Bank holidays stop most financial institutions from processing transactions

A bank holiday is a day when banks and financial institutions are closed and do not process payments, transfers, or other transactions. On these days, the Federal Reserve does not operate, clearing houses do not move money between institutions, and bank staff are not working. If you send a transfer on a bank holiday, it will not move until the next business day.

Bank holidays are different from public holidays. Some public holidays — like Christmas and Thanksgiving — are also bank holidays. Others, like Veterans Day, are not. The Federal Reserve publishes an official list each year of which days will close the banking system.

The practical effect is straightforward: money does not move on bank holidays. A transfer you initiate on a Friday evening might not clear until Monday if Monday is a regular business day, but if Monday is a bank holiday, it will not clear until Tuesday.

Key Takeaways

  • Bank holidays are days when the Federal Reserve and most financial institutions do not process transfers, payments, or other transactions.
  • Not all public holidays are bank holidays — Veterans Day and some others do not close the banking system.
  • The Federal Reserve publishes an official list of bank holidays each year, and most banks follow the same schedule.
  • A transfer initiated on a bank holiday will not process until the next business day after the holiday ends.
  • Weekends are treated the same way as bank holidays — money does not move on Saturdays or Sundays.

The official Federal Reserve bank holidays

The Federal Reserve recognizes ten bank holidays each year. These are: New Year's Day (January 1), Birthday of Martin Luther King Jr. (third Monday in January), Presidents' Day (third Monday in February), Memorial Day (last Monday in May), Juneteenth National Independence Day (June 19), Independence Day (July 4), Labor Day (first Monday in September), Columbus Day (second Monday in October), Veterans Day (November 11), Thanksgiving Day (fourth Thursday in November), and Christmas Day (December 25).

When a holiday falls on a weekend, the Federal Reserve observes it on the nearest weekday. If Christmas falls on a Saturday, the banking system closes on Friday. If New Year's Day falls on a Sunday, the banking system closes on Monday.

Your individual bank may also observe additional holidays beyond the Federal Reserve list, particularly if it operates in a specific state or region. Some banks close on days like Good Friday or state-specific holidays. Check your bank's website or call to confirm which days your institution will be closed.

How bank holidays affect transfers and payments

When you initiate a transfer on a bank holiday, your bank receives the instruction but does not send it to the receiving bank. The transfer sits in a queue until the next business day. From the receiving bank's perspective, the transfer arrives on that next business day, and they process it according to their normal timeline.

This matters most for time-sensitive payments. If you need to pay a bill by a certain date and you initiate the payment on a bank holiday, the payment will not reach the creditor until after the holiday. If that date is a important date, you may be late. The safest approach is to initiate payments at least one business day before they are due.

Wire transfers and ACH transfers both follow this rule. A wire transfer initiated on a Friday evening will not move until Monday if Monday is a business day. If Monday is a bank holiday, the wire will not move until Tuesday. ACH transfers, which typically take one to three business days anyway, will add an extra day if a bank holiday falls within that window.

Weekends and bank holidays work the same way

The banking system treats weekends the same as bank holidays — no transactions process on Saturdays or Sundays. If you send a transfer on Saturday, it will not move until Monday. If Monday is a bank holiday, it will not move until Tuesday.

This is why banks often say transfers take "one to three business days." The count includes only days the banking system is actually open. A transfer sent on Friday afternoon might not arrive until the following Wednesday if Monday is a bank holiday, even though only three calendar days have passed.

How to plan around bank holidays

The simplest approach is to initiate transfers and payments on a regular business day — Monday through Friday, when the banking system is open and no holiday is observed. If you know a bank holiday is coming, send your transfer the day before.

If you have a bill due on or near a bank holiday, send the payment at least two business days before the due date. This gives the banking system time to process the transfer even if a holiday falls in the middle. Many people set up automatic payments to avoid this problem entirely — the bank will initiate the payment on the schedule you set, and if that day is a holiday, the system automatically moves it to the next business day.

For time-sensitive payments, wire transfers are faster than ACH transfers, but they still do not process on bank holidays. If you absolutely must move money on a day the banking system is closed, you will have to wait until the next business day.

Why the banking system closes on holidays

The Federal Reserve closes on bank holidays because the clearing houses that move money between institutions also close. These clearing houses — like the Automated Clearing House (ACH) and the Fedwire system — are operated by the Federal Reserve and do not run on holidays. Without these systems, individual banks cannot send money to each other.

Banks themselves could theoretically stay open on a bank holiday and accept deposits or let you withdraw cash, but they cannot process transfers or payments because the infrastructure to move that money does not exist. Most banks choose to close entirely on bank holidays rather than stay open with limited service.

Frequently Asked Questions

Can I withdraw cash from an ATM on a bank holiday?

Yes. ATMs run 24 hours a day and do not close on bank holidays. You can withdraw cash, check your balance, and deposit checks at an ATM on any day. However, deposited checks will not be processed until the next business day after the holiday.

Will my direct deposit arrive on a bank holiday?

No. Direct deposits are processed through the ACH system, which does not run on bank holidays. If your employer sends your paycheck on a bank holiday, it will arrive the next business day. Most employers time payroll to arrive on a regular business day to avoid this delay.

What if I need to send money on a bank holiday?

You cannot initiate a transfer that will process on a bank holiday. If you try to send money through your bank's website or app on a holiday, the system will accept the instruction but will not process it until the next business day. Some banks let you schedule transfers in advance for a specific date.

Do credit card payments process on bank holidays?

Credit card payments sent through ACH or bank transfer will not process on a bank holiday, just like any other transfer. If your payment is due on a bank holiday, the due date typically moves to the next business day. Check your credit card statement or call your card issuer to confirm their specific policy.

Is Veterans Day a bank holiday?

Yes. Veterans Day (November 11) is on the Federal Reserve's official list of bank holidays, so the banking system closes and transfers do not process. If November 11 falls on a weekend, the Federal Reserve observes the holiday on the nearest weekday.