Seasonal Savings Plans
Date: June 10, 2016
When you hear the term "seasonal savings plan," you probably think of a special account used to put away funds for the December holiday season. That’s true, but seasonal savings plans can also help fund vacations, home renovations and even a down payment on a car. Some banks offer specific accounts geared for summer or winter savings, but it can also be just as easy to open a second savings account. Use that extra account to fund your dreams instead of pulling funds from your original nest egg.
Holiday Club Accounts
A holiday season account helps you save money for celebrating the winter holidays. TD Bank, located mostly on the East Coast, offers a Holiday Club Account with no minimum deposit and no monthly maintenance fee, but it does pay interest. It doesn't come with an ATM card, which eliminates the temptation to "pull out a little cash" on a whim.
Not having an ATM card means you won't have to worry about overdraft charges. Cashier's checks and money orders are available for a small fee. When it comes time to do that holiday shopping, just make a trip to the bank to withdraw funds or transfer money into another account.
Winter Savings Accounts
Some banks offer winter savings accounts with a few more features. 1st Mariner Bank, found throughout Maryland, offers a winter savings account with a $1 minimum deposit as of 2015. The account offers compounded interest and allows an automatic weekly or monthly fund transfer from a 1st Mariner savings or checking account.
Any funds in the account are transferred to your regular savings or checking account by the end of October, but you won’t earn any interest on amounts withdrawn before the transfer date. You can reopen the account the following year simply by making a deposit.
Summer Savings Accounts
Summer savings accounts are often used for vacations, but they've got lots of handy uses. 1st Mariner Bank's summer savings account works like its winter account, except that the funds transfer to your savings or checking account by the end of May. You must already be a 1st Mariner customer to sign up for either account.
Credit unions are another option for summer savings accounts. Mission Federal Credit Union, located in San Diego, offers summer and holiday savings accounts that require a minimum initial deposit of $20 and a monthly transfer of between $20 and $500. The accounts are free and both have online access. They don’t provide an ATM card, but that just keeps you from easily tapping into that special account.
Second Savings Account Option
Many people have one savings and one checking account, but there's no harm in opening a second savings account to hold funds for a vacation, a new car or other hefty expense. By separating your savings budget into two accounts, it’s easier to avoid drawing from your emergency fund. Consider this — you deposit money into your savings account, but then you see a sofa you simply must have, so you pull the money from your nest egg to buy it. How long will it take you to re-save the money you pulled out? Had you divided your savings and pulled that money from the second, optional spending account, your primary nest egg would still be intact.