What Is a Banking Holiday Definition Schedule and Impact
A bank holiday is a business day when financial institutions are closed, although many online banking services continue to operate. These holidays usually align with major federal holidays and can also be declared to prevent bank runs.
Key takeaways:
– Financial institutions close on bank holidays.
– American bank holidays often coincide with federal holidays in the United States.
– Some online banks may continue to offer limited services on bank holidays.
– Deposits will not be transferred to your bank account on a bank holiday.
– Bank holidays do not always align with stock market holidays.
Each country defines its own bank holidays, and in the United States, they may not coincide with stock market holidays. However, most school, business, and stock exchange calendars reflect closures on bank holidays that also fall on major holidays like New Year’s Day, Memorial Day, and Presidents Day.
Bank holidays do not include early closes like stock exchanges. If a holiday falls on a weekend, banks and stock exchanges will close on the Friday before or the Monday after the holiday. Bank holidays are also strategically planned so that they never occur on two consecutive business days to avoid disrupting everyday transactions and financial flows.
On bank holidays, most online banking systems still allow customers access to basic transactions such as deposits, withdrawals, transfers, and bill payments. However, deposits made on a bank holiday will not be added to your account until the next regular business day.
In the United States, some well-known online banks include Ally Bank, Bank5 Connect, Discover Bank, and Synchrony Bank.
In rare cases, a bank holiday can refer to an emergency bank closure to prevent a bank run, as seen during the Great Depression with the Emergency Banking Act of 1933.
There are multiple bank holidays in 2023, and online banking is generally unaffected by these holidays. However, deposits made on a bank holiday will only become available in your account on the next regular business day.
If a holiday falls on a weekend, banks and stock exchanges will adjust their closures to the Friday before or the Monday after the holiday.
