Squirreling away money in a holiday club account used to be as much a tradition as collecting tree ornaments or brewing egg nog.

Not anymore.

As bankers encourage customers to use ATMs, computers, and telephones for transactions, the idea of people clogging teller lines to deposit $2 in a Santa Claus passbook every week does not fill them with holiday cheer. And customers, for their part, have largely abandoned the low-interest accounts, preferring to use credit and debit cards to pay for gifts.

To be sure, many banks - particularly community banks and credit unions - have clung to the folksy accounts. Though holiday clubs are rarely promoted, bankers say a core group of older customers is as devoted to them as many Americans once were to Green Stamps.

"Customers look forward to them," said Thomas M. Caron, president of the Easton Cooperative Bank of Easton, Mass. "They'd probably hang me from the highest Christmas tree if we didn't" offer them.

Reluctant to play the Grinch, Mr. Caron plans to continue offering the unprofitable "Christmas Club" accounts. Only 320 customers use them, Mr. Caron said, but those customers cherish their little passbooks and the gift the bank gives them each year. (This year: a Christmas pot holder.)

Mr. Caron's dilemma isn't unusual. While bankers may place the holiday club account in the same category of relics as the toaster giveaway, customer demand keeps the practice alive.

Even BankAmerica Corp., the nation's third-largest bank, quietly maintains the time-consuming and costly program: last month, the bank paid out $119.5 million that Holiday Account customers saved in 1996.

"If the banks don't want it, their customers do," said Lorraine McPeek, an account executive for CC Marketing, a company that creates marketing materials and passbooks for bank holiday clubs.

Ms. McPeek's company is the successor to the Christmas Club A Corp., an Easton, Pa.-based company that claims to have invented the concept back in 1910.

The practice hasn't changed much since then - except that, as a nod to modernity, most banks call them "holiday clubs" to be religion-neutral. Then as now, customers deposit a set amount each week - typically between $2 and $100 - into a savings account. The money is given to depositors a month or two before the holidays, and banks either pay interest on the accounts or make the last payment.

No one seems to keep track of how many banks have holiday clubs, although the Credit Union National Association said 64% of its 12,100 members offer holiday or vacation club accounts.

Even this newspaper, alas, has lost interest. American Banker last published its annual club survey, a longtime holiday tradition, in 1987.

Frank Mosher, president of Security Savings Systems Inc. of New Cumberland, Pa., said bank mergers, credit cards, and consumers' tastes for more expensive Christmas gifts are putting a serious dent in his 66-year- old business.

"It's unfortunate today; there's nothing in our tax laws to promote savings," Mr. Mosher said. "It used to be you saved in advance for what you're going to spend."

His company printed two million passbooks and coupon books for 2,400 financial institutions this year. He said the number of customers has dropped by about 15% over the last 10 years.

Still, he isn't ready to write off the clubs altogether. "The savings habit is still so ingrained out in the country and with the smaller banks," Mr. Mosher said. "I think Christmas clubs will still be around in the year 2025."

At Harbor Federal Savings Bank in Baltimore, chief executive Bob Williams agreed holiday clubs have longevity. Mr. Williams says customers in working-class neighborhoods are "religious" about saving with his bank's club each week.

"We get about a half million a year in accounts," Mr. Williams said. "It's usually the same people."

Catherine Anselmi, a Harbor Federal patron for 25 years, said she puts $50 into her club account every two weeks. After receiving her annual check in October, she starts depositing more money right away.

"We really depend a lot on it," Mrs. Anselmi said.

A South Baltimore resident, Mrs. Anselmi convinced her daughter and daughter-in-law to start saving for the holidays. But she had less luck with her son, Timmy.

"He kept saying 'Next week, next week,'" she said.

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