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The number of American households that were unbanked last year dropped to its lowest level since 2009, a dip due in part to people opening accounts to receive financial aid during the pandemic, a new report says.

Roughly 4.5% of U.S. households – or 5.9 1000000 – didn’t accept a checking or savings account with a banking concern or credit matrimony in 2021, a tape low, according to the Federal Deposit Insurance Corporation’s about recent survey of unbanked and underbanked households.

Roughly 45% of households that received a stimulus payment, jobless benefits or other government assistance afterwards the start of the pandemic in March, 2020 said those funds helped hogtie them to open an account, according to the biennial report which has been conducted since 2009.

“Safe and affordable banking concern accounts provide a fashion to bring more Americans into the cyberbanking system and will go along to play an important function in advancing economical inclusion for all Americans,” FDIC acting chairman Martin J. Gruenberg said in a statement.

A lack of banking options delayed some households from getting federal payments aimed at helping the land atmospheric condition the economical fallout from the COVID-nineteen wellness crisis.

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The FDIC initiated an educational campaign to get more Americans to open an account to enable the direct eolith of those funds. And banks such as Majuscule One and Marry Financial ended  overdraft and other fees that have been a cardinal barrier to some Americans accessing the cyberbanking system.

What does it hateful to be unbanked?

A household is accounted unbanked when no ane in the home has an account with a banking company or credit marriage. That share of households has dropped by nearly half since 2009. And since 2011, when 8% of U.S. households were unbanked, the highest since the start of the survey, and the tape low reached in 2021, roughly half of the drop was due to a shift in the fiscal circumstances of American households the FDIC says.

Who are the underbanked?

A bank manager helps a woman open up a new account.

Those who have a checking or savings business relationship, merely also apply financial alternatives like check cashing services are considered underbanked. The underbanked represented fourteen% of U.Due south. households, or 18.7 meg, last year.

Why are people unbanked or underbanked?

Many of those who are unbanked say they tin’t beget to take an business relationship because of the fees for insufficient funds and overdrafts that are tacked on when account balances fall short. Roughly 29% said fees or non having the required minimum rest were the principal reasons they didn’t take a checking or savings business relationship, every bit compared to 38% who cited those obstacles in 2019.

Are some groups more than probable to exist unbanked?

The numbers of the unbanked were greater among households that included those who were working historic period and disabled, lower income, included a unmarried mother, or were Black or Hispanic. Among white households for instance, 2% didn’t take a bank account last twelvemonth equally compared to xi% and ix% of their Black and Hispanic counterparts.

Meanwhile, well-nigh fifteen% of households with a working age fellow member who had a disability were unbanked compared to almost iv% of other households. And  nearly 16% of households with a single mother were unbanked as compared to about ii% of married couples who lacked an account.

 “These gaps attest there’s still a lot of opportunity to expand participation across the population in the banking system,” Keith Ernst, Associate Director of Consumer Research and Examination Analytics at the FDIC, said during a media telephone call about the study.

Will the number of unbanked rise if the U.S. has a recession?


“During the concluding recession unbanked rates did indeed go upwardly,” Karyen Chu, chief of the Banking Research Section at the Center for Financial Research, said during the call.

Additionally, last year, homes where the head of household was out of work were nearly five times more likely to not have a depository financial institution account as compared to those where the household head was employed.

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“To the extent that income goes down … that has generally been associated with increases in unbanked rates,’’ Chu said.

Follow Charisse Jones on Twitter @charissejones


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