Money The Unbanked and Underbanked Population
The unbanked and underbanked population in the U.S. comprises individuals who either do not have a checking or savings account at a bank or credit union. [1] FDIC, “How America Banks: Household Use of Banking and Financial Services,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/
But why do some people not have a bank account, and which demographics are the most likely to fall into the category of unbanked or underbanked? This analysis looks into statistics on people who don’t have or use a bank account, and how this could affect them.
Key statistics
- The FDIC found that in the U.S., as of 2023, 14.2% of households are underbanked, meaning they have a bank account but regularly use alternative financial services, and 4.2% are unbanked, meaning they have no bank account at all.
- The unbanked population is made up of around 5.6 million households in the U.S.
- American Indian or Alaska Native households are more likely to be part of this population, with 12.2% being unbanked compared to 1.9% of white households.
- The most cited reason for not having a bank account is the lack of sufficient funds to meet the minimum balance requirements set by banks, with 42.3% of unbanked households citing this reason.
- Working-age householdswithdisabilitiesare around 3 times more likely to be unbanked than those without disabilities (11.2% vs 3.7%).
- The lower someone's education level, the more likely they are to be unbanked. Almost a fifth (19.7%) of households with education less than a high school diploma are unbanked, compared to just 0.8% of households with a college degree or higher.
What does it mean to be unbanked?
The term unbanked refers to an adult who does not have access to a bank account. This means they do not have a checking account or savings account, and cannot access services from a bank or credit union. [1] FDIC, “How America Banks: Household Use of Banking and Financial Services,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/
How many people are unbanked in the U.S?
Approximately 4% of adults in the U.S. are unbanked, which makes up around 5.6 million people in the country who don’t have a bank account at all, according to 2023 data from the Federal Deposit Insurance Corporation (FDIC). [1] FDIC, “How America Banks: Household Use of Banking and Financial Services,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/
Why are people unbanked?
Data from an FDIC study in 2023 was compiled to understand why some people are unbanked. People in unbanked households were asked what the main reasons were for them not having a bank account.
The most common reason people said they didn’t have a bank account was that they didn’t have enough money to meet the minimum balance requirements set by the bank. This reason was stated by 42.3% of respondents.
Other reasons for not having a bank account included not trusting banks, bank account fees being too high, and having problems with their personal identification, credit, or former bank accounts.
The chart table below shows the full breakdown of reasons people don’t have a bank account, including for all unbanked households, and those who have previously banked or never banked.
| Reasons for Not Having a Bank Account (2023 FDIC Data): | ||
| Reason | Cited as a Reason | Cited Main Reason |
| Don't Have Enough Money to Meet Minimum Balance Requirements | 42.3% | 23.3% |
| Don't Trust Banks | 36.0% | 15.7% |
| Avoiding a Bank Gives More Privacy | 33.9% | 5.1% |
| Bank Account Fees Are Too High | 30.7% | 8.9% |
| Bank Account Fees Are Too Unpredictable | 29.3% | 1.2% |
| Banks Do Not Offer Needed Products and Services | 20.0% | 1.7% |
| Bank Locations Are Inconvenient | 16.3% | 2.5% |
| Don't Have Personal Identification Required to Open an Account | 13.0% | 5.1% |
| Problems With Past Banking or Credit History | 12.3% | 3.4% |
| Other Reason | 22.0% | 18.1% |
| Did Not Select a Reason | 15.0% | 15.0% |
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
Unbanked and underbanked by demographic
In the U.S., 81.6% of households are fully banked, representing approximately 109.1 million households, meaning they have a bank account and have not used any of the eight nonbank financial services tracked by the FDIC in the past 12 months.
A further 14.2% of households are underbanked, meaning they have a bank account but have used at least one nonbank financial service, such as money orders, check cashing, international remittances, or alternatives to mainstream credit, including payday loans or rent-to-own services.
The remaining 4.2% of adults are unbanked, meaning they do not have a bank account at all.
| Percentage of adults in the U.S. who are fully banked, underbanked and unbanked | |
|---|---|
| Fully Banked | 81.6% |
| Underbanked | 14.2% |
| Unbanked | 4.2% |
Source [1] FDIC, “How America Banks: Household Use of Banking and Financial Services,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/
Race
A household's race or ethnicity significantly affects its likelihood of being unbanked or underbanked. When comparing banking status by race in the U.S., American Indian or Alaska Native households are the most likely to be unbanked at 12.2%, followed by Black households at 10.6% and Hispanic households at 9.5%. In contrast, White households have the lowest unbanked rate at just 1.9%.
For underbanked rates, Black households have the highest rate at 23.8%, followed by Hispanic households at 21.7% and American Indian or Alaska Native households at 21.9%. White households have a significantly lower underbanked rate at 10.1%.
This means that white households are most likely to be fully banked, at 69.4%, while Native Hawaiian or Other Pacific Islander households are the least likelywith only 0.3% fully banked.
| Unbanked Rates by Race/Ethnicity (2019-2023 bi-yearly) | |||
|---|---|---|---|
| Race | 2019 | 2021 | 2023 |
| Black | 13.8% | 11.3% | 10.6% |
| Hispanic | 12.2% | 9.3% | 9.5% |
| Asian | 1.7% | 2.9% | 2.0% |
| American Indian or Alaska Native | 16.3% | 6.9% | 12.2% |
| Native Hawaiian or Other Pacific Islander | N/A | N/A | 4.8% |
| White | 2.5% | 2.1% | 1.9% |
| Two or More Races | 4.9% | 5.0% | 2.5% |
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
Disclaimer: Some percentages have been rounded and therefore don’t add up to 100%.
