Cold cash gains new warmth as holiday gift in hard times

In many households, something with a little less flash will be under the Christmas tree: cash, certificates of deposit, and college savings accounts. More than 44 percent of consumers say they are planning to give the gift of green this holiday season because of the economy, compared with 41.9 percent in 2008, according to a Western Union survey.

And as the nation has rekindled its sense of thrift - today’s personal savings rate of 4.5 percent is double that of a year ago - financial institutions are offering a flurry of deals to entice shoppers looking for the perfect savings account, certificate of deposit, or stocks or gold bullion for their friends and family.

Hundreds of consumers have already taken up Citizens Bank on its “Gift of Savings’’ offer launched just a week ago, which features an extra $10 to people who open an account with at least $100 on behalf of a loved one. Service Credit Union in New Hampshire opened at 5 a.m. the day after Thanksgiving with doorbuster deals like a three-month CD with 10 percent interest. The bank sold 2,224 CDs in three hours, about 20 times the normal daily volume. Western Union recently slashed its fees to send $50 in cash from $12 to $5 and the company also expects an uptick in activity.

Americans used to consider giving cold, hard cash at Christmas too and impersonal. But the sheer need for liquidity during tough economic times - and people’s recognition that they ought to be better prepared in the future - has helped remove the stigma.

“People are asking for more cash. Consumers are saying they have other priorities,’’ said NPD Group’s chief retail analyst, Marshal Cohen, who is projecting a boost in cash as gifts this holiday season. “They would love the gift, but they need to pay off their grocery bill before they start worrying about a Polo shirt.’’

For the first time, Vana Lambrinos of East Sandwich is handing out money for all of her holiday presents. She’s even considering giving the cash before Christmas because there are so many sales, and she believes the money will stretch a little farther for recipients.

“My husband and I used to shop until we literally dropped. But that was then, and this is now,’’ Lambrinos said. “Cash is king; I just wish the king was bigger.’’

Alice McCarter of Somerville is hoping her gifts this year will encourage loved ones to do more saving than spending.

She decided to open a savings account at Leader Bank for her grandson Jack when he celebrated his first birthday this summer. And for Christmas, she has deposited $100 in the account rather than plying the tot with toys. So far, Jack’s stash has grown to $318.15.

“This is going to last longer than some toy. And he doesn’t even know what I give him. He is as happy with an empty tea bag box as with anything else,’’ McCarter said. “This money will grow and have a real impact on his life some day.’’

Leader Bank in Arlington began marketing its children’s savings accounts as presents this year, and sales soared to 409 accounts from 113 last year.

Leader’s president, Sushil K. Tuli, said many customers are also buying the bank’s gold bullion coins as gifts for the holiday: sales have jumped to 210 this year compared to 127 in 2008. In November alone, the bank sold 41 coins, compared to only three during the same period last year.

“We have certainly noticed a strong leaning of our customers toward solid financial products as part of their annual gift giving this year,’’ Tuli said.

Banks typically don’t offer spur-of-the moment products, said Jim Bruene, editor of Online Banking Report. Such promotions around the holiday are a new phenomenon. ING Direct, for example, featured specials on Black Friday, typically the busiest shopping day of the year. The ING offers included a $121 bonus for opening a checking account and a CD with 2 percent interest.

“It makes sense to do this during the holidays, especially when people are being more conservative with their spending,’’ Bruene said. “I expect these kinds of financial gifts will be more popular because it meets the psyche of what we’re seeing out there.’’

Some consumers are putting investments on the wish lists they give to relatives during the holiday season. Sean Tomany, of Glastonbury, Conn., recently convinced his mother to open college savings accounts for his two children, ages 8 and 6, and his 6-year-old nephew for the holiday.

“The kids will get the cards but it’s the parents who will appreciate this,’’ Tomany said. “Now is the time to invest. It’s a great opportunity and she’s helping us do this.’’

The demand for frugality is even shaking up the gift card industry.

Consumers wary of retail bankruptcies and more conscious of spending habits are turning away from store-branded gift cards - the vast majority of cards sold - and instead opting for prepaid debit cards that allow people to shop anywhere.

TowerGroup, a Needham market research firm, is projecting that spending will fall by 7 percent on store gift cards while increasing 3 percent on general gift cards.

“These general cards let people shop at Wal-Mart, but you don’t have to give them a Wal-Mart gift card for the holiday,’’ said Brian Riley, research director at TowerGroup. “You can buy gas, milk, and eggs if you want.’’

Jenn Abelson can be reached at abelson@globe.com.