Why Do Banks Close So Early And How to Bank After Hours?

Have you ever needed to deposit a cheque after work only to find the bank has already been closed?

When you find yourself in this situation, the question on your mind would have most likely been, "Why do banks close so early?". 

This article explains why the bank closed early and what to do if you need banking services outside regular hours.

What Time Does the Bank Close?

Banks typically close at 5 p.m., however, banking hours can differ between banks and branches. Generally, they open between 8 a.m. and 9 a.m. and close by 5 p.m. on weekdays. Some banks may close earlier at 4 p.m., while others extend hours until 6 p.m. or 7 p.m.

Most banks are closed on weekends, though a few may open on Saturdays, and very few banks open on Sundays.

To find the exact closing time for your local branch, it’s best to check your bank's website or call them directly. 

Reason 1: Operation Costs

The longer banks stay open, the higher their operating costs. 

At the end of the day, most banks are businesses, and most businesses aim to generate profit. Higher costs lead to decreased profits, and therefore, closing earlier can allow banks to reduce costs spent on electricity, security, workers, and so on.

These costs add up over the year. So, while closing an hour earlier might save only a small amount each day, it becomes a significant sum in the long run.

Reason 2: The Books

In the past, when bank records hadn’t yet been digitized, ledgers had to be updated by hand.

After opening hours (usually after 5:00 PM), the banks would be closed to customers. However, during this time, bank workers would be going through the current day’s banking records and making sure that everything is accurate.

This ensured that they always had enough funds in their accounts because if there were a large number of outgoing payments, then this would generally mean that the bank would have to borrow money from other banks to use in the coming working day.

Making sure that the books were correct at the end of a working day was, therefore, a very important process to ensure the bank’s smooth operation the following day. 

Over time, these operating hours of banks become the norm.

Reason 3: Safety

Most physical bank branches store cash as well as other valuable items, which can attract unwanted attention.

Hence, bank robbery is a real concern for bank managers.

Bank crime statistics show that over 1,700 bank robberies took place in banks around the United States in 2021 alone, with the largest portion of robberies taking place between 3-6 PM on Mondays and Fridays.

Additionally, the number of robberies that happened outside of bank operating hours is lower than the number of robberies that occurred while banks were still open.

Overall, closing earlier helps ensure the safety of the bank’s valuables and employees. 

Reason 4: Banks Have ATMs and CDMs

ATMs or “Automated Teller Machines” can be accessed by customers 24 hours a day, 7 days a week. 

ATMs can perform basic tasks, with the most common being cash withdrawals and transfers from savings accounts.

Additionally, there are Cash Deposit Machines (CDMs), similar to ATMs, which share most functionalities. However, CDMs can also accept cheques and cash deposits.

The peak time for cheque deposits used to be between 6 p.m. and 7 p.m. However, with the introduction of ATMs and CDMs, banks no longer need to stay open beyond regular working hours to accommodate that demand.

In the past, the tasks performed by ATMs and CDMs used to be done by bankers or tellers, who are paid by the hour.

In terms of cost, an ATM costs around USD 2,000 to USD 8,000, with average maintenance costs of USD 40 to USD 60 per month (USD 480 to USD 720 yearly). Comparing this to the average banker's salary of slightly over $40,000 per year shows the cost-effectiveness of ATMs. 

A key distinction between bankers and ATMs is that bankers (as well as tellers) usually have to handle more complex transactions that can’t be performed by a machine or large/important transactions.

What If You Need Banking Services When Banks Are Closed?

We've discussed why banks may close early. Now, the crucial question is: What if you need to bank outside regular hours? In this section, we've covered flexible options for banking anywhere, anytime, beyond the usual work hours. 

Let's explore three main alternatives.

Use Mobile and Internet Banking

If you need banking services outside regular branch hours, consider exploring their Internet banking or mobile banking platforms.

Most banks offer mobile and online platforms on which users can perform tasks anywhere from signing up for a credit card to instructing a large international transfer, which used to have to be done at physical bank branches.

Switch to Online Banks

Online banks are financial institutions that operate independently or as digital divisions of traditional banks, providing services similar to brick-and-mortar banks but exclusively accessible online via mobile phones or computers. They may not have any physical branches. 

This option is convenient for those unable to visit physical branches during regular hours. 

Examples of online banks include Axos Bank, which offers a range of services through its online platform, and Varo, which provides online high-yield savings accounts and other online financial products with FDIC-insured deposits.

Switch to Neobank

Neobanks are often financial institutions operating independently as financial technology service providers. They are not traditional banks but may partner with traditional banks for security and deposit insurance.

Neobank services are exclusively online, allowing you to open and manage virtual accounts through their website or mobile app without the need for physical branch visits.

However, some neobanks may have limitations, such as not offering services like loans or credit cards. 

The Takeaway

Put simply, banks close early mainly to save costs, update their records, and ensure security. 

However, with the rise of ATMs, CDMs, and Internet banking, you can still do many banking tasks even when the branches are closed. 

If you need services outside regular hours, you can also consider switching to an online bank or a neobank. These options let you handle your banking anytime, offering a convenient solution to the limited hours of physical bank branches.