The Federal Deposit Insurance Corporation (FDIC) recently released their 2021 National Survey of Unbanked and Underbanked Households. Since they began tracking household banking data in 2009, the FDIC has reported on how many U.S. households are either unbanked or underbanked.
The news for 2021 is positive: the number of American households that do not have a bank account fell to a record low of 4.5%. This may be due to the increase of online-only banks and an improving U.S. economy. The new numbers represent approximately 5.9 million households, which is down a considerable amount from the previous 2019 report, which showed that 5.4% of American households were unbanked.
Decline in Unbanked
According to the FDIC’s report, “Between 2011—when the unbanked rate was at its highest level since the survey began—and 2021, the unbanked rate fell 3.7 percentage points, corresponding to an increase of approximately 5.0 million banked households.”
Cautious about Banks
Some of the reasons given as to why many U.S. households still are unbanked, reasons frequently given were that they “Don’t have enough money to meet minimum balance requirements.” Others who took the survey also felt that they didn’t trust banks and that avoiding the use of a bank increases privacy.
But while these reasons are still felt by many Americans, more and more Americans are participating in the banking system, which is good news.
COVID-19 May Have Helped
One reason that the numbers of unbanked may have declined in recent years is as a result of the COVID-19 pandemic. With relief money issued by the government, many people rushed to open bank accounts to be able to access relief funds easily and securely.
Given that Americans who do not have access to or participate in the banking system face challenges in how they go about their daily financial transactions, the fact that more Americans are now holders of a bank account is welcome news.