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pdf2013 FDIC
National Survey
of Unbanked and
Underbanked
Households
Federal Deposit
Insurance Corporation
October 2014
Members of the FDIC Unbanked/Underbanked Survey Study Group
Authors:
Susan Burhouse, Karyen Chu, Ryan Goodstein, Joyce Northwood, Yazmin Osaki, Dhruv Sharma
Contributors:
Keith Ernst, Alicia Lloro, Sherrie Rhine
2013 FDIC National Survey
of
Unbanked
and
Underbanked Households • October 2014
2
Table of Contents
1. Executive Summary and Implications............................................................................................................................................................4
2. Background and Objectives........................................................................................................................................................................... 13
3. Banking Status of U.S. Households.............................................................................................................................................................. 15
4. Checking and Savings Account Ownership, and Automatic Transfers.......................................................................................... 28
5. Prepaid Debit Cards........................................................................................................................................................................................... 29
6. Alternative Financial Services........................................................................................................................................................................ 41
7. Access to Mobile Phones and the Internet .............................................................................................................................................. 50
8. Banking Methods............................................................................................................................................................................................... 53
9. Implications and Conclusion.......................................................................................................................................................................... 62
Appendix A — K..................................................................................................................................................................Published Separately
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
3
1. Executive Summary and Implications
When households open an account at a federally
insured depository institution, they establish a mainstream banking relationship. This relationship
provides opportunities for households to deposit
funds securely, conduct basic financial transactions,
accumulate savings, and access credit on fair and
affordable terms.
sented nearly 9.6 million households composed
of approximately 16.7 million adults and 8.7
million children.1
• 20.0 percent (24.8 million) of U.S. households
were underbanked in 2013, meaning that they
had a bank account but also used alternative
financial services (AFS) outside of the banking
system.2 Approximately 50.9 million adults and
16.6 million children lived in underbanked
households.
Despite these benefits, many households—referred to
in this report as “unbanked”—do not have an
account at an insured institution. Additional households have an account, but have also obtained financial services and products from non-bank, alternative
financial services (AFS) providers in the prior 12
months. These households are referred to here as
“underbanked.” The existence of unbanked and
underbanked households presents an opportunity for
banks to expand access to their products and services
and forge relationships with these underserved
groups, ultimately increasing economic inclusion.
Figure ES.1 Banking Status Of U.S. Households, 2013
Underbanked
20.0
Unbanked
7.7
Banked,
Underbanked
Status
Unknown
5.3
The FDIC recognizes that public confidence in the
banking system is strengthened when banks effectively serve the broadest possible set of consumers. As
a result, the agency is committed to increasing the
participation of unbanked and underbanked households in the financial mainstream. The FDIC
National Survey of Unbanked and Underbanked
Households represents one contribution to this end.
Conducted to assess the inclusiveness of the banking
system, and in partial response to a statutory
mandate, the biennial survey provides estimates of
unbanked and underbanked populations. It also seeks
to provide insights that will inform efforts to better
meet the needs of these consumers. The FDIC partnered with the U.S. Census Bureau to administer this
survey in June 2013, collecting responses from 40,998
households.
Key Findings
Banking Status of U.S. Households
One in thirteen households was unbanked in 2013.
This proportion decreased from 2011, reflecting
changed economic conditions and household demographics. An additional one in five households was
underbanked in 2013.
• 7.7 percent of households in the United States
were unbanked in 2013. This proportion repre-
Fully
Banked
67.0
• The unbanked rate has varied from 7.6 percent in
2009 to 8.2 percent in 2011 and 7.7 percent in
2013.3
• The 0.5 percentage point decrease in the
unbanked rate between 2011 and 2013 can be
explained by differences in the economic
Adults are defined as people aged 16 and older. This is a lower-bound
estimate of the number of unbanked adults in the United States because it
is based on the assumption that all adults residing in a “banked” household are banked in the sense that they may benefit from the account. A
banked household may have one or more unbanked adults; these
unbanked adults residing in banked households are not included in the
16.7 million adults figure cited in this report.
2
In the 2013 survey, underbanked households are those that have used
at least one of the following AFS from non-bank providers in the last 12
months: money orders, check cashing, remittances, payday loans, refund
anticipation loans, rent-to-own services, pawn shops loans, or auto title
loans. Underbanked rates from the three surveys are not directly comparable because of changes in the definition of underbanked households in
both 2011 and 2013.
3
All reported differences resulting from direct comparisons described in
the text are statistically significant at the 10 percent level unless otherwise noted. In this case, the 2009 and 2013 estimates are each significantly different from 2011 but not from each other.
1
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
4
conditions and demographic composition of
households over this period.
• In particular, compared to 2011, households
in 2013 had slightly higher levels of employment and income, and were slightly older
and better educated.4 These characteristics
are all associated with a higher likelihood of
having a bank account.
Checking and Savings Account Ownership, and
Automatic Transfers
Checking and savings account ownership rates
remained similar to previous years. For the first time,
the survey asked about automatic transfers, finding
that most households use them primarily in connection with checking accounts.
• The vast majority of all U.S. households (88.4
percent) owned a checking account in 2013,
while less than seven in ten (68.8 percent) owned
a savings account.
• The highest unbanked rates continued to be
found among non-Asian minorities, lower-income households, younger households, and
unemployed households. Relative to 2011, the
unbanked rates in 2013 were generally similar for
these groups. One exception is Hispanic
households.
• Four in five (80.3 percent) banked households had
money directly deposited into a bank account or
automatically transferred funds between
accounts:
• While still relatively high, the unbanked rate
for Hispanic households decreased to 17.9
percent in 2013 from 20.1 percent in 2011.
• 94.5 percent of these households directly
deposited or automatically transferred funds
into checking accounts and 17.3 percent into
savings accounts.6
• Improvements in economic conditions and
changing demographics among Hispanic
households over this period explain nearly
half of the reduction in the unbanked rate
among this population.
• In particular, relative to 2011, Hispanic
households in 2013 experienced higher levels
of employment, income, and education.
These characteristics are all associated with a
higher likelihood of having a bank account.
• Among working-age disabled households, 18.4
percent were unbanked and 28.1 percent were
underbanked in 2013.5 This is the first time that
the survey has reported estimates for these
households.
Household characteristics, such as race, age, education, and employment, are taken to be those of the owner or renter of the home (i.e.,
“householder”), unless the characteristic is one defined at the household
level, such as income or household type. For convenience, some abbreviated language will be used to refer to these household characteristics.
For example, the term “black household” refers to a household for which
the householder has been identified as black. Note that other members of
a household could have different characteristics from those of the householder. For instance, an unemployed household is defined as a household
whose householder is unemployed, but other household members could
be employed and earning income. The income measures included in this
report reflect the income earned by all household members and not only
the householder.
5
Working-age is considered to be between age 25 and 64. Consistent
with our approach for other household characteristics such as employment status, we classify a household as one with disabilities based on the
characteristics of the owner or renter of the home (i.e., “householder”).
Please refer to Appendix I for a detailed discussion of how we classified
households as disabled.
4
• Among the subset of households with savings
accounts, 22.0 percent direct deposited or
automatically transferred funds into a savings
account.
Household Banking Status Transitions
For the first time, the survey asked households about
both recent entrances and exits from the banking
system as well as the circumstances affecting those
transitions. Overall, economic events and motivations, such as job loss or opening an account to
receive direct deposits, are found to have a stronger
effect on banking status transitions than changes in
household structure, such as marriage.
• Consistent with previous survey results, slightly
less than half (45.9 percent) of unbanked households in 2013 were previously banked, which
represented 3.6 percent of all U.S. households.
• In 2013, 0.7 percent of all U.S. households (or
almost one in ten unbanked households) became
unbanked within the last 12 months, while 1.6
percent became banked in the last 12 months.
13.2 percent of these direct deposits or transfers were to both checking
and savings accounts. As a result, the total does not sum to 100 percent.
6
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
5
Figure ES.2 Previous Banking Status Of Unbanked
Households
Had bank account more than 1 yr ago
36.5
Had bank account
within last year
8.9
Unknown 1.5
Prev banked, recency
unknown 0.5
Never had bank account
52.6
• While relatively small proportions of U.S. households experienced major life events in the past
year, households that transitioned in or out of the
banking system were more likely to have experienced certain events:
• Among households that recently became
unbanked, 34.1 percent experienced either a
significant income loss or a job loss that they
said contributed to the household becoming
unbanked.
• Among households that recently became
banked, 19.4 percent reported that a new job
contributed to their opening a bank account.
