A new survey from the Federal Deposit Insurance Corporation (FDIC) has revealed that only 5.4% Americans in 2019 were unbanked, or who did not have access to a checking or savings account, in what is said to be a record low.
However, FDIC warned that the Covid-19 pandemic may push many poorer people out of the US traditional banking system.
According to the decade-old survey, around 95% of Americans had at least one bank or credit union account last year.
In its report, the FDIC said that “the Covid-19 pandemic is likely to contribute to a rise in the rate of unbanked households.”
On the contrary, FDIC chairman Jelena McWilliams said: “It is encouraging that a record number of households had bank accounts in 2019, though we continue to pursue actions to create a more inclusive banking system.
“New products and technologies have the potential to bring even more people into the banking system and the FDIC will encourage this important innovation.”
Scope of the survey
The FDIC surveyed nearly 33,000 households in June last year, in collaboration with the US Census Bureau.
The watchdog found that over 1.5 million households opened bank accounts between 2017 and 2019.
Nearly 124 million (95%) of the US households had at least one bank or credit union account last year, while 7.1 million (5.4%) households did not have any account.
The use of mobile banking as the primary means of accessing accounts increased over two-folds since 2017. Other channels including tellers, ATMs, and online banking also increased.
About 50% of the unbanked households did not have a bank account as they could not meet the minimum balance requirement criteria.
Moreover, nearly one-third of the respondents cited their lack of trust in banks as the main reason for not having a bank account.
These unbanked households comprise nearly 14% of African-American households, 12% of Hispanic households and less than 3% of white households.
Among the unbanked households, 28% used prepaid cards in 2019, including nearly one-third black households and 16.7% Hispanic households.
The respondents were also questioned about their use of credit provided by both banks and non-banks.
In 2019, 75% of them used bank credit, while less than 20% used non-bank credit.