The percentage of unbanked households in the U.S. fell to its lowest level in 2023—4.2%–, the FDIC recently reported.
The agency’s annual National Survey of Unbanked and Underbanked Households collected responses from almost 30,000 households in June 2023. In addition to issuing a full report on the Survey, the FDIC also issued an executive summary of the report [include link].
The FDIC reported that while the percentage of unbanked has fallen by about half for minority groups, since 2011, they still remain significantly higher for lower-income, less-educated, Black, Hispanic, disabled, and single-parent households.
While unbanked rates among minority households fell by about half since 2011, they remain significantly higher than White households. Only 1.9 % of White households were unbanked, compared with Black (10.6%); Hispanic (9.5 %); American Indian or Alaska Native (12.2%) households.
The FDIC also reported that:
- 66.2% of unbanked households rely entirely on cash, while 33.8% rely on prepaid cards or nonbank online payment services such as PayPal, Venmo or Cash App to conduct transactions.
- 14.2% of households, representing 19 million households, are underbanked, which the FDIC defines as a household with a bank or credit union account that primarily uses nonbank services to meet their core financial needs.
- 48.3% of households use mobile phones as their primary method to access their accounts, which the FDIC refers to as “mobile banking”. Over the past decade, the use of mobile banking as a means of account access increased almost nine fold, while use of bank tellers fell more than half and use of online banking, which the FDIC defines as banking via a computer or tablet, decreased more than a third.
- 76.4% of households have a credit card, which the FDIC noted is the most common mainstream credit product. However, 15.7% have no access to mainstream credit. “These households likely did not have a credit score with the nationwide credit reporting agencies, which could make it more difficult to obtain mainstream credit should a credit need arise,” the FDIC noted.
- 3.9% of households use Buy Now, Pay Later short-term loans. This marked the first time the FDIC included that category in the survey.
- 4.8% of U.S. households own or use crypto or digital assets in the previous 12 months. The FDIC found that 92.6% of those households held those assets as an investment, with only 4.4% using it as a form of payment.
The FDIC drew the following conclusions from the survey. First, economic inclusion strategies that worked in the past may not work today. Second, banks should pursue technological developments to engage unbanked consumers even though significant potential problems may exist for those attempting to do so. Third, efforts to increase access to safe and affordable mainstream credit remain important and should continue. And fourth, banks should look for ways to provide more information to consumers about how the use of credit and the types of credit used impact credit histories and credit scores.