• About one-third (34.2 percent) of recently banked
households also reported that receiving direct
deposits was the main reason they opened an
account. This was the most frequently reported
reason, followed by “paying for everyday
purchases, writing checks and/or paying bills,”
reported by one-quarter (25.0 percent) of recently
banked households.
Reasons Households Were Unbanked
Unbanked households cited both economic and attitudinal reasons for remaining outside the banking
system.
reason they did not have an account and slightly
more than a third (35.6 percent) of all unbanked
households reported this to be the main reason.
• Roughly one in three (34.2 percent) unbanked
households reported their dislike of or distrust in
banks as one reason they were unbanked and
slightly more than one in seven (14.9 percent)
unbanked households reported this to be the
main reason.
• Almost one in three unbanked households (30.8
percent) reported high or unpredictable account
fees as one reason they did not have accounts and
about 13 percent (13.4 percent) of unbanked
households reported this to be the main reason.
• Previously banked households (almost one in
five or 17.7 percent) were more likely to say
high or unpredictable fees were the main
reason they were unbanked compared with
households that never had an account (one in
ten or 9.8 percent).
Future Banking Plans of Unbanked Households
Higher proportions of households that previously
had an account reported being likely to open one in
the next 12 months compared with households that
had never been banked. How long ago a household
last had a bank account also appeared to be correlated
with intentions to rejoin the banking system. These
results suggest that many consumers who have had
experience, especially recent experience, with a bank
account find value in having one.
• Almost half (48.6 percent) of unbanked households that previously had an account expressed
an intention to open another in the next 12
months compared with only about one-quarter
(25.2 percent) of households that had never been
banked.
• Almost three out of four (74.8 percent) unbanked
households that recently had a bank account, and
42.7 percent of unbanked households that had an
account more than a year ago, reported being
somewhat or very likely to open another in the
next 12 months.
• A majority (57.5 percent) of unbanked households
reported not having enough money to keep in an
account or meet a minimum balance as one
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
6
Figure ES.3 Reasons Households Were Unbanked
57.5
Do not have enough money
35.6
34.2
Don’t like dealing with or don’t trust banks
14.9
30.8
Account fees are too high or unpredictable
13.4
16.8
ID, credit, or banking history problems
6.8
26.4
Privacy
3.7
6.8
Inconvenient hours or locations
2.6
10.5
Banks do not offer needed products or services
1.2
12.5
Other
Cited as a reason
Main reason
7.4
0
10
Prepaid Debit Card Use
Prepaid debit cards have emerged in recent years as a
new payment method that some consumers use to
address their financial transaction needs. Similar to a
checking account, these cards can be used to pay bills,
withdraw cash at ATMs, make purchases, deposit
checks, and receive direct deposits. Many, although
not all, such cards store funds in accounts eligible for
deposit insurance. The survey results suggest that
sizeable proportions of unbanked households and, to
a lesser degree, underbanked households, relied on
prepaid cards for many of the same purposes that
households associate with checking accounts. Moreover, while some fully banked households used
prepaid cards, unbanked and underbanked households accounted for a majority of prepaid card users.
• Nearly eight percent (7.9) of all households used
prepaid cards in the last 12 months.
• Unbanked households had the highest rate of
use: 22.3 percent of unbanked households
used a prepaid card in the last 12 months,
compared with 13.1 percent of underbanked
20
30
40
50
60
70
households and 5.3 percent of fully banked
households.
• Within the group of unbanked households,
recently unbanked households had the highest rate of prepaid card use: 28.8 percent of
this subset used a prepaid card in the last 12
months, compared with 22.0 percent of
longer-term unbanked households.
• The highest rate of growth in prepaid card use
was among unbanked households: In 2013, more
than a quarter (27.1 percent) of unbanked households reported having ever used a prepaid card,
up from 17.8 percent in 2011 and 12.2 percent in
2009.
• Unbanked prepaid card users appeared to more
actively use their prepaid cards compared with
other prepaid card users:
• They were more likely to have reloaded their
prepaid cards in the past 12 months (57.8
percent), relative to underbanked (42.9
percent) and fully banked (23.4 percent)
households.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
7
Figure ES.4 Banking Status Of Households That Used Prepaid
Cards In The Last 12 Months
Figure ES.5 Banking Status Of Households That Used Prepaid
Cards In The Last 30 Days
Unbanked
33.2
Underbanked
33.2
Unbanked
21.8
Banked,
Underbanked
Status
Unknown
0.5
Fully
Banked
33.0
Fully
Banked
44.6
• Unbanked households were also about two
and a half times more likely to have used a
prepaid card in the last 30 days (16.8 percent)
compared with underbanked households (6.6
percent) and almost nine times more likely
than fully banked households (1.9 percent).
• A much higher proportion of unbanked households that used prepaid cards in the last 12
months reported doing so primarily to meet their
financial transaction needs. Specifically, 79.4
percent of these households cited “to pay for
every day purchases or bills” or “to receive
payments” as the main reason for using a prepaid
card, compared with 53.3 percent of underbanked and 37.6 percent of fully banked households that used prepaid cards in the same period.
• A majority of prepaid card users were unbanked
and underbanked households. More than half
(55.0 percent) of the households that used
prepaid cards in the last 12 months and about
two-thirds (66.6 percent) of the households that
used prepaid cards in the last 30 days were
unbanked or underbanked.
• Almost half (46.5 percent) of unbanked households that used prepaid cards in the last 12
months reported being “very likely” or “somewhat likely” to open a bank account in the next
12 months, compared with 32.6 percent of
unbanked households that had not used prepaid
cards.
• Relatively few households (one in ten or 10.7
percent) that used prepaid cards obtained their
Banked,
Underbanked
Status
Unknown
0.4
Underbanked
33.4
card from a bank branch. Among households
that used prepaid cards, fully banked households
were the most likely (15.4 percent) to have
obtained their cards from a bank branch, while
unbanked households were least likely (4.2
percent) to have done so.
Alternative Financial Services Use
One in four households reported obtaining either
financial transaction services or credit from non-bank
providers in the prior 12 months.7 Households overall reported that “grocery, liquor, convenience, or
drug stores” were the most common locations for
obtaining transaction alternative financial services
(AFS), but unbanked households were more likely to
obtain these services from standalone AFS providers.
• Consistent with previous survey findings, about
one in four households (24.9 percent) used at
least one AFS in the previous 12 months, and
12.0 percent of all households used an AFS in the
last 30 days.
• Transaction AFS products, used by 21.9
percent of all households in the last 12
months, continue to be more widely used
than credit AFS products, which were used
by 7.0 percent of all households.
The 2013 survey asks about non-bank use of three transaction products
(money orders, check cashing, remittances) and five credit products
(payday loans, pawn shop, refund anticipation loans, rent-to-own
services, and auto title loans). Auto title loans were first asked about in
the 2013 survey, so the AFS use estimates in this report are not directly
comparable to estimates in past reports.
7
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
8
Figure ES.6 Methods Used To Access Bank Accounts In The Last 12 Months
78.8
Bank Teller
32.2
69.6
ATM/Kiosk
24.4
55.1
Online Banking
32.9
26.1
Telephone Banking
3.3
23.2
Mobile Banking
5.7
1.0
Other
Method Used
Main Method Used
0.8
0
20
40
• AFS use continues to be relatively high among
unbanked households: 63.2 percent used an AFS
in the last 12 months, and 47.0 percent used an
AFS in the last 30 days.
• The most common locations from which households obtained transaction AFS were “grocery,
liquor, convenience, or drug stores.”
• For example, among households that used
non-bank check cashing, 37.8 percent did so
at a “grocery, liquor, convenience, or drug
store” while 31.4 percent used a large retail or
department store and 24.3 percent cashed
their checks at standalone AFS providers.
• Among transaction AFS users, unbanked households were more likely than underbanked households to use stand-alone AFS providers. For
example, 29.3 percent of unbanked households
that used non-bank check cashing went to standalone AFS providers, compared to 20.6 percent of
underbanked non-bank check cashing users.
60
80
100
Methods of Banking
For the first time, the 2013 survey examines the various ways households access their bank accounts.8 The
results show that bank tellers and online banking
were the primary methods relied on by the largest
share of banked households – about one-third of
banked households primarily used bank tellers and
another third primarily used online banking. Underbanked households were less likely to use online
banking as their primary means of access, but were
more likely to use mobile devices as a primary
method. For those that did primarily use electronic
means (online or mobile device) to access their
account, most used at least two additional methods
and many also reported using a teller. These results
suggest that electronic means of access continue to be
a supplement rather than a wholesale substitute for
tellers.
The survey asks whether the household used any of the following
methods to access their account in the past 12 months: bank tellers,
ATMs/kiosks, online banking, mobile banking, or telephone banking.
