Unbanked and underbanked figures down in the US

According to a new study, the proportion of American families without bank accounts fell to its lowest level since 2009 last year, in part because more people opened accounts to receive financial aid during the pandemic.

Based on the Federal Deposit Insurance Corporation’s most current assessment of unbanked and underbanked households, approximately 4.5 percent of American households, or 5.9 million, did not have a checking or savings account with a bank or credit union in 2021, a record low.

Almost 45 percent of households that got a stimulus payment, unemployment compensation, or other government assistance following the start of the pandemic in March 2020, claimed the monies helped motivate them to create an account.

“Safe and affordable bank accounts provide a way to bring more Americans into the banking system and will continue to play an important role in advancing economic inclusion for all Americans,” FDIC acting chairman Martin J. Gruenberg said in a statement.

Some households were unable to access banking services in time to receive federal funds intended to help the nation weather the COVID-19 health crisis’s economic effects.

The FDIC started an informational effort to encourage more Americans to open accounts so that the money might be deposited directly into their accounts. Additionally, banks like Capital One and Ally Financial eliminated overdraft fees as well as other charges that had been a major obstacle for some Americans trying to access the banking system.

When no one in the home has an account with a bank or credit union, the household is said to be unbanked. Since 2009, that proportion of households has decreased by almost half. And between 2011, when 8 percent of American homes lacked a bank account, the highest percentage since the survey’s inception, and the record low reached in 2021, the FDIC estimates that around half of the decline was brought on by a change in American households’ financial situations.

Underbanked people are those who have a checking or savings account but additionally use financial services like check cashing. 18.7 million households in the United States, or 14% of all households, were underbanked in 2017.