Nearly 96% of U.S. households had a depository institution account last year, according to the FDIC’s 2021 National Survey of Unbanked and Underbanked Households, released today. An estimated 5.9 million households—representing 4.5% of total households—were unbanked, which is the lowest unbanked rate since the biennial survey began in 2009.
Approximately 1.9 million more households were banked than in 2019, when the last survey was conducted. While unbanked rates were higher among some racial and ethnic minority groups, the agency noted the gaps had shrunk since 2019, with the unbanked rate falling by 2.5 percentage points for Black households, 2.9 points for Hispanic households and 9.4 percent for Native American and Alaska Native households, compared with 0.4 point decline for white households.
About 21.7% of unbanked households cited “don’t have enough money to meet minimum balance” as the main reason for not having an account, according to the survey. “Don’t trust banks” was the second most-cited main reason. The proportion of unbanked households citing fees or minimum balance-related reasons for not having a bank account fell from 38% in 2019 to 29.2% in 2021.
The FDIC also collected data about the much broader “underbanked” category, which was not measured in the 2019 survey due to methodological concerns and which includes households that used nonbank products such as money orders, rent-to-own services and payday loans. An estimated 18.7 million households—or 14.1%—used nonbank financial products and services in 2021, according to the agency.
In a statement, ABA President and CEO Rob Nichols said a 17% decrease in the number of unbanked from 2019 to 2021 “shows that a concerted effort by the banking industry, government agencies and community groups can make a meaningful difference in expanding access to banking services, even in the middle of a global pandemic.”
“America’s banks’ strong commitment to financial inclusion contributed to this progress,” Nichols added. “In particular, we want to recognize the growing number of banks that now offer low-cost, easy-to-use Bank On-certified accounts. Since ABA encouraged every bank in the country to offer Bank On accounts two years ago, the number has skyrocketed by nearly 700%, with certified accounts now available in more than 40,000 retail banking locations across the United States, from the very smallest community banks to the very largest global banks.”
Mobile banking boom
The use of mobile banking among banked households in the U.S. leaped from 15.1% in 2017 and 34% in 2019 to 43.5% in 2021 and has become the primary method for account access, according to the survey. The FDIC polled respondents on the ways they access their bank accounts and discovered a decline in nearly every category except mobile banking. At the same time, the agency noted that the use of bank tellers remained prevalent among certain segments of the population, including lower-income households, less-educated households, older households and households outside metropolitan areas.
The number of households reporting using a bank teller as the primary method of accessing their bank accounts dropped from 24.8% in 2017 to 14.9% in 2021. Households reporting using ATMs/kiosks as their primary method fell from 19.5% to 16%, while computer-based online banking dropped from 37% to 22%. The number of households primarily using telephone banking was small but held steady at 2.9%.
One new question in the 2021 survey concerned the household use of nonbank online payment services “with an account feature that allows you to receive and store money in the account,” such as Venmo, PayPal and CashApp. Almost half of all households (46.4%) were using online payment services at the time of the survey. At the same time, 6.9% were using prepaid cards. The use of prepaid cards was much higher among unbanked households than among banked households, although the use of online payment services was much lower among the unbanked.