8
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
9
• Most banked households (71.1 percent) used
multiple methods to access their bank accounts.9
• Many households used bank tellers to access their
bank account. Nearly four out of five households
(78.8 percent) used a bank teller in the past 12
months, one in three (32.2 percent) used bank
tellers as their primary method of account access,
and 17.5 percent used bank tellers as their only
method of account access.
• Roughly half (54.7 percent) of households age
65 or older, 55.7 percent of households without a high school degree, and 47.5 percent of
households with annual income under
$15,000 primarily used bank tellers to access
their account.
• Use of online banking was also quite common.
Over half (55.1 percent) of banked households
accessed their account online in the past 12
months, and one in three (32.9 percent) used
online banking as their primary means of account
access. Underbanked households were less likely
to have used online banking as their main banking method (26.6 percent) compared with fully
banked households (35.1 percent).
• Among households that primarily used either
online or mobile banking, use of additional
methods was common. For example, households
that primarily used online banking used a median
of two additional methods to access their account
while those that primarily relied on mobile banking used a median of three additional methods.
One commonly used additional method was bank
tellers, which were used by more than 70 percent
of both groups.
Use of Mobile Technology and Mobile Banking
A majority of households reported having access to
smartphones, and almost one in four reported using
those devices to engage in mobile banking in the
prior 12 months.10 While a significant share of
unbanked households had access to smartphones,
their access lagged the population as a whole. In
contrast, underbanked households were both more
About 5 percent of banked households reported not having accessed
their bank account in the past 12 months or did not report whether they
had accessed their account in the last 12 months. These households are
excluded from the estimates of bank account access presented here.
10
Mobile banking was defined in the 2013 survey questionnaire as using
text messages, mobile apps, or using a mobile phone’s Internet browser
or email to access a bank account.
9
likely to have access to smartphones than the general
population and to have used them to engage in
mobile banking.
• The vast majority of households (82.7 percent)
had access to a mobile phone, of which two
thirds (67.4 percent of all with mobile phone
access or 55.7 percent overall) were smartphones.
• Relative to fully banked households (86.8
percent), underbanked households were
somewhat more likely to have had access to
mobile phones (90.5 percent) and smartphones (64.5 percent of underbanked households compared with 59.0 percent of fully
banked households).
• Notably smaller, but still significant, proportions of unbanked households had access to
mobile phones (68.1 percent) and smartphones (33.1 percent).
• Overall, 23.2 percent of banked households used
mobile banking in the last 12 months, and a
greater share of underbanked households (29.2
percent) than fully banked households (21.7
percent) had used mobile banking.
• Among mobile banking users, underbanked
households were considerably more likely (32.4
percent) than the fully banked (21.6 percent) to
use mobile banking as their main banking
method. In contrast, fully banked mobile banking
users were significantly more likely (54.2 percent)
to use online banking as their main banking
method than the underbanked (38.1 percent).
• Monitoring of account balance or recent transactions was the most common mobile banking
activity (86.0 percent of mobile banking users).
Only a quarter (25.5 percent) of households that
used mobile banking used it to deposit a check.
Underbanked households were more likely (51.5
percent) to have used mobile text alerts than fully
banked households (44.6 percent).
Implications
The survey results presented in this report suggest
implications for policymakers, financial institutions
and other stakeholders who are working to improve
access to mainstream financial services.
1. Entrances and exits from the banking system are
often associated with changes in employment
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
10
and income. Interventions designed to help
households maintain and renew their banking
relationships through economic challenges may
reduce unbanked rates over time.
Banking status is dynamic: many households cycle in
and out of the banking system. For these households,
financial life events, such as job loss, significant
income loss, or a new job, appear to be important
explanations for why they enter or exit the banking
system.
Stakeholders might consider ways to cushion the
impact of adverse financial shocks on a household’s
ability or desire to maintain a bank account. In
particular, opportunities may exist for forbearance of
fees, flexible product design, or direct interventions.
Interventions could include targeted outreach or
financial education for recently unemployed households to encourage them to remain in the banking
system, for example.
The most frequently reported reason recently banked
households cited for opening an account was to
receive direct deposits. This finding suggests that
opportunities may exist for bringing newly employed
consumers into the financial mainstream by educating them on the use of bank accounts and on
personal financial management. Opportunities also
may exist to reach out to employers that do not yet
offer direct deposit to help them lower costs and help
their employees better understand opportunities
offered by the mainstream banking system.
2. Unbanked households are increasingly turning
to general purpose reloadable prepaid cards to
address their financial transaction needs and are
generally obtaining them at non-bank locations.
Opportunities may exist to meet these consumers’ needs within the banking system.
Prepaid card use is higher among unbanked households than other banking status groups, and has been
growing rapidly. Although many unbanked prepaid
card users, like other unbanked households, feel that
they cannot have a bank account because they “do
not have enough money to keep in an account or
meet a minimum balance” or because “bank fees are
too high or unpredictable,” these households do have
financial transaction needs. Many unbanked prepaid
card users are using non-bank prepaid cards, instead
of banking services, to make and receive payments.
Banking products such as a low-cost, safe transaction
account or a bank prepaid debit card that meets the
specifications of the FDIC Safe Accounts Template
could help meet these financial needs while building
banking relationships.11
In addition, many prepaid card users have prior
experience with banking services and are relatively
more inclined to enter a banking relationship going
forward. Specifically, unbanked prepaid card users
are more likely than nonusers to have had a bank
account in the past, and to say they are likely to open
an account in the future. This implies that, relative to
other unbanked households, unbanked prepaid card
users may be particularly receptive to entering or
rejoining the banking system.
3. Mobile banking is a potential tool to expand
economic inclusion but branches continue to
play an important role for many consumers,
including those who are underbanked.
Mobile banking has the potential to help expand
economic inclusion. Mobile technologies provide the
anytime, anyplace convenience that is highly valued
by underserved consumers. The survey results show
that mobile and smartphones are accessible to underserved populations, and that many underbanked
households are already using mobile banking. Smartphones are more prevalent among underbanked
households than among the fully banked. Underbanked households also are more likely than fully
banked households to use mobile banking and more
likely to use it as their primary banking channel.
Mobile technologies might also become useful tools
for bringing unbanked households into the financial
mainstream. While mobile phone ownership is less
common among unbanked households than among
the underbanked and fully banked, it is still sizable.
Innovations such as mobile account opening could
play a role in expanding access to banking for the
unbanked.
In order for mobile banking to help promote
economic inclusion, it is important that mobile banking offerings be designed and implemented in ways
that are accessible and beneficial to the underserved.
For example, to fully avail themselves of mobile
banking opportunities, users must often have access
to an online banking account. This could prevent
underserved consumers who cannot or do not wish
to use online banking from accessing and enjoying
the benefits of mobile banking services.
The FDIC Model Safe Accounts template provides insured institutions
with guidelines on offering cost-effective transaction and savings
accounts that are safe and affordable for consumers. See https://www.
fdic.gov/consumers/template/.
11
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
11
Notably, the rise of mobile banking as a channel has
not rendered other modes of banking unimportant,
and non-mobile channels should continue to have a
role in economic inclusion and outreach efforts.
Other banking modes continue to be widely used by
both underbanked and fully banked households.
Traditional banking channels, such as branches,
provide functions not commonly available through
online and mobile banking. In particular, FDIC pilot
studies have found that branch staff play an important role in making consumers aware of products,
providing basic financial education, and growing
their banking relationships.12 As banking technologies continue to evolve, it is important to continue
tracking how households access banking services, and
to assess opportunities to increase banking engagement with underserved consumers across all relevant
channels.
Rae-Ann Miller, Susan Burhouse, Luke Reynolds and Aileen Sampson,
“A Template for Success: The FDIC’s Small Dollar Loan Pilot Program,”
FDIC Quarterly 2010, Volume 4, No. 2 and Sherrie Rhine and Susan
Burhouse, “FDIC Model Safe Accounts Pilot: Final Report,” April 2012.
12
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
12
2. Background and Objectives
A. Background
When households open an account at a federally
insured depository institution, they establish a mainstream banking relationship. This relationship
provides opportunities for households to deposit
funds securely, conduct basic financial transactions,
accumulate savings, and access credit on fair and
affordable terms.
Despite these benefits, many households—referred to
in this report as “unbanked”—do not have an
account at an insured institution. Additional households have an account, but have also obtained financial services and products from non-bank, alternative
financial services (AFS) providers in the prior 12
months. These households are referred to here as
“underbanked.” The existence of unbanked and
underbanked households presents an opportunity for
banks to expand access to their products and services
and forge relationships with these underserved
groups, ultimately increasing economic inclusion.
