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 2020, according to the Federal Reserve, bank holidays are as follows:

  • January 1 (New Year’s Day)
  • January 20 (Martin Luther King Day)
  • February 17 (Washington's Birthday)
  • May 25 (Memorial Day)
  • July 4 (Independence Day)
  • September 7 (Labor Day)
  • October 12 (Indigenous People’s Day)
  • November 11 (Veteran’s Day)
  • November 26 (Thanksgiving Day)
  • December 25 (Christmas Day)

The 2020 New York Stock Exchange holiday calendar is similar, but note that the market closes early (at 1 p.m. EST) on three days and that Good Friday is observed:

  • January 1 (New Year’s Day)
  • January 20 (Martin Luther King Day)
  • February 17 (Washington's Birthday)
  • April 10 (Good Friday)
  • May 25 (Memorial Day)
  • July 3 (1 p.m. close in the U.S.)
  • July 4 (Independence Day)
  • September 7 (Labor Day)
  • November 26 (Thanksgiving Day)
  • November 27 (1 p.m. close in the U.S.)
  • December 24 (1 p.m. close in the U.S.)
  • December 25 (Christmas Day)

Bank holidays do not incorporate early closes as with stock exchange holidays. 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 of a disruption for everyday transactions and financial flows.

Special Considerations

Most online banking systems will still allow access by customers, 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 get 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 banking 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 in the United States.