Here’s a way to earn 3% on some of your money between now and the end of November.
Sears has created what it calls the Christmas Club.
Sign up by Oct. 31 at any Sears or Kmart store, or online at sears.com. No money is required to open an account.
Now figure out how much you can smartly spend at Sears or any of its affiliated stores — Kmart, the great indoors and Lands’ End — by the end of the year.
Hit the stores or Web sites and total up everything from holiday gifts to that new refrigerator or HDTV you’ve been planning to buy.
Deposit that amount in your Christmas Club account by Nov. 14 and Sears will add a 3% bonus to your balance by Nov. 25.
Since the store caps the bonus at $100, that means you can earn 3% on deposits of up to $3,333.
We know this is just a clever marketing gimmick from Sears. But let’s face it. You can’t earn 3% a year with most CDs and money market accounts right now.
If you only tie your money up in the Christmas Club account for a month, that works out to a very lucrative annualized return of 36%.
Your balance is put on a gift card that has no fees and never expires, so you can take as long as you like to spend it all. But the longer you take, the lower your return.
That’s why we think you should only deposit as much as you plan to spend before Jan. 1.