what does underbanked mean 
underbanked refers to individuals or families who have a bank account but often rely on alternative financial services such as money orders check cashing services and payday loans rather than on traditional loans and credit cards to manage their finances and fund purchases 1 this may be because they lack access to convenient affordable banking services or because they need or prefer to use alternatives to traditional financial services understanding the underbankedthe majority of people use banks to conduct routine financial transactions banks offer public checking accounts for everyday use to make deposits withdrawals and transfers and to pay bills savings accounts and other investment vehicles offer consumers a place to store their money and earn interest banks also offer consumers a variety of credit facilities such as loans and mortgages people who have a bank account but also tap into alternative financial services such as short term payday loans check cashing services and prepaid debit cards are typically referred to as the underbanked some households are considered unbanked because they don t use banks or financial services at all 