A bank holiday is a day when most banks close and do not process payments, transfers, or deposits

On a bank holiday, the Federal Reserve and most commercial banks shut down. This means you cannot visit a branch, call customer service for transactions, or expect same-day processing of transfers and deposits. Checks deposited on a bank holiday do not clear until the next business day. Wire transfers and ACH payments initiated on a bank holiday sit in queue until the following day.

The specific days vary slightly by bank and by state. Federal bank holidays — observed by the Federal Reserve and most national banks — include New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving, and Christmas. Some states add their own holidays, and some banks observe additional days. Your bank's website or app will list which days it observes.

The reason banks close is that the Federal Reserve itself is closed, which means the backbone of the payment system — the network that moves money between banks — is not operating. Without access to that network, individual banks cannot clear checks, process wire transfers, or settle accounts with other institutions.

Key Takeaways

  • Bank holidays are days when the Federal Reserve and most commercial banks do not process payments, so deposits and transfers initiated on a holiday will not clear until the next business day.
  • Federal bank holidays include New Year's Day, Independence Day, Thanksgiving, Christmas, and eight others; some states and banks observe additional holidays.
  • Checks deposited on a bank holiday enter the queue but do not clear until the next business day, even if you use a mobile deposit or ATM.
  • Wire transfers and ACH payments (like bill payments) initiated on a bank holiday will process the next business day, not when ready.
  • Debit card purchases and ATM withdrawals work normally on bank holidays because they do not require the Federal Reserve to be open.

Why the Federal Reserve closes on bank holidays

The Federal Reserve is the central bank of the United States and operates the payment networks that move money between banks. When the Fed is closed, those networks stop running. A wire transfer, for example, does not move directly from your bank to another bank — it moves through the Fed's wire system, which only operates when the Fed is open.

The same applies to ACH transfers, which are the system behind direct deposits, bill payments, and most online transfers between accounts. The ACH network is operated by the Federal Reserve and a private operator called The Clearing House, but both follow the Fed's holiday schedule. When the Fed is closed, ACH batches do not process.

Check clearing also depends on the Fed. When you deposit a check, your bank sends it through the Federal Reserve's check clearing system to the bank that issued the check. That bank then deducts the money from the check writer's account. On a bank holiday, this chain stops. The check sits in your bank's queue until the next business day.

What still works on a bank holiday

ATM withdrawals work normally on bank holidays. The ATM is connected to your bank's own systems, not to the Federal Reserve's payment networks. You can withdraw cash, check your balance, and deposit checks into an ATM on a holiday — though the check will not clear until the next business day.

Debit card purchases also work on bank holidays. When you swipe a debit card at a store or online, the transaction goes through Visa or Mastercard's network, not the Federal Reserve. The money is deducted from your account in real time (or within a few hours), and the merchant receives it the same way. The only exception is if your bank has frozen your account or if you have insufficient funds — those checks still happen, but they happen on your bank's own systems.

Credit card payments and purchases work the same way. The credit card network operates independently of the Federal Reserve, so transactions process normally. Your monthly payment to the credit card company will not post until the next business day, but the transaction itself goes through.

How bank holidays affect deposits and transfers

A deposit made on a bank holiday does not clear until the next business day. This is true whether you deposit a check in an ATM, use mobile deposit, or hand it to a teller (if the branch happens to be open for limited hours). The deposit is recorded in your account when ready, but the funds are not available, and the check does not clear, until the next business day.

A wire transfer initiated on a bank holiday will not send until the next business day. If you request a wire transfer on a Friday before a three-day weekend, the wire will not leave your bank until Tuesday. The receiving bank will not receive it until Wednesday. This matters if you are paying a bill with a wire or sending money to another person — the timing shifts by however many holidays fall in between.

An ACH transfer (such as a bill payment or a transfer to another account) initiated on a bank holiday will process the next business day. If you set up a bill payment on a Saturday or Sunday, it processes Monday. If you set it up on a Monday that is a bank holiday, it processes Tuesday. Some banks allow you to schedule transfers in advance, which means you can schedule a transfer to go out on the next business day even if you initiate it on a holiday.

