what is unbanked 
unbanked is an informal term for adults who do not use banks or banking institutions in any capacity while often an issue in the developing world there are also pockets of unbanked adults in developed countries including the united states understanding the unbankedunbanked people generally pay for things in cash or purchase money orders or prepaid debit cards unbanked people also typically do not have insurance pensions or any other type of professional money related services they may take advantage of alternative financial services such as check cashing and payday lending if such services are available to them underbanked is a related term it refers to families who have checking or savings accounts but often rely on alternative financial services such as money orders check cashing services and payday loans as opposed to traditional loans and credit cards to manage their finances a federal deposit insurance corp fdic study revealed that more than 5 9 million or 4 5 of american households were unbanked in 2021 in the united states which is the fewest recorded since its survey was first conducted in 2009 1 in its 2019 study the fdic estimated that 7 1 million or 5 4 of households were unbanked 2the fdic stated in 2019 that unbanked rates tend to be higher among certain segments of the population namely households with low volatile or no income the fdic stopped asking about income volatility in its 2021 report 3 education can also be influential as people without a high school diploma were deemed more likely to be without a bank account 4black and latinx households are overrepresented among the unbanked according to a boston consulting group analysis of fdic data while they make up 32 of the u s population they represent 64 of unbanked households 5the rate of unbanked households varies greatly from one state to the next the highest rate of unbanked households remains in the south at 4 9 6 unbanked households in the remainder of the country were as follows mississippi had the highest rate of unbanked households at 11 1 utah had the lowest rate at 1 2 7the federal reserve fed also runs a survey on how households use banking services according to its findings 6 of u s households were unbanked in 2022 8