The Number of Americans With Bank Accounts Rises

A collage of different people smiling at the camera.

Financial exclusion is a global issue, with 1.7 billion adults considered unbanked, or not having a bank account. Nearly half of all unbanked adults live in just seven world economies.

For many, getting a bank account can seem impossible. There are two terms commonly used to describe that challenge:

  • Unbanked, where no one in a household has a checking or savings account.
  • Underbanked, where a household has a bank account but goes outside of the bank for financial services such as money orders, check cashing, payday loans and more.

The Federal Deposit Insurance Corporation's (FDIC) biennial National Survey of Unbanked and Underbanked Households study, released in October 2018, reported that the share of U.S. households without a bank account continues to drop, as unbanked household rates declined to 6.5% in 2017 from 7% in 2015 and down 21% from a high of 8.2% in 2011.

Unbanked households dropped 21% in the U.S. from 2015 to 2017

The 8.4 million households that were unbanked in 2017 equate to 14.1 million adults who don't have a checking or savings account. The FDIC reports that the decline in the unbanked rate is largely due to improvements in U.S. household socio-economic conditions.

Nearly 50 Million Adults Considered Underbanked

The number of underbanked households dropped to 18.7% in 2017 compared with 19.9% in 2015. That translates to 24.2 million households that were considered underbanked, or approximately 48.9 million adults.

More U.S. consumers entering the banking system is a good thing, says FDIC Chairman Jelena McWilliams. "Our nation's banking system is serving more American households than ever before," McWilliams said in an FDIC press release. "The bad news is that even as the overall number of people who are unbanked has declined, 8.4 million households continue to lack a banking relationship."

Reasons Households Are Unbanked

Many households don't have a bank account because they don't have enough money to keep in an account, account fees are too high or too unpredictable, or they don't trust banks, according to the FDIC study. The top two cited reasons for not having a bank account:

  • 53% of unbanked households cited "Do not have enough money to keep in an account"
  • 30% of unbanked households cited "Don't trust banks"

As a result, many unbanked consumers pay their bills with cash or money orders.

Lack of Mainstream Credit

It's no surprise that unbanked and underbanked consumers also have limited access to credit. In 2017, nearly 20% of households had not used mainstream credit in the past 12 months, according to the FDIC. Consumers with no bank account or limited bank account usage who also don't use credit are less likely to have a credit score—hurting their ability to get mainstream credit including credit cards and bank loans. As a result, these consumers may rely on more expensive credit options, such as payday loans and title loans, when they're caught in a financial emergency.

The study found marked differences in the share of households with no mainstream credit by banking status:

  • 80.2% of unbanked households had no mainstream credit, compared with 21.9% of underbanked households and 14.1% of fully banked households.

Improving Credit Access

Improved access to mainstream financial services can help unbanked and underbanked Americans get on a path to greater economic stability. For example, just learning how to open a checking account can help consumers begin to manage and save their money more efficiently. And different from the past, paying utility and telecom bills from a bank account can even help consumers get a credit score today. With Experian Boost®ø, paying these bills on time can help people who have a bank account get credit for the utility bills they pay on time. Once they have a credit score, they can begin exploring financial products, such as secured credit cards, that can help them build credit and have more financial stability.

Promoting financial inclusion for American consumers is not a new idea, but one when paired with giving people control of their financial future, can be life-changing.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.