Education level
The level of education a household has achieved significantly affects its likelihood of being unbanked or underbanked. Households without a high school diploma have the lowest level of bank use, with 19.7% being unbanked and 23.1% being underbanked. This data shows that less educated households are the most likely not to have a bank account or to regularly use alternative financial services.
As the education level increases, the percentage of households that are fully banked increases substantially. Households with a college degree have an unbanked rate of just 0.8% and an underbanked rate of 10.4%, meaning approximately 88.8% are fully banked - the highest rate among all education levels. In contrast, households without a high school diploma have a fully banked rate of approximately 57.2%.
The education gap in banking access is pronounced: households without a high school diploma are nearly 25 times more likely to be unbanked than those with a college degree.
| Education Level | 2019 | 2021 | 2023 |
|---|---|---|---|
| No High School Diploma | 21.4% | 19.2% | 19.7% |
| High School Diploma | 8.1% | 6.8% | 6.5% |
| Some College | 4.3% | 3.3% | 3.0% |
| College Degree | 0.8% | 0.9% | 0.8% |
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
Income
The highest percentages of unbanked and underbanked people are among those with a family income below $15,000, with 9% being unbanked. For people with an income over $75,000, only 0.7% are unbanked and 9.7% are underbanked.
Income volatility also has an effect on someone being unbanked or fully banked. For people whose income varies a lot from month to month, 8.3% are unbanked, more than double the number of people who said they have roughly the same income each month (4%). Those with income that varied somewhat from month to month had an unbanked rate of 4.6%.
| Unbanked Rates by Family Income (2019-2023) | |||
|---|---|---|---|
| Income Level | 2019 | 2021 | 2023 |
| All Households | 5.4% | 4.5% | 4.2% |
| Less Than $15,000 | 23.3% | 19.8% | 21.8% |
| $15,000 to $30,000 | 10.4% | 9.2% | 9.0% |
| $30,000 to $50,000 | 4.6% | 4.0% | 4.5% |
| $50,000 to $75,000 | 1.7% | 2.1% | 1.8% |
| At Least $75,000 | 0.6% | 0.6% | 0.7% |
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
Disability status
FDIC statistics show that people with disabilities are more likely to be unbanked than those without disabilities. For disabled people aged 25-64, 11.2% are unbanked, compared to non-disabled people in the same age group at 3.7%. This means people with disabilities are around 3x more likely to be unbanked than people without disabilities.
| People with disabilities and their banking status | ||
|---|---|---|
| Banking Status | Households with Disability (Ages 25-64) | Households without Disability (Ages 25-64) |
| Unbanked | 11.2% | 3.7% |
| Cash-Only Unbanked | 6.6% | 2.5% |
| Underbanked | 21.2% | 14.8% |
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
Unbanked rates by state
The percentage of unbanked people in the U.S. as of 2023 also varies from state to state. Mississippi is the state with the largest unbanked population, with 9.4% of people being unbanked here, followed by Louisiana at 8.1%.
The states with the lowest level of unbanked households are Virginia and Vermont, where only 0.9% of households are unbanked.
Source [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
What alternative financial services do people use?
When making transactions, unbanked households use various alternative financial services at much higher rates than the general population. In 2023, 26.3% of unbanked households used nonbank money orders, compared to only 7.2% of banked households and 8.0% of all households overall.
For check cashing services, 18.2% of unbanked households used nonbank check cashing in 2023, compared to just 2.0% of banked households and 2.7% of all households overall.
Among unbanked households, 20.1% used nonbank online payment services like PayPal, Venmo, or Cash App, and 21.6% used prepaid cards. However, the majority of unbanked households (66.2%) remain "cash-only," relying entirely on cash for their financial transactions.
Unbanked households use money orders, check-cashing services, prepaid cards, and online payment platforms such as PayPal, Venmo, or Cash App to perform basic financial tasks. These tools act as substitutes for traditional bank accounts, helping users pay bills, receive income, and make purchases.
How does being unbanked affect people?
When it comes to being unbanked, a lot of people may feel as though they have no choice, as they simply don’t have enough money to meet the minimum balance requirements set by banks. However, some of the unbanked population choose not to have a bank account because they mistrust banks, or don’t feel that their privacy is protected when using them.
Let’s look at some of the effects of not having a bank account and how they can impact people in other areas of life.
- Pre-paid cards incur fees - Unbanked or underbanked people often use pre-paid cards to make transactions, but these can come with an activation fee, monthly charges, and fees for using ATMs or making deposits.
- Difficulty saving for emergencies - Data from a recent survey on behalf of Self Financial shows that 65.3% of Americans have an emergency fund as of Q2 2022, but without a bank account, saving for emergencies can be more tricky. Keeping cash stored at home leaves you open to theft, and having savings on a pre-paid card makes it easier to spend than if it was in a dedicated savings account.
- Less convenience - These days, much of our banking can be done online and even through mobile apps, making it a pretty simple and convenient process, with 48.3% of banked households using online banking as the primary method of account access.
Sources
- [1] FDIC, “How America Banks: Household Use of Banking and Financial Services,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/
- [2] FDIC, “2023 FDIC National Survey of Unbanked and Underbanked Households,” Accessed on August 20, 2025 https://www.fdic.gov/household-survey/2023-fdic-national-survey-unbanked-and-underbanked-households-report
- [3] MyBankTracker, “Checking Account Fee Comparison at Top 10 U.S. Banks,” Accessed on August 20, 2025 https://www.mybanktracker.com/news/checking-account-fee-comparison-top-10-us-banks