The FDIC recognizes that public confidence in the
banking system is strengthened when banks effectively serve the broadest possible set of consumers. As
a result, the agency is committed to increasing the
participation of unbanked and underbanked households in the financial mainstream by ensuring that all
Americans have access to safe, secure, and affordable
banking services. The FDIC National Survey of
Unbanked and Underbanked Households represents
one contribution to this end.
Conducted to assess the inclusiveness of the banking
system, and in partial response to a statutory
mandate, this biennial survey provides estimates of
unbanked and underbanked populations.1 It also
seeks to provide insights that will inform efforts to
better meet the needs of these consumers.
The household survey is a key component of the FDIC’s efforts to
comply with a congressional mandate contained in section 7 of the
Federal Deposit Insurance Reform Conforming Amendments Act of 2005
(Pub. L. 109–173), which calls for the FDIC to conduct ongoing surveys,
“on efforts by insured depository institutions to bring those individuals and
families who have rarely, if ever, held a checking account, a savings
account or other type of transaction or check cashing account at an
insured depository institution (‘unbanked’) into the conventional finance
system.” Section 7 further instructs the FDIC to consider several factors
when conducting the surveys, including estimating the size and worth of
the unbanked market in the United States and identifying the primary
issues that prevent unbanked individuals from establishing conventional
accounts.
The FDIC conducts the household survey in partnership with the U.S. Census Bureau. Specifically, the
FDIC sponsors a special supplement on unbanked
and underbanked households that is administered in
conjunction with Census Bureau’s Current Population Survey (CPS).
This report presents the results of the 2013 FDIC
National Survey of Unbanked and Underbanked
Households. The survey was conducted in June 2013
and collected responses from 40,998 households2 (see
FDIC Technical Note in Appendix I for additional
details).
The results of this survey complement other FDIC
efforts and initiatives to increase sustainable and safe
access to the financial mainstream. For more information on those efforts and for additional resources
from this survey, including the ability to query the
underlying data, readers should visit http://www.
economicinclusion.gov.
The first FDIC National Survey of Unbanked and
Underbanked Households was conducted in January
2009, and the second survey was conducted in June
2011. Results from the 2009 and 2011 surveys are also
available at http://www.economicinclusion.gov.
The FDIC encourages researchers, policy makers,
consumer and community groups, and financial
institutions to use the publicly available data to
improve understanding of the issues and challenges
underserved households perceive when deciding how
and where to conduct financial transactions. The
information provided in this report, as well future
analysis produced with the publicly available data,
will contribute to efforts to create sustainable banking
opportunities for a broad set of consumers.
B. What’s New
1
Revisions to the 2013 Survey Instrument
The 2013 survey instrument is similar to the 2011
survey. However, a few important changes were made
to provide greater insight into the circumstances of
unbanked and underbanked households. The details
A total of 53,405 households participated in the June 2013 Current
Population Survey. Of these households, 40,998 (77 percent) also participated in the Unbanked/Underbanked Supplement.
2
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
13
of these changes, summarized below, are provided in
Appendix J.
The changes to the 2013 survey instrument broadly
fall into five areas:
First, questions were added to explore household
exits from and entrances into the banking system
over the prior year and whether major financial and
non-financial life events were associated with these
entrances and exits. A new question also asked recent
entrants about reasons for opening an account that
were not related to a life event. And existing questions on the reasons households were unbanked were
revised.
Second, questions on direct deposits and automatic
transfers into bank accounts were added to provide
greater detail about the use of automatic transfers
into different account types by households with
different characteristics.
Third, questions were added to better understand
households’ use of general purpose reloadable
prepaid debit cards, an emerging payment instrument. Many, although not all, such cards store funds
in accounts eligible for deposit insurance, and some
of these cards are issued directly by banks to
consumers.
Fourth, questions on households’ use of auto title
loans were added and use of these loans was one type
of Alternative Financial Service (AFS) used to identify underbanked households in the 2013 report. In
addition, questions were added on the locations from
which households obtained transaction AFS
products.
Finally, questions were added to explore households’
access to and use of technology such as smartphones,
which could provide additional opportunities to
establish and deepen banking relationships. In part,
to place answers to those questions in context, questions were also added on the broader set of methods
that households used to access their bank accounts.
While differences over time in survey results are of
interest, comparability of the 2013 results to certain
2009 and 2011 estimates is limited or not possible
due to differences across the surveys. For example,
underbanked estimates are not comparable across the
three surveys due to different types of AFS that were
used in each year to identify underbanked
households.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
14
3. Banking Status of U.S. Households
In 2013, an estimated 7.7 percent of households in
the United States (approximately one in thirteen
households) did not have a checking or savings
account and, for the purposes of this report, are
considered unbanked. This proportion represented
nearly 9.6 million households in which approximately
16.7 million adults and 8.7 million children lived.1
An additional 20.0 percent (24.8 million) of U.S.
households had a bank account but also used alternative financial services (AFS) outside of the banking
system. For the purposes of this report, these households are considered underbanked. Underbanked
households are defined as those households that had
a checking or savings account or both, and had used
at least one of the following AFS from non-bank
providers in the last 12 months: money orders, check
cashing, remittances, payday loans, refund anticipation loans, rent-to-own services, pawn shops loans, or
auto title loans.2 Approximately 50.9 million adults
and 16.6 million children lived in underbanked
households in 2013.3 Approximately 5.3 percent of
U.S. households were banked but information about
their use of AFS was insufficient to determine
whether they were underbanked.
Most households in the United States (67.0 percent)
had at least one bank account and had not, in the
past 12 months, used any of the types of AFS
included in the survey.4 These households are considered fully banked.
Figure 3.1 Banking Status Of U.S. Households
Underbanked
20.0
Unbanked
7.7
Banked,
Underbanked
Status
Unknown
5.3
Fully
Banked
67.0
Changes in Banking Status 2009-2013
The unbanked rate has varied from 7.6 percent in
2009 to 8.2 percent in 2011 to 7.7 in 2013.5 The
decrease in the unbanked rate between 2011 and 2013
can be explained by differences in the economic
conditions and demographic composition of households over this period.6 In particular, compared to
2011, households in 2013 had slightly higher levels of
employment and income, and were slightly older and
better educated. These characteristics are all associated with lower unbanked rates.7
All reported differences resulting from direct comparisons described in
the text are statistically significant at the 10 percent level unless otherwise noted. In this case, the 2009 and 2013 estimates are each significantly different from the 2011 estimate but not from each other.
6
Differences in the economic conditions and demographic composition
of households in the 2011 and 2013 surveys account for about 80 percent
of the difference in the unbanked rates across these two years. After
accounting for these differences, the 2011 and 2013 unbanked rates are
no longer statistically significantly different from each other.
7
For example, 29.0 percent of households in the 2013 survey had
incomes of at least $75,000 compared with 26.6 percent of households in
the 2011 survey. And 15.4 percent of households in the 2013 survey had
incomes of less than $15,000 compared with 16.2 percent of households in
the 2011 survey. In 2013, 0.5 percent of households with incomes of at
least $75,000 were unbanked and 27.7 percent of households with
incomes of less than $15,000 were unbanked. Because of such large
differences in unbanked rates across income groups, the differences in
income between the 2011 and 2013 surveys explain a portion of the difference in the overall unbanked rates between 2011 and 2013.
5
Adults are defined as people age 16 and older. This is a lower-bound
estimate of the number of unbanked adults in the United States because it
is based on the assumption that all adults residing in a “banked” household are banked in the sense that they may benefit from the account. A
banked household may have one or more unbanked adults; these
unbanked adults residing in banked households are not included in the
16.7 million adults figure cited in this report.
2
Auto title loans are loans in which consumers borrow using as collateral the title of the car or cars that they own. These are not loans used to
purchase an automobile.
3
This is an upper-bound estimate of the total number of underbanked
adults in the United States because it is based on the assumption that all
adults residing in an underbanked household are underbanked. However,
an underbanked household may have one or more adults who are not
underbanked.
4
Fully banked households may have never used AFS, used AFS more
than a year ago, or may have, in the past 12 months, used types of AFS
not included in this survey.
1
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
15
loans, the 2013 underbanked rates remained at similar levels relative to 2011.8
Figure 3.2 Unbanked Households By Year
10
7.6
8.2
7.7
Banking Status and Household Characteristics
8
The share of unbanked and underbanked households
continued to vary significantly by households’ socioeconomic and demographic characteristics (see
Appendix Table A-1a, included below).9 The highest
unbanked and underbanked rates were found among
6
4
2
Excluding the use of auto title loans, the proportion of underbanked
households decreased, from 20.1 percent in 2011 to 19.8 percent in 2013.
