Roughly 4.2% of U.S. households were unbanked in 2023, a slight drop from 4.5% two years prior, according to the FDIC’s 2023 National Survey of Unbanked and Underbanked Households, released today. The biennial survey concluded that 5.6 million households were unbanked last year compared to the 128 million households that had checking or savings accounts.
The percentage of unbanked households has steadily dropped since 2011, when it was 8.2%. The FDIC attributed the decline to socioeconomic changes, such as increases in income and educational attainment. Unbanked rates remain higher among lower-income households; less-educated households; Black, Hispanic, and American Indian or Alaska Native households; working-age households with a disability; households with income that varied a lot from month to month; and single-parent households. However, the FDIC noted that unbanked rates among Black, Hispanic, American Indian and Alaska Native populations fell by about half between 2009 and 2023.
Unbanked households were most likely to cite not having enough money for minimum balance requirements as the reason for not having a bank account. “Don’t trust banks” was the second-most cited reason, followed by privacy concerns, bank fees, banks not offering the products and services they want, inconvenient bank locations and the lack of a personal ID needed to open an account.
In a statement, ABA President and CEO Rob Nichols pointed to the work of the banking industry to expand banking access, such through Bank On-certified accounts. “Those important efforts will continue to ensure that everyone in the country — regardless of their socioeconomic status — can enjoy the safety, security and opportunities that come with a bank account,” he said. “The overwhelming majority of Americans live in close proximity to multiple bank branches, and banks have invested heavily in technology to ensure customers are able to access their account from anywhere using a range of innovative tools. The report shows consumers are taking advantage of those tools.”
Nichols also warned that current regulatory proposals, such as the Federal Reserve’s proposal to further limit debit interchange fees, will make it harder for banks to offer Bank On-certified accounts and fund other important financial inclusion initiatives.
Other findings in the survey:
- More than 48% of banked households used mobile banking as their primary method of bank access, a sharp increase since 2013 when that figure was 5.5%. At the same time, bank tellers and online banking (such as through a website) have declined as primary account access methods. The survey also found that the younger the age group, the more likely they were to use mobile banking, with more than 75% of individuals ages 35 and younger likely to use the technology compared to less than 20% of individuals 65 or older.
- Almost exactly half of all households (49.7%) were using nonbank online payment services at the time of the survey, up from 46.4% in 2021. At the same time, the use of prepaid cards dipped from 6.9% in 2021 to 5.9% in 2023. Unbanked households were likely to use neither, with 66.2% classified as “cash only.”
- Credit cards were the most used credit products, with 76.4% of banked households having at least one traditional card compared to 10% of unbanked households. Roughly a third of banked households had store credit cards, mortgage products and auto loans, with the percentages much lower for unbanked households. Also, for the first time this year, the FDIC polled respondents on their use of buy now, pay later products. About 4% of banked households reported using BNPL compared to 1.6% of unbanked households. BNPL usage was highest among households with incomes between $30,000 and $75,000.
- The survey also included new questions on cryptocurrency use. In 2023, 4.8% of all households had in the past 12 months owned or used crypto. Crypto use was higher among higher-income households, more-educated households, younger households, Asian and White households, working-age households without a disability, and households with higher monthly income volatility.
- The FDIC also found that about 14.2% of all U.S. households were underbanked, which it defined as having a bank or credit union account but also using at least one of eight nonbank financial services in the past 12 months, such as check cashing and money orders. Nearly one in four households without a high school diploma (23.1%) were underbanked, compared with one in ten households with a college degree. The percentage of underbanked was also higher among minority households.
