A bank holiday is a business day during which financial institutions are closed to the public. These bank holidays are only relevant to physical offline bank branches, while online operations go on for customers.
Banks have holidays too, each of which is equally important. Bank and banking systems are a crucial financial institution in the society, and such as such deserve to go on breaks too.
Holidays cannot fall on two consecutive business days as this could cause disruption of normal financial flow and everyday transactions.
Also note that if a bank holiday falls on a weekend, banks close on the Friday before, or the Monday after. Note that during a bank holiday, online transactions still hold such as deposit, transfer, and payment of bills, most times these won’t reflect in the accounts of customers until bank resumes its daily financial business days.
How It Started
Bank holiday is also a day of emergency bank closure to avert a bank run; this is a rare occurrence by the way.
Bank holidays came about as a result of the emergency banking act of 1933 during the Great Depression in the United States.
Holidays Observed By Banks
Although each country defines its holidays, in the United States bank holidays do not interfere with stock exchange or capital market holidays.
There are major holidays that coincide such as Christmas Day, Memorial Day, New Year, and President’s Day. The first holidays that were observed by banks were either religious or festival holidays.
Easter Monday was the first religious holiday to be observed by bankers. August’s First Monday was the first holiday made exclusive to bankers, and this holiday was celebrated in Wales, England, and Ireland.
Some holidays have been renamed, some have been scrapped, and some have stayed the same.
More dates have been updated by the Federal Reserve to the holidays observed by banks in 2020.
Since these holidays were first observed in the 19th century, it has been religiously followed by financial institutions worldwide and has positively impacted the financial industry.
Several holidays observed by banks are celebrated in the U.S, are as follows:
This holiday is the first holiday taken by bankers in the year. It was not one of the original bank holidays but has been added.
The holiday falls on a holiday that the government issued, which celebrates the New Year.
This is the second holiday taken by banks in a year. It falls on a Memorial Day meant to celebrate the life and times of Martin Luther King and the contributions he made towards the United States of America. Banks go on holiday on this day because it is a Federal holiday and as such, everyone observes it.
The term President’s birthday is celebrated to commemorate a one-time American President, George Washington. It was thereafter turned into a Federal holiday, and subsequently renamed, President’s Birthday.
Banks go on holiday on this day because it is a Federal holiday and as such, everyone observes it.
This is the fourth holiday taken by banks in a year. Memorial Day is a day set aside to honor our fallen heroes; military personnel that died in service to the United States.
This is the Independence Day of the United States of America, and it is a time set aside to commemorate independence. It is a Federal holiday and is automatically a holiday observed by banks.
Labor Day is celebrated in honor of the labor market’s achievements and is celebrated in America.
The labor movement created it, therefore, it is part of the holidays the Federal Reserve mentions as holidays, and as such, banks observe this holiday too.
Christopher Columbus has and had a day in his honor, but it is now also known as Indigenous People’s Day. Both those events are still holidays taken by banks.
This is commonly celebrated in the U.S. This holiday is to honor the veterans that have served the United States, living or dead. It is a holiday the government issued, and banks observe it to pay homage to fallen heroes.
Thanksgiving Day is a Federal holiday in the United State where families gather together to reunite and make merry, it is usually followed by turkeys and varieties of foods. It is also regarded as the beginning of the fall-winter holiday season in the American culture.
According to history, June 8, 1870, president Ulysses S. Grant signed the Holidays Act into law, thus making Thanksgiving a yearly federal holiday in the United States.
Since it is a national holiday, banks go on holiday too. This banking holiday falls on holiday coincidentally.
Christians around the world celebrate this day; it symbolizes Jesus Christ’ birth and is widely celebrated by Christians worldwide. It is a religious holiday and is observed by banks, it is usually a time of giving and festivities.
This is the last holiday taken by banks, it is a holiday issued by the government, which is “boxing day.”
Some banks decided to give its employees a week-long break—from December, which is Christmas Day, to January 1, the New Year. Some, some, however, do not give this luxury.
Bank holidays are essentially important days for banks to go on recess so their staff can rest while online transactions continue so that customers can continue running their businesses.
They are responsible for financial interactions, stabilizing the economy, managing and distributing money, and the bank itself is a tool for fighting inflation.
It is essential to give rest days so as not to feel overworked or overwhelmed. We have associations and acts to think about making bank holidays a necessity, like Federal Reserve and the Emergency Banking Acts.
The financial corporations have been all the better for it, as reports have shown that the holidays sharply increase and maintain productivity levels.
Without the efforts made by the Federal Reserve and the Emergency Banking Acts, we would’ve potentially witnessed a lot of economic crashes.