Bank holidays are days when banks are legally closed, often coinciding with national holidays. Transactions are not processed on these days, and essential workers may still work. In the US, national holidays include New Year’s Day, Thanksgiving, and Christmas, while in the UK, they include New Year’s, Christmas, and various Mondays in May and August. The term can also refer to a day when banks are closed to address banking system issues.
A bank holiday is a day when banking institutions are legally closed. Bank holidays often 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 also often a bank holiday. However, bank closures cannot be limited to national holidays. In some locations, banks observe regional holidays, as well as closing dates that are significant only between banks and other financial or government institutions.
No matter where a bank is located, the term bank holiday means that the bank is closed on a specific day. However, this does not include weekend days when the bank would normally be closed. Bank transactions are not processed on holidays, even if they were initiated before the start of the holiday. Instead, they are generally held until the next business day for normal processing.
Public holidays often fall on days when much of a country’s or region’s workforce would have time off. For example, if employees who are not essential to the security and general operation of a region typically have a day off, that day may also be marked as a bank holiday. Essential workers include utility employees and those who provide emergency services, such as police officers and firefighters. Public health workers are also considered essential workers in most cases.
In the United States, New Year’s Day, Thanksgiving Day, and Christmas are national holidays. Banks are also closed on Presidents’ Day, Memorial Day, Independence Day, and Labor Day. Veterans Day, Dr. Martin Luther King, Jr. Day, and Columbus Day are also United States bank holidays.
In the United Kingdom, public holidays differ from those in the United States. They include New Years and Christmas, Boxing Day, Good Friday and Easter. Banks are also closed on the first and last Mondays in May, which are known as early May and spring bank holidays, respectively. UK banks are also closed for the Summer Bank Holiday, which falls on the last Monday in August.
The term bank holiday does not always refer to a public holiday or celebration of some kind. It can also be used to describe a day when a bank or group of banks is closed to control problems or failures in a bank or banking system. 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 banking problems.
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