DEFINITION of 'Business Day'

A business day is a popular unit of time measure that typically refers to any day in which normal business operations are conducted. This is generally considered to be Monday through Friday from 9am to 5pm local time, and excludes weekends and public holidays. Within the securities industry, any day the financial markets are open for trading is considered to be a business day. As a rule of thumb: in the U.S., there are generally considered to be 252 trading days in a year.

BREAKING DOWN 'Business Day'

Consumers often encounter the issue of a business day when depositing a check that needs to clear. Depending on the size of the check being deposited and the location of the issuer it can take between two and 15 business days for a check to clear, and those days do not include weekends or observed public holidays, which can extend the time that a depositor needs to wait to access those funds. When conducting international business transactions, individuals and companies should be aware that business days may vary by country due to a difference in the public holidays observed.

Other common business day considerations arise when multinational entities engage in international transactions, which typically require additional business days to settle, relative to routine domestic transactions. Various financial contracts and instruments also have an array of different settlement time periods, some ranging from a single day or T+1 in financial parlance to other lengths requiring three business days. Market sophistication and liquidity often determine transaction settlement time periods.

In many ways, improvements in communication channels and capabilities have blurred the traditional business day convention, as businesses and individuals can now conduct business nearly 24/7.

  1. Cleared Funds

    Cleared funds are the balance in an account that is able to be ...
  2. Settlement Period

    The period of time between the settlement date and the transaction ...
  3. Transaction Date

    A transaction date in the date upon which a trade takes place ...
  4. Conduct Costs

    Conduct costs are any payments made by a bank in the settlement ...
  5. Closing Quote

    A security's final regular-hours trading price for the day. Because ...
  6. Check Hold

    A check hold denotes the maximum number of days that a bank can ...
Related Articles
  1. Small Business

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  2. Trading

    Best Time(s) of Day, Week & Month to Trade Stocks

    Is 9:00am or Noon better to buy stock? Best day? What about best month? Here's how time affects trading decisions based on daily, weekly and monthly trends
  3. Investing

    The Handy Guide To Global Stock Market Holidays

    Exchanges close on holidays--which vary by country. If you're a global trader, it's useful to have this handy Investopedia bank holiday reference.
  4. Small Business

    The 4 Most Common Reasons a Small Business Fails

    Discover the most common reasons small businesses fail, including capital formation, management concerns, planning issues and marketing missteps.
  5. Small Business

    Business Startup Costs: It's in the Details

    Don't overlook the details when starting up a business; it's the small expenses that have the potential to make or break a great idea.
  6. Small Business

    5 Biggest Challenges Facing Your Small Business

    Thinking about starting your own business? Read this article to get a leg up on what you could face.
  7. Trading

    A Guide to Day Trading on Margin

    Buying on margin is a good option if you don't have the cash to day trade.
  8. Personal Finance

    What Is A Business Analyst And How Much Do They Make?

    Business Analysis has been a buzzword as a career option. Here is what business analysts do and how much they earn in salary and compensation.
  9. Small Business

    5 Expensive Small Business Mistakes

    Don't just open the doors and bring in the customers - consider these five factors before launching your own business.
  1. How long does it take a check to clear?

    It usually takes two days for a check to clear, but in some cases it may take longer. Discover how banks treat large deposits ... Read Answer >>
  2. How do mutual fund trades clear and settle?

    Learn how mutual fund trades are cleared and settled, and when the money owed must be available or the proceeds due must ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center