Holiday shopping can be expensive — and this year, nearly half of Americans said they expect to borrow money to cover purchases they can’t immediately pay for, according to the International Council of Shopping Centers.
This comes as American household debt nears its highest point on record, according to the New York Federal Reserve Bank. Americans hold $5.195 trillion — or $38,777 per personacross 133.97 million households — on average.
There’s another way to approach holiday shopping that doesn’t involve accruing debt. If you start saving incrementally toward your holiday shopping budget now by creating a sinking fund, you may not need high-interest debt to buy your loved ones’ gifts.
CNBC Select outlines what a sinking fund is, why it’s useful, the best accounts to use and how to set up your plan for this holiday season.
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What is a sinking fund?
A sinking fund is a savings account for a large, one-time or irregular expense — which can be for anything from a European vacation to your Medical Board Exam fee.
It can be a great way to pay for expenses you might otherwise put on a credit card, which helps you avoid interest charges.
Which kind of account is best for a sinking fund?
You can use any deposit account for a sinking fund, but Select recommends high-yield savings accounts. That way, your money won’t lose its value to inflation sitting in an account without earninginterest.
With SoFi Checking and Savings, you’ll have a 4.40% APY for six months. You can get a bonus of $50 if you deposit $1,000 and $400 if you deposit$5,000. Plus, you can get your paycheck two days early if you deposit the funds directly through the account, which could be helpful in bolstering your sinking fund at the last minute. However, SoFi does not have any physical branches, so if you prefer to do your banking in person, you’ll have to go elsewhere.
A good in-person alternative is the CIT Bank Platinum Savings Account. You can get in-person assistance at some of its parent company, First Citizens Bank’s, locations. Plus, CIT doesn’t charge monthly fees.
CIT Bank Platinum Savings Account
CIT Bank is a division of First-Citizens Bank & Trust Company, a Member FDIC.
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Annual Percentage Yield (APY)*
4.25% APY for six months when you enroll with promo code Boost501 and maintain at least $5,000 in the account. After the promotional period, the standard top-tier APY applies (currently 3.75%2 APY on balances of $5,000 or more)
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Minimum balance
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Monthly fee
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Maximum transactions
No limit – Max currently paused
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Excessive transactions fee
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Yes, if have a CIT Bank checking account
For complete list of account details and fees, see our Personal Account disclosures.
*1This is a limited time offer available to New and Existing customers who meet the Platinum Savings APY Boost promotion criteria. Accounts enrolled in the Platinum Savings Annual Percentage Yield (APY) Boost promotion will receive a 0.50% APY boost on the Platinum Savings current standard APY tiers for 6 months following the opening of a new account or when an existing Platinum Savings account is enrolled in the promotion. The Platinum Savings APY boost will be applied on account balances up to $9,999,999.00. Account balances above $9,999,999.00 will earn the standard APY. If the standard-published APY should change during the promotion period, the APY boost will move with it, offering an account APY above the standard rate. The Promotion begins on September 29, 2026, and ends December 15, 2026. Customers enrolled in the promotion prior to the end date will receive the APY boost for the 6-month period outlined in the terms and conditions. The promotion can end at any time without notice. Based on comparison to the national average Annual Percentage Yield (APY) on savings accounts as published in the FDIC National Rates and Rate Caps, accurate as of September 21, 2026.
*2Platinum Savings is a tiered interest rate account. Interest is paid on the entire account balance based on the interest rate and APY in effect that day for the balance tier associated with the end-of-day account balance. APYs — Annual Percentage Yields are accurate as of July 1, 2026: 0.25% APY on balances of $0.01 to $4,999.99; 3.75% APY on balances of $5,000.00 or more. Interest Rates for the Platinum Savings account are variable and may change at any time without notice. The minimum to open a Platinum Savings account is $100. 2Based on comparison to the national average Annual Percentage Yield (APY) on savings accounts as published in the FDIC National Rates and Rate Caps, accurate as of September 21, 2026.
How do I make a sinking fund a part of my budget?
To figure out how much to set aside from each paycheck, set a holiday budget and stick to it.
For example, if your budget for gifts and decorations is $1,000 and you start saving in late October, you’ll have about two months to save.
If you get paid biweekly, that means you could put$250 into the sinking fund with each paycheck. Across four paychecks, you’d builda robust amount to use toward the holidays. To make sure this happens, you also need to stay on budget in other areas.
To do that, Select recommends downloading a free budget app to help you track your money goals.
You can get a 34-day free trial of You Need A Budget, an app that allows you to allocate every dollar you earn toward something with the zero-based budgeting system — which is perfect when every dollar matters.
You Need a Budget (YNAB)
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Cost
34-day free trial then $109 per year ($9.08 per month) or $14.99 per month (college students who provide proof of enrollment get 12 months free)
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Standout features
Instead of using traditional budgeting buckets, users allocate every dollar they earn to something (known as the “zero-based budgetingsystem” where no dollar is unaccounted for). Every dollar is assigned a “job,” whether it’s to go toward bills, savings, investments, etc.
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Categorizes your expenses
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Links to accounts
Yes, bank and credit cards
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Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
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Security features
Encrypted data, accredited data centers, third-party audits and more
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* New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit received within 25 calendar days of your first Eligible Direct Deposit of $1 or more. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 5/15/2026 and will be available through 12/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 0.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 9/23/26. Fees may reduce earnings. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. *SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks. Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 9/23/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet *1.10% Savings APY Boost: Earn up to 4.40% Annual Percentage Yield (APY) on one SoFi Savings account with a 1.10% APY Boost (added to the 3.30% APY as of 10/20/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/27. Rates are variable and subject to change. Terms apply at sofi.com/banking#4. SoFi Bank, N.A. Member FDIC.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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