What is a Bank Holiday?
A bank holiday is a day on which banking institutions are legally closed. Bank holidays frequently coincide with a country’s national holidays. For example, if New Year's Day is a national holiday in a particular country, that day is often a bank holiday as well. Bank closures may not be limited to national holidays, however. In some places, banks observe regional holidays as well as closure dates that are significant only among banks and other financial or government institutions.
No matter where a bank is located, the term bank holiday means the bank is closed on a specific day. This, however, does not include weekend days on which the bank would normally close. Bank transactions are not processed on bank holidays, even if they were initiated before the start of the holiday. Instead, they are typically held until the next business day for normal processing.
Bank holidays often fall on days when much of a country or region's workforce would have time off work. For example, if employees who are not essential to a region's safety and general operation usually have a day off, that day may be marked as a bank holiday as well. Essential workers include utility employees and those who provide emergency services, such as police officers and fire fighters. Public health care workers are also considered essential workers in most cases.
In the United States, New Year's Day, Thanksgiving Day, and Christmas are national bank holidays. Banks are also closed on Presidents Day, Memorial Day, Independence Day, and Labor Day. Veteran's Day, Dr. Martin Luther King, Jr. Day, and Columbus Day are United States bank holidays as well.
In the United Kingdom, bank holidays differ from those in the United States. They include New Year’s and Christmas Day, Boxing Day, Good Friday, and Easter. Banks also close on the first and last Mondays in May, which are referred to as Early May and Spring Bank Holiday, respectively. United Kingdom banks also close on Summer Bank Holiday, which falls on the last Monday in August.
The term bank holiday doesn't always refer to a public holiday or a celebration of some sort. It can also be used to describe a day on which a bank or group of banks is closed to control problems or failure in a bank or system of banks. In 1933, United States President Franklin Roosevelt declared a four-day bank holiday in response to widespread bank failures. This gave the government and banks time to regroup and develop solutions to the banking issues.
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Since Thanksgiving falls on a Thursday, some banks might be closed on the day after Thanksgiving, making it a nice, long holiday weekend.
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