A record 96 percent of U.S. households were banked last year, according to the FDIC’s 2021 National Survey of Unbanked and Underbanked Households.
Approximately 1.2 million more households have been banked since 2019, according to the survey. Nearly 50 percent of newly banked households that received government payments cited that as a factor in opening an account. Fourteen percent of households were reportedly underbanked in 2021.
“During the pandemic, consumers opened bank accounts to access relief funds and other benefits quickly and securely,” said FDIC Acting Chairman Martin 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.”
Fourteen percent of households reported being underbanked. Twenty-one percent of unbanked households said they didn’t have enough money to meet minimum balance requirements. A lack of trust in banks was the second-most cited reason.
Unbanked and underbanked rates reportedly continue to be higher among people of color. Last year, 2 percent of white households were unbanked, compared with 11 percent of Black households and 9 percent of Hispanic households.
“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,” Gruenberg said.
According to the report, mobile banking sharply increased between 2017-21, from 15 percent to 43 percent, and became the most prevalent main way of accessing accounts.
As the use of check cashing and payday or pawn shop loans decreased, more customers utilized nonbank online payment services. “PayPal, Venmo and CashApp have quickly become a common tool for many households — banked and unbanked — to conduct financial transactions,” the FDIC stated. “Nearly half of households used a nonbank online payment service in 2021, including two-thirds of households younger than 35.”