WASHINGTON — Despite unprecedented economic challenges posed by the COVID-19 pandemic, nearly 96 percent of U.S. households were banked in 2021, according to the latest national survey released today by the Federal Deposit Insurance Corporation (FDIC). The FDIC’s 2021 National Survey of Unbanked and Underbanked Households also found an estimated 4.5 percent of U.S. households (representing 5.9 million households), lacked a bank or credit union account, the lowest national unbanked rate since the FDIC survey began in 2009.
According to FDIC’s latest biennial survey, approximately 1.2 million more households were banked since 2019. Nearly half of newly banked households that received government payments said these payments contributed to their decision to open an insured bank or credit union account. Meanwhile, 14.1 percent of households (representing 18.7 million households), were underbanked in 2021, meaning they had a bank or credit union account and used nonbank financial products and services.
“During the pandemic, consumers opened bank accounts to access relief funds and other benefits quickly and securely,” said FDIC Acting Chairman Martin J. Gruenberg. “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. Today’s results highlight the importance of ensuring consumers who are receiving benefits or starting a new job, two key bankable moments, can easily find and open a bank account that meets their needs.”
Since 2009, the FDIC has asked households about their use of banking and financial products and services through the most comprehensive survey of its kind. In 2011, 8.2 percent of households were unbanked, the improvement from that point represents 5 million additional households with banking relationships over the most recent decade.
Key findings in the 2021 survey include:
- National Unbanked Rate Drops to Record Low. An estimated 4.5 percent of U.S. households were “unbanked” in 2021, meaning that no one in the household had a checking or savings account at a bank or credit union. This represents approximately 5.9 million U.S. households, compared to 7.1 million in 2019.
- National Underbanked Rate and Use of Nonbank Financial Products and Services Declines. An additional 14.1 percent of households, or 18.7 million, were underbanked in 2021, meaning they had a bank account but used nonbank financial products and services during the year. Banked households’ use of key nonbank financial products and services that classify a household as underbanked declined by about one third between 2017 and 2021.
- Unbanked and Underbanked Rates Remain Higher Among Minorities. In 2021, 2.1 percent of White households were unbanked, compared with 11.3 percent of Black households and 9.3 percent of Hispanic households. While this gap is sizable, it is notably smaller than just two years prior when the unbanked rate in 2019 among White households was 2.5 percent compared to 13.8 percent and 12.2 percent among Black and Hispanic households, respectively. In 2021, 9.3 percent of White households were underbanked, compared with 24.7 percent of Black households and 24.1 percent of Hispanic households.
- Importance of Bankable Moments. Among recently banked households that received a government benefit during the pandemic, almost half (45 percent) or 1.9 million households said that the payment contributed to their opening a bank account. For recently banked households that started a new job, about a third (33.1 percent) said it contributed to their decision to open a bank account.
- Mobile Banking use Continues to Increase: The use of mobile banking increased sharply among banked households between 2017 (15.1 percent) and 2021 (43.5 percent), and was the most prevalent primary method of account access. Use of a bank teller declined but remained prevalent for certain segments of the population.
- Reasons for Not Having a Bank Account. About 21.7 percent of unbanked households cite “Don’t have enough money to meet minimum balance” as the main reason for not having an account. “Don’t trust banks” was the second-most cited main reason for not having an account. The proportion of unbanked households citing fees or minimum balance-related reasons for not having a bank account fell from 38 percent in 2019 to 29.2 percent in 2021.
- Use of Check Cashing and Nonbank Loans (e.g. Payday or Pawn Shop Loans) Decreases. Use of some nonbank financial transaction services, such as check cashing, and nonbank credit products, including payday or pawn shop loans, continued to decline. Unbanked households’ use of nonbank check cashing fell from 30.2 percent in 2017 to 21.8 percent in 2021. Similarly, use of nonbank credit also declined. In 2017, 7.4 percent of households had used at least one nonbank credit product tracked by the survey. In 2021, that share fell by 40 percent to 4.4 percent of households using those same products.
- Use of Nonbank Online Payment Services Increases Overall. Nonbank online payment services such as PayPal, Venmo, and CashApp have quickly become a common tool for many households—banked and unbanked—to conduct financial transactions. Nearly half of all households (46.4 percent) used a nonbank online payment service in 2021, including two-thirds of households younger than 35.
“Banked households appear to be using nonbank online payment services in conjunction with banking products by linking them to credit cards or bank accounts, while unbanked households are frequently using these services in place of a bank account,” said Gruenberg. “The FDIC will continue its educational and outreach efforts to help consumers understand the benefits of a bank account, the consumer protections they afford, and the applicability of deposit insurance.”
The FDIC launched the #GetBanked initiative at the onset of the pandemic as a way to inform consumers about how to open a bank account online and to facilitate the safe and timely distribution of Economic Impact Payments through direct deposit. As part of ongoing efforts to expand financial inclusion, the FDIC began a public awareness campaign in April 2021 with targeted advertising in select cities to promote the benefits of opening a bank account, including access to safer, lower-cost financial products.
In turn, the FDIC is calling on community groups and government agencies to join the movement and help bring more people into the banking system. To learn more, you can go to www.FDIC.gov/GetBanked and follow the campaign at #GetBanked.
In partnership with the U.S. Census Bureau, the FDIC conducted the survey in June 2021, 15 months after the COVID-19 pandemic began, collecting responses from more than 30,000 households.
For more information on the survey findings, including custom tables and localized data, visit FDIC.gov/EconomicInclusion.