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Household Survey

2017 FDIC National Survey of Unbanked and Underbanked Households

The 2017 household survey results show that one in four households (25.2 percent) are either unbanked or underbanked, conducting some or all of their financial transactions outside of the mainstream banking system. Many of these households rely on alternative financial services (AFS) providers, while others use cash or other financial arrangements.

2017 Survey Results

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Key Findings and Implications from the 2017 Survey

Key Findings

  • In 2017, 6.5 percent of U.S. households were unbanked. Approximately 8.4 million U.S. households, made up of 14.1 million adults and 6.4 million children, were unbanked in 2017.
  • 18.7 percent of U.S. households were underbanked in 2017, meaning that the household had an account at an insured institution but also obtained financial products or services outside of the banking system. Approximately 24.2 million U.S. households, composed of 48.9 million adults and 15.4 million children, were underbanked in 2017.
  • The unbanked rate in 2017 declined to the lowest level since the survey began in 2009. Since the survey was last administered in 2015, the unbanked rate has fallen by 0.5 percentage points.
    • The decline from 2015 to 2017 can be explained almost entirely by changes in household characteristics across survey years, particularly improvements in the socioeconomic circumstances of U.S. households.
  • Use of mobile banking to access a bank account continued to increase sharply, while use of bank tellers declined somewhat.
    • The proportion of banked households that used mobile banking to access their accounts increased from 23.2 percent in 2013 to 31.9 percent in 2015 and 40.4 percent in 2017.
    • Use of bank tellers remained quite prevalent: 73.6 percent of banked households used bank tellers to access their accounts in 2017.
    • Use of bank tellers as the primary means of account access also remained prevalent among certain segments of the population, including lower-income households, less-educated households, older households, and households in rural areas.
  • In 2017, 86.0 percent of banked households visited a bank branch in the past 12 months. 30.8 percent of banked households visited a branch one to four times, 18.2 percent visited five to nine times, and 35.4 percent visited ten or more times.
    • Branch visits were prevalent even among banked households that used online or mobile banking as their primary method of account access. For example, 81.0 percent of banked households that used mobile banking as their primary method visited a branch in the past 12 months, and 23.0 percent visited ten or more times.
  • The proportion of households that used prepaid cards decreased from 9.8 percent in 2015 to 9.2 percent in 2017, but it remained higher than in 2013 (7.9 percent). Consistent with previous survey results, use of prepaid cards was most prevalent among unbanked households.
  • AFS use continued to be much higher among unbanked households than banked households.
    • The proportion of unbanked households that used AFS decreased substantially in recent years and is attributable to declines in the use of both transaction and credit AFS over this period.
    • Use of AFS among banked households also decreased in recent years and is attributable almost entirely to the decline in the use of transaction AFS over this period.
  • In 2017, 57.8 percent of households saved for unexpected expenses or emergencies in the past 12 months, which increased from 56.3 percent in 2015. Consistent with previous survey results, unbanked households saved at a much lower rate than underbanked and fully banked households.
  • Credit cards were the most common type of mainstream credit in 2017 (68.7 percent of households had a credit card from Visa, MasterCard, American Express, or Discover, and 41.6 percent had a store credit card), followed by mortgages, home equity loans, or home equity lines of credit (HELOCs); and auto loans.
    • In 2017, 19.7 percent of households had no mainstream credit in the past 12 months and likely did not have a credit score.
    • Lower-income households, less-educated households, black and Hispanic households, working-age disabled households, and foreign-born, noncitizen households were more likely to have had no mainstream credit. These differences persist even after accounting for other socioeconomic and demographic characteristics (such as income, education, and age) and bank account ownership.
  • As in 2015, unbanked households in 2017 primarily went outside of the banking system to pay bills and receive income in a typical month. Underbanked households, on the other hand, used banks extensively to handle their financial transactions, but they also widely used other methods to pay bills.
    • Approximately two-thirds of unbanked households paid bills using cash in 2017, the most prevalent method. The most prevalent way unbanked households received income was paper check or money order, followed by cash and direct deposit onto a prepaid card.
    • About two-thirds of underbanked households paid bills using an electronic payment from a bank account. Approximately one in four underbanked households used cash to pay bills in a typical month, and a similar share used nonbank money orders. Direct deposit into a bank account was by far the most prevalent method of receiving income for underbanked households.

Implications

The survey results show that the unbanked rate declined 0.5 percentage points between June 2015 and June 2017. This decline can be attributed almost entirely to improvements in the economic circumstances of U.S. households. The unbanked rate fell for many groups that had high unbanked rates in 2015. However, unbanked rates for these groups remain substantially higher than the overall unbanked rate in 2017. Below, we discuss a number of opportunities to increase the use of mainstream banking services by unbanked and underbanked households that may help to further reduce unbanked and underbanked rates going forward.

1 In the past 12 months, these households did not have any of the credit products that are likely reported to credit bureaus. These include credit cards; store credit cards; mortgages, home equity loans, and home equity lines of credit (HELOCs); auto loans; student loans; bank personal loans; and other mainstream nonbank credit.

2 In qualitative research, several banks described small-dollar loan products that they offered, some of which included financial education. See “Bank Efforts to Serve Unbanked and Underbanked Consumers Qualitative Research,” May 25, 2016 (available at http://www.fdic.gov/consumers/community/research/qualitativeresearch_may2016.pdf).

3 See “Bank Efforts to Serve Unbanked and Underbanked Consumers Qualitative Research,” May 25, 2016, for examples of a range of products and services that the 11 interviewed banks offered to sustainably meet the needs of unbanked and underbanked consumers. This report also describes a variety of additional strategies used by these banks to reach and serve unbanked and underbanked consumers.

4 See http://www.fdic.gov/consumers/template/template.pdf for the FDIC Model Safe Accounts Template.

5 A linear probability model was estimated to account for changes from 2011 to 2017 in the distribution of households across the household characteristics listed in Appendix Table A.2 (except for monthly income volatility, which is not available for 2011). Changes in these household characteristics between 2011 and 2017 accounted for about 85 percent of the decrease in the unbanked rate for black households over this period.

6 A linear probability model was estimated to account for changes from 2011 to 2017 in the distribution of households across the household characteristics listed in Appendix Table A.2 (except for monthly income volatility, which is not available for 2011). Changes in these household characteristics between 2011 and 2017 accounted for approximately 40 percent of the decrease in the unbanked rate for Hispanic households over this period.

7 See 2013 FDIC National Survey of Unbanked and Underbanked Households, October 2014 (available at https://www.fdic.gov/analysis/household-survey/2013/2013report.pdf).

8 See “Bank Efforts to Serve Unbanked and Underbanked Consumers Qualitative Research,” May 25, 2016, for examples of different efforts and targeted strategies undertaken by 11 interviewed banks to reach and serve unbanked and underbanked consumers.

Last Updated: October 25, 2022