Fed Survey: Even Amid Pandemic, Unbanked Share Dips

The share of unbanked American adults dipped to 5% in 2020, according to the Federal Reserve’s annual Report on the Economic Well-Being of U.S. Households released today. The figure was down from 8% in 2015 and 6% in 2019. Based on a survey fielded in late 2020, the report showed the share of adults considered “fully banked”—that is, who had a bank account and also did not use a number of nonbank financial alternatives—rose to 81% in 2020. The figures come after a campaign by the American Bankers Association to promote the opening of bank accounts to securely receive economic impact payments and the growth of Bank On-certified accounts designed to meet the needs of the unbanked.

The survey also saw savings practices hold steady in the aggregate. Sixty-four percent (up 14 points from 2013) said they could cover a $400 emergency expense in cash, a benchmark often cited by policymakers. The figure reached as high as 70% in surveys fielded in July 2020, when many had received economic impact payments, enhanced unemployment or other relief funds. The survey found that 26% of non-retired respondents reported having no retirement savings or pension, the same as in 2019 but marking progress from previous years.

While the headline figure showed that three quarters of U.S. households surveyed last fall said they are “doing OK” or “living comfortably”—identical to figures from 2018 and 2019 and up 13 percentage points from 2013—it masked a divergence for those laid off during the coronavirus crisis. The share of those not laid off who were at least doing OK rose, but it fell two points among those who were laid off but since found new work and 14 points for those laid off who were still not working. Overall, the share of Americans reporting that they were worse off financially from a year before shot up 10 points to 24% in 2020.