What Is a Bank Holiday?

A bank holiday is a business day during which financial institutions are closed. Bank holidays are most relevant for physical branch locations because many online banking services continue to operate.

The dates are major federal holidays when most financial institutions—stock exchanges, brokerage firms, and traders—also take the day off. Although rare, bank holidays can also be declared to prevent bank runs.

Key Takeaways

  • Financial institutions close on bank holidays.
  • American bank holidays tend to fall on federal holidays celebrated in the United States.
  • Online banks may continue service during bank holidays, depending on the financial institution.
  • Even so, deposits will not be transferred to your bank account on a bank holiday.
  • Bank holidays don't always coincide with the stock market holidays.

How a Bank Holiday Works

Each country defines its own bank holidays. In the United States, scheduled bank holidays do not necessarily coincide with stock market or capital market holidays. That is, there are certain stock exchange holidays that are not recognized as bank holidays.

However, most school, business, and stock exchange calendars reflect closures on bank holidays that are also major holidays, such as New Year's Day, Memorial Day, and Presidents Day. In 2021, according to the Federal Reserve, bank holidays are as follows:

  • Jan. 1 (New Year’s Day)
  • Jan. 18 (Martin Luther King Day)
  • Feb. 15 (Washington's Birthday)
  • May 31 (Memorial Day)
  • June 18 (Juneteenth Observed)
  • July 5 (Independence Day Observed)
  • Sept. 6 (Labor Day)
  • Oct. 11 (Indigenous People’s Day)
  • Nov. 11 (Veterans Day)
  • Nov. 25 (Thanksgiving Day)
  • Dec. 24 (Christmas Day Observed)

The 2021 New York Stock Exchange holiday calendar is similar, but note that the market closes early (at 1 p.m. EST) on one day, Good Friday is observed, and Juneteenth and Indigenous People's Day aren't:

  • Jan. 1 (New Year’s Day)
  • Jan. 18 (Martin Luther King Day)
  • Feb. 15 (Washington's Birthday)
  • April 2 (Good Friday)
  • May 31 (Memorial Day)
  • July 5 (Independence Day Observed)
  • Sept. 6 (Labor Day)
  • Nov. 25 (Thanksgiving Day)
  • Nov. 26 (1 p.m. close in the U.S.)
  • Dec. 24 (Christmas Day Observed)

Bank holidays do not incorporate early closes the way stock exchange holidays do. Also keep in mind that if a holiday falls on a weekend, banks and stock exchanges close on the Friday before or the Monday after.

Bank holidays never occur for two consecutive business days because this could cause too large a disruption for everyday transactions and financial flows.

Special Considerations

Most online banking systems will still allow customers access, even on bank holidays. Popular online banking services include deposits, withdrawals, transfers, and bill payments (essentially, the majority of the basic transactions that an individual or retail customer would need throughout the day). It's important to point out that while you can make deposits on a bank holiday, they won't be added to your account as they normally would 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.

Although it is a rare occurrence, a bank holiday can also refer to a day of an emergency bank closure to avert a bank run. This type of bank holiday originated as a result of the Emergency Banking Act of 1933 during the Great Depression.

How Many Bank Holidays Are There in 2021?

There are 11 bank holidays in the United States in 2021: New Year’s Day, Martin Luther King Day, Presidents Day, Memorial Day, Juneteenth, Independence Day, Labor Day, Indigenous People’s Day, Veterans Day, Thanksgiving, and Christmas. Juneteenth, which celebrates the end of slavery, became a federal holiday in 2021.

How Is Online Banking Impacted by Bank Holidays?

Most banks with online capabilities allow customers to make deposits, withdrawals, pay bills, and check balances on bank holidays. But deposits made on a bank holiday typically don’t become available in your account until the next regular business day.

What Happens If a Holiday Falls on a Weekend?

When a federal holiday falls on a weekend, banks close the Friday before or the Monday after. For example, Christmas Day falls on a Saturday in 2021, but the bank holiday will be observed on Dec. 24.