A holiday savings account is designed to help you set aside funds for a specific goal, such as buying Christmas gifts, hosting the big holiday dinner or traveling, with a set date for when the funds can be accessed to help you avoid the temptations of tapping into your savings too early.
At Verve, you can set up a holiday savings account by opening a Pick Your Payout savings and setting a date for the money to be available before the holidays, such as October. Like other savings accounts at Verve, you choose how much you want to save, as well as how often and if you will use automatic transfers to take the guesswork out of saving money.
How does a Pick Your Payout or holiday savings account work?
In a nutshell, a Pick Your Payout account helps you automate your savings throughout the year so you have the money you need at the time you need it. There is an added motivator to stay focused on your savings goals—your funds are locked up until the date you set. You’ll even need to pay an early withdrawal penalty if you want to take out funds earlier.
Here’s how it works:
- Set up a Verve Pick Your Payout account within online banking or by calling or visiting a branch. If you’re not a member yet, you can join online AND set up a Pick Your Payout account without ever visiting a branch, though we’d love to see you if you ever decide to stop in. Deposit a minimum of $5 to open the account and $100 to earn dividends and avoid a monthly low balance fee.
- Determine an end date or payout date. Many members select October as their payout month to have funds available for holiday shopping and traveling.
- Set up automatic transfers from your checking account to your Pick Your Payout If you transfer $20 every week, you’ll have $1,040 (plus any dividends you earned throughout the year) to use toward your holiday plans!
- We’ll keep your money locked up tight, safe and secure from fraudsters and spending temptations that you might face. That means if you try to withdraw funds before the date you set, you will pay a $10 early withdrawal fee.
In addition to setting aside money for the holidays, you can set up a Pick Your Payout account for whatever you’d like to save for, from a new phone to a tropical vacation.
Benefits of a Pick Your Payout account for holiday expenses
A Pick Your Payout is very similar to a regular, or Name Your Savings, account with a few additional benefits to help you save.
- You can earn more dividends. Pick Your Payout accounts offer a higher dividend rate, meaning your money works harder for you. Since you are committing to saving money for a longer period (the end date you set), you earn more in dividends than a regular savings account.
- It’s harder to take money out. It’s your money and you can still access it whenever you want or need to, BUT if you withdraw funds before your end date, you will pay a penalty. For many members, this makes it easier to stay on track and focused on the end goal of paying for your holiday gifts without going into credit card debt.
- You’re set up for future savings success. They say habits take anywhere from 18 to 254 days to form, and if you set your payout date for 12 months in the future, you’ll have 365 days to form your savings habit. Once you set up a Pick Your Payout account, you can set it up to start over again the following year, making forming healthy savings habits even easier.
- A separate holiday savings protects your emergency fund. Making sure you have money set aside for when life’s unexpected events occur—such as a car or home repair or sick pet—is important to your financial (and mental!) health. By setting up a separate savings account for your holiday expenses, you are helping to make sure you aren’t dipping into funds set aside for rainy days.