However, relative to 2011, the proportion of unknown answers for most of
the alternative financial services questions generally doubled, which
resulted in a higher share of banked households whose underbanked
status could not be determined (from 2.9 percent in 2011 to 5.2 percent in
2013 when excluding auto title loans). Excluding households with unknown
underbanked status, the underbanked rate stayed relatively constant: 20.7
percent in 2011 and 20.9 percent in 2013. Regardless of whether unknowns
are excluded, the difference in the underbanked rate between 2013 and
2011 is not statistically significant.
9
Household characteristics, such as race, age, education, and employment, are taken to be those of the owner or renter of the home (i.e.,
“householder”), unless the characteristic is one defined at the household
level, such as income or household type. For convenience, some abbreviated language will be used to refer to these household characteristics.
For example, the term “black household” refers to a household for which
the householder has been identified as black. Note that other members of
a household could have different characteristics from those of the householder. For instance, an unemployed household is defined as a household
whose householder is unemployed, but other household members could
be employed and earning income. The income measures included in this
report reflect the income earned by all household members and not only
the householder.
8
0
2009
2013
2011
Underbanked rates from the three surveys are not
directly comparable because of changes in the definition of underbanked households in both 2011 and
2013. In 2013, the definition of underbanked includes
the use of auto title loans, which was not considered
in 2011. Including the use of auto title loans has a
very small effect on the share of underbanked households – it increases the underbanked rate by 0.3
percentage points. Excluding the use of auto title
Appendix Table A-1a Banking Status By Household Characteristics, 2013
For all households, row percent
Characteristics
All
Number of
Households (1000s)
Percent of
Households
Unbanked (Percent)
Banked:
Underbanked
(Percent)
Banked: Fully
Banked (Percent)
Banked:
Underbanked Status
Unknown (Percent)
123,750
100
7.7
20.0
67.0
5.3
Married couple
59,102
100
3.4
17.7
73.9
5.0
Unmarried female-headed family
15,802
100
18.4
29.2
47.5
4.9
6,327
100
13.2
28.3
53.7
4.8
Female individual
22,150
100
7.4
17.2
69.4
6.0
Male individual
20,240
100
10.7
20.0
63.7
5.7
128
100
16.3
17.5
58.6
7.6
Black
16,801
100
20.5
33.1
40.0
6.3
Hispanic
Household Type
Unmarried male-headed family
Other
Race/Ethnicity
14,948
100
17.9
28.5
48.4
5.1
Asian
5,882
100
2.2
17.9
73.4
6.6
American Indian/Alaskan
1,464
100
16.9
25.5
53.0
4.6
Hawaiian/Pacific Islander
314
100
6.1
25.1
64.5
4.2
84,310
100
3.6
15.9
75.4
5.0
White non-Black non-Hispanic
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
16
Appendix Table A-1a Banking Status By Household Characteristics, 2013
For all households, row percent
Characteristics
Other non-Black non-Hispanic
Number of
Households (1000s)
Percent of
Households
Unbanked (Percent)
Banked:
Underbanked
(Percent)
Banked: Fully
Banked (Percent)
Banked:
Underbanked Status
Unknown (Percent)
NA
NA
NA
NA
NA
NA
Spanish is not the only language
spoken
121,097
100
7.1
19.9
67.6
5.3
Spanish is only language spoken
2,654
100
34.9
23.7
38.1
3.3
106,397
100
6.9
19.1
69.0
5.1
Foreign born citizen
9,252
100
4.7
24.0
64.6
6.7
Foreign born non citizen
8,102
100
22.7
28.0
43.9
5.4
15 to 24 years
6,244
100
15.7
30.8
48.8
4.6
25 to 34 years
20,464
100
12.5
24.7
58.3
4.6
35 to 44 years
21,408
100
9.0
23.8
62.5
4.6
45 to 54 years
24,551
100
7.5
21.9
65.4
5.2
55 to 64 years
22,710
100
5.6
17.7
71.7
5.0
65 years or more
28,372
100
3.5
11.6
78.2
6.7
Disabled
10,841
100
18.4
28.1
49.0
4.5
Not Disabled
78,293
100
7.2
21.1
66.8
4.9
Not Applicable
34,616
100
5.7
15.1
72.9
6.3
No high school degree
13,871
100
25.1
24.1
46.3
4.6
High school degree
33,684
100
10.8
21.9
61.7
5.6
Some college
36,007
100
5.6
23.0
66.2
5.2
College degree
40,188
100
1.1
14.3
79.3
5.3
75,587
100
5.4
21.7
67.8
5.0
5,436
100
23.0
25.3
47.8
3.8
42,727
100
9.9
16.3
67.9
5.9
Less than $15,000
19,044
100
27.7
22.4
45.2
4.7
Between $15,000 and $30,000
21,763
100
11.4
25.0
57.9
5.7
Between $30,000 and $50,000
24,496
100
5.1
23.3
65.7
5.9
Between $50,000 and $75,000
22,552
100
1.7
19.8
73.2
5.2
At Least $75,000
35,895
100
0.5
13.6
81.0
4.9
Homeowner
80,136
100
2.6
15.5
76.7
5.2
Non-homeowner
43,614
100
17.3
28.2
49.2
5.3
Northeast
22,199
100
6.8
19.3
68.4
5.5
Midwest
27,315
100
6.4
16.9
71.4
5.2
South
46,738
100
9.2
23.5
62.1
5.2
West
27,498
100
7.4
17.6
69.6
5.3
Spanish only language spoken
Nativity
U.S.-born
Age Group
Disability Status
Education
Employment Status
Employed
Unemployed
Not in labor force
Family Income
Homeownership
Geographic Region
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
17
Appendix Table A-1a Banking Status By Household Characteristics, 2013
For all households, row percent
Characteristics
Number of
Households (1000s)
Percent of
Households
Unbanked (Percent)
Banked:
Underbanked
(Percent)
Banked: Fully
Banked (Percent)
Banked:
Underbanked Status
Unknown (Percent)
Metropolitan Status
Metropolitan area - Principal City
34,510
100
11.4
22.3
60.8
5.5
Metropolitan area - Balance
51,229
100
5.5
17.8
71.1
5.6
Not in Metropolitan area
19,325
100
8.5
21.0
66.1
4.5
Not Identified
18,686
100
6.4
20.8
68.1
4.8
NA= Not available because the sample size was too small to produce a precise estimate.
-= For this table cell, the estimated proportion would round to zero. The population proportion, however, is likely to be slightly greater than zero.
Figures do not always reconcile to totals because of rounding.
non-Asian minorities, lower-income households,
younger households, unemployed households and
working-age disabled households.10 Close to half of
all households in these groups were unbanked or
underbanked compared to slightly more than
one-quarter of all households.
Relative to 2011, the estimated unbanked rates in
2013 were generally similar for most groups.11 One
exception is Hispanic households. While still relatively high, the unbanked rate for Hispanic households decreased to 17.9 percent in 2013 from 20.1
percent in 2011. Improvements in economic conditions and changing demographics among Hispanic
households over this time period explain nearly half
of this reduction in the unbanked rate. In particular,
relative to 2011, Hispanic households in 2013 experienced higher levels of employment, income and
educational attainment. These characteristics are all
associated with lower unbanked rates.
Banking Status and Geography
The share of unbanked and underbanked households
varied substantially by geography. The regional variation in unbanked and underbanked rates in 2013 is
consistent with previous survey results. The Southern
region had the highest unbanked and underbanked
rates (9.2 percent and 23.5 percent, respectively). In
fact, while 38 percent of U.S. households live in the
South, approximately 44 percent of unbanked and
underbanked households lived there. The Midwest
Working-age is considered to be between age 25 and 64. Consistent
with our approach for other household characteristics such as employment status, we classify a household as one with disabilities based on the
characteristics of the owner or renter of the home (i.e., “householder”).
Please refer to Appendix I for a detailed discussion of how we classified
households as disabled.
11
Reported differences between groups described in the text are statistically significant at the 10% level in a model that includes the entire set of
household characteristics listed in Appendix Table A-1.
10
region had the lowest unbanked and underbanked
rates (6.4 percent and 16.9 percent). Unbanked rates
ranged from 1.9 percent in Alaska to 14.5 percent in
Mississippi, while underbanked rates were lowest in
Wisconsin (10.4 percent) and highest in Mississippi
(32.8 percent). Relative to 2011, four states experienced statistically significant declines in unbanked
rates: Alaska (from 5.2 percent to 1.9 percent), North
Dakota (from 5.3 percent to 2.8 percent), Texas (from
12.8 percent to 10.4 percent), and Michigan (from 7.7
percent to 5.7 percent).
