October 27, 2022

All You Need to Know About Club Accounts!

As a member of Interior Federal, you have access to a range of savings options and loans that can help you save up for, or borrow money, to fund a large purchase, like a dream summer vacation or holiday spending. One of these options is Vacation or Holiday Club Accounts!

Let’s take a closer look at this savings vehicle and how it can help make summertime leisure more affordable.

What is a club account?

A club account is a type of savings account in which the account holder makes regular contributions toward a predetermined goal. Holiday club accounts are intended to be used for saving up for holiday expenses and vacation club accounts are designed to help the account holder save up for vacation expenses. Spreading the cost of a large, seasonal expense throughout the year makes it easier to handle.

Are there restrictions on club accounts?

The funds in a club account can generally only be withdrawn when the predetermined goal has been reached. This may be a specific date or amount of money. To discourage the account owner from deterring their progress toward their goal, early withdrawals from a club account may be penalized. For your vacation club account with Interior Federal, there is no predetermined goal or date of funds availability. However, with a Holiday Club, funds are held until October 1st and then released to your primary savings account for use just in time for the holiday season.

What are some advantages of a club account?

As mentioned, club accounts make dream seasonal expenses affordable by spreading the costs throughout the year. However, there are many more benefits to opening a club account. Here are just a few:

  • Incentive to save. Having a separate place to keep your vacation funds makes it easier to track your progress and incentivizes you to keep saving.
  • Name your account. For example, you choose to call your account “Europe Vacation 2023.” Attaching your vacation plans to your club account helps make it real and will motivate you to stick to your goal.
  • Builds strong saving habits. Making regular monthly contributions to a savings account is a great workout for your savings muscle and a big boost to your general financial health.
  • Prevents overspending and debt. Many will swipe or borrow their way through a vacay or holiday and then scramble for months after it to pay it all back. The financially responsible way to pay is of course, to save up for it before setting out. A club account helps you do just that.
  • Keeps the money out of sight. Out of sight, out of mind. You can’t spend that money when it’s on deposit with the credit union.
  • Favorable interest rates. Club accounts tend to offer more generous dividends than other accounts.

Related Content: Coping with Inflation? Be Budget Aware.

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