CHRISTMAS CLUB 2013

On December 23, 1955 this picture and the following text were printed in a local San Francisco newspaper:

A REGAL CHRISTMAS CLUB FAN

J. C. Bonzani, manager of Bank of America's 16th and Mission branch, holds his hands to receive 20 Christmas Club Savings Plan books from Mrs. Dorothy Gregory, a Mels Drive-In employee. Looking on is Raymond E. Walker, fountainman at the drive-in, who likes the Christmas Club idea so well he makes collections each payday from 20 fellow workers and takes the money and their club books to the bank.

??? WHAT'S A CHRISTMAS CLUB ???   KIP EXPLAINS:

The Christmas Club used to be a staple in American banking, which in retrospect seems crazy.  Customers gave the bank money every month.  The bank paid them little or no interest and would not let them take out their money until December 1st.  In addition, there were many fees and other restrictions, including substantial penalties for early withdraw.  And yet, Americans would cheerfully put their money in these ridiculous Christmas Club accounts even though those same dollars could have been earning interest in a regular savings account. So, why did people do this? Because Americans assumed if their money was in a regular account they would spend it.  So, they were essentially asking the bank to tie their hands. Makes sense, right? 

FINE

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NOTES:

• Surowiecki, James.  Bitter Money & Christmas Clubs.  2/14/2006. Forbes website. Retrieved 12/ 23/ 2013.  http://www.forbes.com/2006/02/11/mental-accounting-surowiecki_cz_js_money06_0214surowiecki.html