Household Banking Status Transitions
The 2013 survey asked whether households experienced changes in banking status, including the timeframe in which they became banked or unbanked.
We use these questions to examine the dynamic
nature of household banking status.
Among unbanked households in 2013, consistent
with previous survey results, slightly more than half
(52.6 percent) had never been banked, which represented 4.1 percent of all U.S. households. However,
for certain demographic groups, the share of
unbanked households that had never had an account
was disproportionately high. For example, 70.4
percent of unbanked Hispanic households never had
an account (see Appendix Table A-4).
Slightly less than half (45.9 percent) of unbanked
households in 2013 had a bank account in the past
(previously banked households). Most of the previously banked households (79.5 percent) had been
without an account for more than 12 months, while
19.4 percent (or 8.9 percent of all unbanked households) became unbanked more recently.12
In comparison, in 2009, 28.1 percent of previously unbanked households
were recently unbanked and in 2011, the comparable percentage was 20.3
percent.
12
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
18
Figure 3.3 Unbanked Rates By State, 2013
WA
ND
MT
OR
MN
ME
WI
SD
ID
IA
NE
IL
NV
UT
NY
MI
WY
CO
KS
PA
OH
IN
NJ
MD
DC DE
WV
MO
VT
NH
MA
CTRI
[1.9 to 4.5)
[4.5 to 5.8)
VA
KY
[5.8 to 7.4)
CA
TN
OK
AR
NM
AZ
[7.4 to 10.4)
NC
[10.4 to 14.5]
SC
MS
TX
AL
GA
LA
AK
FL
HI
Figure 3.4 Underbanked Rates By State, 2013
WA
ND
MT
OR
MN
ME
WI
SD
ID
MI
WY
IA
NE
IL
NV
UT
CO
KS
OH
IN
MO
KY
PA
NJ
MD
DE
DC
WV
VA
CA
OK
AZ
NM
VT
NH
NY
MA
CTRI
TN
NC
AR
[10.4 to 17.1)
[17.1 to 19.0)
[19 to 20)
[20.0 to 23.5)
[23.5 to 32.8]
SC
MS
TX
AK
AL
GA
LA
FL
HI
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
19
Figure 3.5 Previous Banking Status Of Unbanked Households
in 2013
Had bank account
more than 1 yr ago
36.5
for a year or more, a non-trivial number recently
became banked or unbanked.
Table 3.1 Household Banking Status Transitions
For all housholds with non-missing recent bank status and non-missing life
events.
Longerterm
Unbanked
Recently
Unbanked
Recently
Banked
Longerterm
Banked
115,872
7,973
807
1,800
105,292
100
6.9
0.7
1.6
90.9
All
Had bank account
within last year
8.9
Unknown 1.5
Prev banked,
recency unknown
0.5
Never had bank account
52.6
Focusing on whether households had experienced
changes to their banking status over the past year, we
classify households into one of four groups, as shown
in Table 3.1.13 Almost 7 percent (6.9 percent) of
households were “longer-term unbanked”, meaning
they did not have a bank account in 2013 and also
did not have a bank account within the last year.14
A small proportion of households, 0.7 percent, were
“recently unbanked”, meaning they did not have a
bank account at the time of the 2013 survey, but had
an account at some point within the last year. Almost
one in ten unbanked households were “recently
unbanked”.
Another 1.6 percent of households were “recently
banked”, meaning they had an account in 2013, but
at some point within the last 12 months no one in the
household had an account. The remaining 90.9
percent of households were “longer-term banked”,
meaning they had an account in 2013, and had at
least one bank account continuously for at least 12
months.
These results show that while the vast majority of
households had been in their current banking status
The estimates presented in Tables 3.1, 3.2, 3.3 and Appendix Table A-6b
are for households for which we have information on recent bank status
and incidence of life events. Specifically, the estimates were computed
excluding 882 observations (representing roughly 2.8 million households)
removed due to missing information on recent banking status, and 1,602
additional observations (representing roughly 5.0 million households)
removed due to missing data on the incidence of life events.
14
Households that were “longer-term unbanked” may never have had an
account or they may have had an account more than a year ago.
13
Number of Households (1000s)
Category as a
share of all
households
Banking Status Transitions and Household
Characteristics
It is useful to understand how the socioeconomic and
demographic characteristics of households differed
across the four banking status transition categories.
As illustrated in Appendix Table A-6b (included on
the following page), relative to the longer-term
banked, households that recently transitioned into or
out of a mainstream bank account had higher
proportions of certain socioeconomic and demographic characteristics that are associated with being
unbanked.
For example, 48.0 percent of recently unbanked
households and 32.4 percent of recently banked
households had family income of less than $15,000.
In contrast, 56.6 percent of longer-term unbanked
households had income of less than $15,000,
compared to only 11.6 percent of longer-term banked
households. And 22.9 percent of recently unbanked
households and 24.2 percent of recently banked
households did not have a high-school diploma,
compared with 38.2 percent of longer-term unbanked
and 8.8 percent of longer-term banked households.
Certain household characteristics were disproportionately represented among the recently unbanked.
In particular, the unemployment rate among recently
unbanked households was 25.4 percent, substantially
higher than among the longer-term unbanked (12.0
percent), recently banked (8.1 percent), and longerterm banked (3.6 percent). Similarly, 49.3 percent of
recently-unbanked households were black, compared
with 34.0 percent of longer-term unbanked, 25.0
percent of recently banked, and 11.2 percent of
longer-term banked.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
20
Appendix Table A-6b Household Characteristics By Banking Transitions, 2013
For all households with non-missing recent bank status and non-missing life events, column percent
Characteristics
Number of Households (1000s)
Longer Term
Unbanked
All
Recently
Unbanked
Recently
Banked
Longer Term
Banked
115,872
7,973
807
1,800
105,292
100
100
100
100
100
Married couple
48.2
21.1
23.6
33.8
50.7
Unmarried female-headed family
12.7
30.8
33.9
23.8
11.0
5.2
9.0
8.9
9.1
4.8
Female individual
17.7
16.6
17.2
13.1
17.9
Male individual
16.1
22.3
16.4
20.1
15.6
0.1
0.3
-
-
0.1
Black
13.2
34.0
49.3
25.0
11.2
Hispanic
12.1
29.5
18.4
22.8
10.5
4.7
1.3
0.1
5.1
5.0
Percent of Households
Household Type (Percent)
Unmarried male-headed family
Other
Race/Ethnicity (Percent)
Asian
American Indian/Alaskan
1.2
2.6
3.2
2.7
1.0
Hawaiian/Pacific Islander
0.3
0.2
-
0.2
0.3
White non-Black non-Hispanic
68.5
32.4
29.0
44.2
72.0
Other non-Black non-Hispanic
-
-
-
-
-
97.9
89.7
96.3
93.7
98.6
2.1
10.3
3.7
6.3
1.4
86.1
75.1
85.5
79.0
87.1
Foreign born citizen
7.4
4.6
4.3
8.8
7.6
Foreign born non citizen
6.5
20.3
10.2
12.2
5.3
Spanish only language spoken (Percent)
Spanish is not the only language spoken
Spanish is only language spoken
Nativity (Percent)
U.S.-born
Age Group (Percent)
15 to 24 years
5.1
10.5
12.5
10.0
4.5
25 to 34 years
16.6
26.1
33.9
20.5
15.7
35 to 44 years
17.4
20.2
20.6
20.9
17.1
45 to 54 years
19.9
19.4
17.7
21.9
19.9
55 to 64 years
18.5
13.6
7.4
14.7
19.0
65 years or more
22.6
10.1
8.1
12.0
23.8
Disability Status (Percent)
8.7
21.3
14.7
17.3
7.6
Not Disabled
Disabled
63.6
58.1
64.8
60.7
64.1
Not Applicable
27.6
20.6
20.5
22.0
28.3
Education (Percent)
No high school degree
11.2
38.2
22.9
24.2
8.8
High school degree
27.1
38.1
36.3
34.2
26.0
Some college
29.1
19.4
36.9
29.6
29.8
College degree
32.7
4.3
4.0
12.1
35.4
61.4
43.1
43.8
60.0
63.0
4.4
12.0
25.4
8.1
3.6
Employment Status (Percent)
Employed
Unemployed
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
21
Appendix Table A-6b Household Characteristics By Banking Transitions, 2013
For all households with non-missing recent bank status and non-missing life events, column percent
Characteristics
Longer Term
Unbanked
All
Not in labor force
Recently
Unbanked
Recently
Banked
Longer Term
Banked
34.2
45.0
30.9
31.9
33.4
Less than $15,000
15.3
56.6
48.0
32.4
11.6
Between $15,000 and $30,000
17.4
25.2
29.9
28.9
16.6
Between $30,000 and $50,000
19.7
12.7
13.7
18.4
20.3
Between $50,000 and $75,000
18.3
3.5
8.0
8.1
19.7
At Least $75,000
29.3
2.0
0.4
12.2
31.9
Homeowner
65.0
20.8
19.2
39.6
69.1
Non-homeowner
35.0
79.2
80.8
60.4
30.9
Northeast
17.9
15.9
15.0
18.6
18.0
Midwest
22.1
17.8
19.0
17.4
22.5
South
37.8
44.7
43.4
45.0
37.1
West
22.3
21.7
22.6
19.0
22.4
Metropolitan area - Principal City
27.8
41.5
40.9
35.4
26.5
Metropolitan area - Balance
41.3
28.9
31.6
33.8
42.4
Not in Metropolitan area
15.8
17.1
14.5
16.0
15.7
Not Identified
15.2
12.5
12.9
14.7
15.4
Family Income (Percent)
Homeownership (Percent)
Geographic Region (Percent)
Metropolitan Status (Percent)
NA= Not available because the sample size was too small to produce a precise estimate.
