What Is a Business Day?
A business day refers to any day in which normal business operations are conducted. In Western countries, a business day lasts eight hours and is considered to be Monday through Friday from 9 a.m. to 5 p.m. local time. Business days do not include weekends and public holidays. Within the securities industry, any day the financial markets are open for trading is considered to be a business day.
Key Takeaways
- A business day refers to the typical hours in a day when normal business operations take place.
- A business day is normally Monday through Friday, from 9 a.m. to 5 p.m., excluding holidays.
- Consumers often encounter business days with regard to settling or clearing financial transactions or for the delivery of goods or services.
- When conducting international transactions, keep in mind that the workweek may be different in the country with which you are doing business.
Understanding Business Days
Consumers often encounter the issue of a business day when depositing a check that needs to clear. Depending on the size of the check being deposited and the location of the issuer, it can take between two or more business days for a check to clear, and those days do not include weekends or observed public holidays, which can extend the time that a depositor needs to wait to access those funds.
When conducting international transactions, individuals and companies should be aware that business days may vary by country due to differences in the public holidays observed.
Though most countries work around 40 hours per week from Monday to Friday, there is enough variance out there that those doing international business should verify the days of the business week in the country with which they're doing business.
For example, when doing business with Middle Eastern countries, keep in mind that many of them employ a Sunday through Thursday workweek. In some countries, like India, Mexico, and Columbia, the workweek is Monday through Saturday.
Business days are also used commonly in conveying when something will be delivered or taken care of. For instance, a piece of mail may be guaranteed to be delivered within three business days. This can make a huge difference, as a four-business-day delivery guaranteed package may not arrive until seven days after it is sent if a weekend is involved.
Fast Fact
As a rule of thumb, in the U.S., there are generally considered to be 252 trading days in a year.
Special Considerations
Other common business day considerations arise when multinational entities engage in international transactions, which typically require additional business days to settle, relative to routine domestic transactions, especially if countries have different workdays.
Various financial contracts and instruments also have an array of different settlement periods, some ranging from a single day or T+1 in financial parlance to other lengths requiring three business days. Market sophistication and liquidity often determine transaction settlement time periods.
In many ways, improvements in communication channels and capabilities have blurred the traditional business day convention, as businesses and individuals can now conduct business nearly 24/7 using electronic methods.
Does One Business Day Mean Tomorrow?
A reference to one business day usually refers to one calendar day or 24 hours. Depending on when a transaction is completed, it could mean tomorrow, though it could also mean the day after.
Are All Business Days the Same?
No, not all business days around the world are the same. For example, in most Muslim countries, Friday is a day off due to the religious importance of the day. Weekends in these countries are often Friday and Saturday, so the business days would run from Sunday to Thursday.
What Time Does a Business Day End?
A business day has traditionally ended at 5 p.m., however, this can vary on the type of business and the locality of a business.
The Bottom Line
A business day is a unit of time that conveys when most businesses and services are open to the public or consumers. In the West, a business day is usually every day from Monday to Friday from the times of 9 a.m. to 5 p.m. Many transactions are conducted in reference to business days. For example, if someone places an order on Thursday and it is set to arrive in five business days, those five business days will not include Saturday and Sunday.
