Unbanked

Unbanked refers to individuals or households who do not have a checking or savings account at a bank or credit union. As of 2021, approximately 4.5% of US households (about 5.9 million) were unbanked. This represents the lowest unbanked rate since 2009, though disparities persist among different demographic groups. The most common reason cited for being unbanked is not having enough money to meet minimum balance requirements, with 40.1% of unbanked households stating this as the primary factor. Other reasons include distrust of banks, high fees, and lack of proper identification. Being unbanked can have significant consequences, including limited access to safe and affordable financial services, reliance on costly alternative financial services like check-cashing stores and payday lenders, increased vulnerability to financial fraud, and difficulty building credit or saving money.

Key customers and partnerships

The unbanked population in the US is disproportionately made up of low-income households, racial and ethnic minorities, and individuals with lower education levels. Black households have the highest unbanked rate at 11.3%, followed by Hispanic households at 9.3%, compared to 2.1% for white households. People with disabilities are about four times more likely to be unbanked than those without disabilities. Geographically, Southern states tend to have higher unbanked rates, with Mississippi having the highest at 12.8% as of 2021. Several initiatives aim to increase financial inclusion for the unbanked, including partnerships between financial institutions and community organizations. For example, the Cities for Financial Empowerment Fund has developed standards for low-fee bank accounts, with over 290 accounts available at more than 46,490 branches nationwide that meet these "BankOn" certification criteria.