-= For this table cell, the estimated proportion would round to zero. The population proportion, however, is likely to be slightly greater than zero.
Figures do not always reconcile to totals because of rounding.
Banking Status Transitions and Incidence of Life
Events
Different types of major life events experienced by
recently unbanked and recently banked households
may have contributed to the changes in these households’ banking status. The 2013 survey asked new
questions about major financial life events, which
included significant income loss or gain, job loss or
new job, significant increased or decreased expenses,
and retirement. The 2013 survey also asked about
major non-financial life events, including divorce or
death, new marriage, birth, and moves. Households
were asked if they had experienced any of these
events, and recently unbanked and recently banked
households were asked whether any events that they
experienced contributed to them opening or closing
their bank account.
Relatively small proportions of households experienced a life event in the past year, but some households were more likely to experience such an event
than others. Table 3.2 shows the incidence of life
events across the four banking status transition cate-
gories. Households that recently became banked or
unbanked reported a relatively high incidence of
financial life events, especially job and significant
income changes, suggesting that such households also
faced greater volatility in their employment status.
For example, 38.1 percent of recently unbanked
households and 30.7 percent of recently banked
households experienced a significant loss of income
in the last 12 months, compared with 25.1 percent of
longer-term unbanked and 13.0 percent of longer
term banked households.
The incidence of non-financial life events was generally small and relatively consistent across all four
banking status transitions categories, with the exception of moves. Similar to the financial life events,
moves or relocations were experienced by higher
proportions of recently banked and recently
unbanked households. Households that experienced
moves were also likely to have experienced either
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
22
changes in employment or significant changes in
income.15
Table 3.2 Banking Status Transitions And Incidence
Of Life Events
For all households with non-missing recent bank status and non-missing life
events, column percent
Life Event
All
Longerterm
Recently
Unbanked Unbanked
Recently
Banked
Longerterm
Banked
Job or Significant
income loss
17.1
29.5
44.9
37.2
15.6
Significant income
loss
14.3
25.1
38.1
30.7
13.0
5.8
4.3
6.4
7.3
5.9
Job loss
10.2
18.7
35.4
23.0
9.2
New job
13.0
11.5
19.3
26.6
12.9
2.8
1.6
2.0
2.9
2.9
Significant increase in
Household expenses
15.7
16.1
25.3
21.8
15.5
Significant decrease in
Household expenses
2.2
3.6
5.7
4.5
2.0
Divorce or death
2.3
2.4
2.1
3.2
2.3
New marriage
1.7
1.6
2.4
2.5
1.7
Birth or adoption
3.1
4.8
6.3
3.7
2.9
10.0
14.2
20.4
18.0
9.4
Significant increase in
income
Retirement
Move or relocation
The relatively high incidence of adverse financial
shocks among recently unbanked households
suggests that such events may lead to bank account
closure. The results also suggest that positive changes
might be associated with bank account opening, as a
higher proportion of recently banked households
experienced a new job (26.6 percent) compared with
households in the other three banking status transitions categories.16
To learn more about the possible causal linkages
between life events and bank account openings and
closings, the survey asked households not only
whether they experienced the specified events but
also whether any life event they experienced contributed to a change in banking status. These results are
presented in Table 3.3, and provide additional
evidence about the extent to which specific events
may affect household decisions to enter or exit the
banking system.
The majority of households that were banked in the
previous 12 months and that experienced a significant income loss or a job loss did not become
unbanked.17 However, for households that did
recently become unbanked, losing a job or experiencing a significant reduction in income appeared to be
common triggers for bank account closure. Among
households that recently became unbanked, 34.1
percent experienced a significant income loss or a job
loss that they said contributed to the household
becoming unbanked.18 More than three-quarters of
recently unbanked households that experienced a job
or significant income loss said that those events
contributed to them losing their accounts.
The majority of households that were unbanked in
the previous 12 months and experienced a new job
did not open a bank account.19 However, among
households that recently became banked, 26.6 percent
reported a new job in the prior 12 months and 19.4
percent reported that a new job contributed to their
opening a bank account. In other words, more than
70 percent of the recently banked households that
reported a new job indicated that the change in
employment contributed to their decision to open an
account.
Table 3.3 Contribution Of Life Events To Bank
Account Opening And Closing
For all households with non-missing recent bank status and non-missing life
events, column percent
Recently Unbanked
Life Event
Recently Banked
Event Occurred
Event Occurred
and
and
Contributed to
Contributed to
Account
Account
Event Occurred
Closing
Event Occurred
Opening
Job or Significant income
loss
44.9
34.1
37.2
12.9
Significant
income loss
38.1
27.3
30.7
8.7
Significant
increase in
income
6.4
1.4
7.3
3.8
Job loss
35.4
27.6
23.0
8.9
New job
19.3
6.1
26.6
19.4
2.0
0.3
2.9
1.5
Retirement
Among households that were banked and experienced an income or
job loss within the previous year, less than 5 percent had become
unbanked by the time of the survey.
18
There was substantial overlap between the households that experienced job loss and those that experienced significant income loss. For
example, among recently unbanked households that experienced a significant income loss, 75 percent also reported a job loss.
19
Among households that were unbanked and got a new job in the previous year, less than 5 percent had become banked by the time of the
survey.
17
Among households that experienced a move in the last 12 months,
about 44 percent also gained or lost a job and 35 percent also experienced significant income gain or loss.
16
A multivariate model that included controls for household characteristics and the incidence of life events was estimated to identify the most
important determinants of household exit and entry into the banking
system. Among the various life events, job loss was the most important
determinant of bank account exit, and a new job was the most important
determinant of entry into the banking system.
15
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
23
Table 3.3 Contribution Of Life Events To Bank
Account Opening And Closing
For all households with non-missing recent bank status and non-missing life
events, column percent
Recently Unbanked
Life Event
Recently Banked
Event Occurred
Event Occurred
and
and
Contributed to
Contributed to
Account
Account
Event Occurred
Closing
Event Occurred
Opening
Significant
increase in
Household
expenses
25.3
15.0
21.8
9.1
Significant
decrease in
Household
expenses
5.7
2.5
4.5
1.0
Divorce or
death
2.1
1.0
3.2
1.5
New marriage
2.4
0.5
2.5
1.5
Birth or
adoption
6.3
2.2
3.7
1.2
Move or
relocation
20.4
8.2
18.0
8.4
Reasons for Being Unbanked
As in previous years, all unbanked households were
asked why they do not have a bank account although
this question was revised in the 2013 survey, limiting
comparability across years. In addition to a change in
how the question was presented in the 2013 survey,20
the list of reasons was changed; notably, the reason
“do not need or want an account” was deleted to try
to better understand why households feel they do not
need an account. This reason was a popular response
in both the 2011 and 2009 surveys.21
In 2013, the most common reason, selected by more
than half of all unbanked households (57.5 percent),
was that they did not feel they had enough money to
keep in an account or to meet a minimum balance
requirement. More than one in three unbanked
households (35.6 percent) said that lack of money
In the 2013 survey, respondents were able to indicate multiple reasons
for why no one in the household had a bank account and then were asked
to choose a single main reason from the indicated list. In 2011, respondents were asked only about the single main reason why no one in the
household had a bank account. And in 2009, respondents were able to
indicate all applicable reasons under three sub-categories (customer
service, financial reasons, other reasons) and then were asked to select
the main reason from the indicated list. As a result, the results from 2013
are not directly comparable to results from the previous surveys.