Planning around bank holidays when you need money to move

If you need money to reach another account or person by a specific date, initiate the transfer at least one business day before that date, and account for any bank holidays in between. A wire transfer takes one business day to arrive (sometimes two if the receiving bank is small or in a different country). An ACH transfer takes one to two business days. A check takes three to five business days to clear, longer if it crosses regions.

If a important date falls on a bank holiday, the important date usually shifts to the next business day. If your rent is due on a Monday that is a bank holiday, most landlords will accept payment on Tuesday. If a bill payment is due on a bank holiday, the due date typically moves to the next business day. But do not assume this — check your lease or bill to see what it says about holidays.

If you are waiting for a deposit (such as a paycheck or a tax refund), a bank holiday delays it by one day. If your paycheck normally deposits on Friday and Friday is a bank holiday, it will deposit on Monday. If your tax refund is scheduled to arrive on a Wednesday that is a bank holiday, it will arrive on Thursday.

The difference between bank holidays and weekends

Bank holidays and weekends have the same effect on payment processing — nothing moves — but they are not the same thing. A weekend is Saturday and Sunday, which happen every week. A bank holiday is a specific day that the Federal Reserve observes, which may fall on a weekday or a weekend.

When a bank holiday falls on a weekend, most banks do not observe it on the following Monday. For example, if Independence Day falls on a Saturday, banks close on Saturday (as they always do) but open normally on Monday. The exception is when a holiday falls on a Friday or Monday — then it extends the weekend. If Independence Day falls on a Friday, banks close Friday through Sunday and reopen Tuesday.

The practical effect is the same: if you initiate a transfer on a Friday before a three-day weekend (whether the third day is a bank holiday or just a regular Sunday), the transfer does not process until Tuesday. The reason does not matter to you — the result is what matters.

State-specific bank holidays

Some states observe holidays that the Federal Reserve does not. For example, Texas observes Confederate Memorial Day, and some Southern states observe Robert E. Lee's birthday. If you bank with a state-chartered bank or a credit union that is chartered in that state, the bank may close on that day even though the Federal Reserve is open.

This creates a situation where the Federal Reserve's payment networks are running, but your bank is closed. In that case, you cannot visit a branch or call customer service, but transfers initiated before the bank closed may still process through the Fed's networks. Check your bank's holiday schedule on its website to see which days it observes.

Frequently Asked Questions

If I deposit a check on a bank holiday using my phone, when will it clear?

The check will clear the next business day, not the day you deposit it. Mobile deposit works the same way as ATM deposit — the image is captured when ready, but the check does not move through the Federal Reserve's clearing system until the next business day. You may see a temporary credit in your account, but the funds are not available until the check clears.

Can I send a wire transfer on a bank holiday?

You can request a wire transfer on a bank holiday, but it will not send until the next business day. If your bank's website or app allows you to schedule transfers, you can schedule it to send on the next business day. If you need the money to arrive by a specific date, initiate the wire at least two business days before that date.

Do credit unions close on bank holidays?

Most credit unions close on the same days as banks, but not all. Some credit unions observe different holidays depending on their charter and location. Check your credit union's website to see which days it observes. Even if your credit union is open, the Federal Reserve's payment networks are still closed, so transfers and check clearing will be delayed.

What happens if I need to pay a bill that is due on a bank holiday?

Most billers will accept payment on the next business day if the due date falls on a bank holiday. However, check your bill or contract to confirm. If you are paying by check, mail it at least five business days before the due date to account for mail time and clearing time. If you are paying online, set up the payment for the business day before the due date.

Will my paycheck deposit if the bank holiday falls on payday?

Your paycheck will deposit on the next business day. If your employer normally deposits on Friday and Friday is a bank holiday, the deposit will arrive on Monday. If your employer deposits on a day that is a bank holiday, confirm with your payroll department when the deposit will arrive — some employers deposit the day before, and some deposit the day after.