way to consistently build on your savings throughout the year.”

                        Gateway Bank CEO Lexi Airey told in 2019 that this 'old-school' way of saving can be a good way of saving, just as the 'new-school' methods like expense trackers, micro-investing apps and automated savings ’round-ups can be.

                        “Mainly the preserve of customer-owned banks, Christmas Club Accounts are probably one of the best-kept secrets for saving money,” Ms Airey told

                        “They are designed as purpose-built ‘jam jars’ with restricted access so you won’t be tempted to spend early and importantly, there are usually no account-keeping fees, so you can open as many as you like for different reasons like presents, food, or travel.”

                        Christmas club savings accounts: Interest rates and fees

                        Christmas Club accounts aren't offered by as many banks as regular accounts. They're more common among the customer-owned banks, while some larger retail banks like Bendigo Bank offer them as well.  

                        The interest rates offered on Christmas accounts tend to be a bit lower on average than the standard savings account. 

                        There are some as low as 0.10% p.a and 0.20% p.a, while many tend to sit around the 0.50% - 0.60% p.a range. 

                        Gateway Bank offers a Christmas club product with a 1.00% p.a rate, and only allows access from November 1 to January 31st each year.

                        These rates might seem low, but interest rates on standard savings accounts aren't too hot either, and Mr Lawrence said the interest rate is only one consideration to make. 

                        "The frequency of payments and when interest is calculated can help earn more through compound interest," he told

                        "Many Christmas Club accounts will also waive account keeping and transaction fees."

                        While these fees often aren't charged, Christmas accounts do tend to charge fees for early withdrawals, similar to term deposits

                        "In any event, discussing your goals with a trusted expert can result in a better decision and pathway to savings," Mr Lawrence said. 

                        Photo by Gabby K from Pexels

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                        William Jolly joined as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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