21
In the 2011 survey, this was the second most frequently selected
reason (selected by 21.0 percent of all unbanked households). In the 2009
survey, this was the fourth most commonly selected reason for never
banked households (selected by 12.4 percent of never banked households) and the second most commonly selected reason for previously
banked households (selected by 25.8 percent of previously banked
households).
20
was the main reason behind their decision to be
unbanked. In 2011 and 2009, lack of money was also
the most frequently selected reason for being
unbanked.
The new life events questions provide additional
context for households that reported not having
enough money to have an account. About half (49.0
percent) of unbanked households that experienced a
significant loss of income said their main reason for
being unbanked was not having enough money.
Among households with significant income loss that
they said contributed to closing their account, 60.9
percent selected this as their main reason for being
unbanked.
The second most common reason households cited
for not having a bank account was a lack of trust in
or dislike of dealing with banks: 34.2 percent reported
this as one reason for being unbanked and 14.9
percent reported it as the main reason.
The third most common reason households identified for being unbanked was high or unpredictable
account fees, cited by 30.8 percent of unbanked
households as one reason and by 13.4 percent of
unbanked households as the main reason.
Previously banked households were more likely (37.6
percent) to cite high or unpredictable account fees as
a reason why they did not have an account than were
households that never had an account (25.4 percent).
Also, almost one in five (17.7 percent) previously
banked households said that fees were the main
reason why they were unbanked, compared to one in
ten (9.8 percent) households that never had an
account. Notably this is the largest difference between
previously banked and never banked households
regarding their reasons for being unbanked.
The new life events questions also lend additional
context here: among households that became
unbanked in the last year and had a significant loss of
income that contributed to the bank account closure,
almost one in five (18.0 percent) said that their main
reason for being unbanked was that account fees were
too high or unpredictable.
In 2013, households were asked, for the first time,
whether they were unbanked because not having an
account gave them more privacy for their personal
finances. More than one in four unbanked households (26.4 percent) reported that this was one of the
reasons why they choose not to have an account, but
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
24
Figure 3.6 Reasons Households Were Unbanked
57.5
Do not have enough money
35.6
34.2
Don’t like dealing with or don’t trust banks
14.9
30.8
Account fees are too high or unpredictable
13.4
16.8
ID, credit, or banking history problems
6.8
Cited as a reason
Main reason
26.4
Privacy
3.7
6.8
Inconvenient hours or locations
2.6
10.5
Banks do not offer needed products or services
1.2
12.5
Other
7.4
0
10
20
30
40
50
60
70
Figure 3.7 Reasons Previously Banked Households Were Unbanked
60.5
Do not have enough money
36.3
37.6
Account fees are too high or unpredictable
17.7
36.3
Don’t like dealing with or don’t trust banks
13.9
16.3
ID, credit, or banking history problems
6.8
Cited as a reason
Main reason
28.9
Privacy
3.9
8.1
Inconvenient hours or locations
3.1
11.7
Banks do not offer needed products or services
1.0
16.0
Other
9.5
0
10
20
30
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
40
50
60
70
25
Figure 3.8 Reasons Never Banked Households Were Unbanked
55.9
Do not have enough money
35.7
33.1
Don’t like dealing with or don’t trust banks
16.1
25.4
Account fees are too high or unpredictable
9.8
17.3
ID, credit, or banking history problems
7.0
Cited as a reason
Main reason
24.7
Privacy
3.6
5.8
Inconvenient hours or locations
2.3
9.5
Banks do not offer needed products or services
1.5
9.7
Other
5.8
0
10
it was a main reason for being unbanked for just 3.7
percent of unbanked households.
A relatively small proportion of households (6.8
percent) were unbanked mainly because they could
not open an account due to ID, credit or banking
history problems. However, as in previous surveys,
this reason is more important among unbanked
Hispanic households, nearly one quarter (23.0
percent) of which said these problems were a reason
why they were unbanked. About one in ten (10.7
percent) unbanked Hispanic households reported this
to be the main reason they did not have an account.
Future Banking Plans of Unbanked Households
Unbanked households’ intentions to join, or rejoin,
the banking system provide additional insights into
the banking status transitions discussed earlier in this
section. The 2013 survey, like the previous surveys,
asked unbanked households whether they intended to
open a bank account in the future. Unlike the 2011
survey, which did not specify a time horizon for
account opening, the 2013 survey asked households
20
30
40
50
60
70
how likely they were to open an account within the
next 12 months. Most unbanked households (58.5
percent) reported that they were “not too likely” or
“not likely at all” (not likely) to do so. Only about
one-third (35.7 percent) of unbanked households
reported that they were “very likely” or “somewhat
likely” (likely) to open an account in the next 12
months, including 13.8 percent that reported being
“very likely” to do so.22
Higher proportions of households that previously
had an account reported being likely to open one in
the next 12 months compared with households that
had never been banked. Almost half (48.6 percent) of
unbanked households that previously had an account
reported being likely to open another in the next 12
months compared with only about one-quarter (25.2
percent) of households that had never been banked.
Recency of a household’s banking relationship also
appeared to be correlated with the household’s
reported likelihood of rejoining the banking system.
In the 2011 survey, 60.7 percent of unbanked households reported not
being likely to open an account in the future and 33.9 percent reported
being likely to do so.
22
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
26
Almost three out of four (74.8 percent) unbanked
households that recently had a bank account reported
being likely to open another in the next 12 months,
compared with 42.7 percent of unbanked households
that had an account more than a year ago. These
results suggest that many consumers who have had
experience, especially recent experience, with a bank
account find value in having one.
In addition, relatively large proportions of households headed by younger householders reported
being likely to open an account in the next 12
months. See Appendix Table A-10 for households’
reported likelihood of opening an account in the next
12 months by household characteristics.
Reasons that Recently Banked Households Opened
Accounts
The 2009 and 2011 surveys provided insights into the
reasons households were likely to open an account in
the future. In both years, meeting transaction needs,
security, and saving were consistently the most
frequently reported reasons.23 For example, in 2011
unbanked households that reported being likely to
open an account in the future reported that their
main reason for doing so were: “to be able to write
checks and pay bills” (27.4 percent), “to put money in
a safe place” (27.4 percent) and “to save money for
the future” (23.8 percent). A smaller share of households (7.9 percent) selected “to take advantage of
direct deposit of paychecks” as the main reason for
wanting to open an account in the future. This is not
surprising given that households are unlikely to be
able to forecast future needs for direct deposit, which
are dependent on current and future employers’
payroll methods.
banked households reported opening an account “to
put money in a safe place” and roughly 7 percent (7.1
percent) selected savings as their main reason for
opening an account.
Results from these surveys can inform efforts to
increase the number of banked households. The 2013
results indicate that immediate, practical triggers,
such as the need to receive direct deposits, can be
important drivers in the decision to join the banking
system. The 2011 and 2009 survey results show that
longer-term goals such as savings are also important
reasons that unbanked households want to open
accounts in the future.
The fact that the largest share of recently banked
households reported opening an account to receive
direct deposits is consistent with the findings about
the contribution of new jobs to account opening for
recently banked households, discussed in the section
on banking status transitions. A new job may offer
new opportunities for the direct deposit of paychecks.
These findings suggest that promoting and encouraging direct deposit of paychecks could contribute to
bringing unbanked consumers into the banking
system. In addition, being mindful about the transaction, security and savings motivations that many
unbanked households associate with bank accounts
could help tailor products to meet these specific
needs.
The 2013 survey did not ask unbanked households
that reported being likely to open an account in the
future why they wanted to do so. Instead, the survey
asked recently banked households about the main
reason why they had opened an account in the past
12 months. A majority of these recently banked
households cited reasons related to meeting transaction needs: about one third (34.2 percent) opened an
account “to receive direct deposits” and one quarter
(25.0 percent) “to pay for everyday items, pay bills,
and write checks”. One in five (19.1 percent) recently
In 2011, the survey asked households that reported being very likely
and somewhat likely to open an account in the future about the reasons
why they would do so. In 2009 the survey only asked about the reasons for
opening an account to households that reported being very likely to do so
in the future. Despite this difference in households that were asked the
question, the most frequent reasons selected were similar in both years.
23
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
27
4. Checking and Savings Account Ownership, and Automatic Transfers
Checking and Savings Account Ownership
Consistent with 2011, checking account ownership in
2013 was considerably more widespread than ownership of savings accounts. The vast majority of all U.S.
households (88.5 percent), including almost all
banked households (96.1 percent), owned a checking
account. Less than 70 percent (68.8 percent) of all
households owned a savings account. Roughly
two-thirds (66.8 percent) of all households owned
both a checking and a savings account (see Appendix
Table B-1).
In total, 29.5 percent of U.S. households (including
the 7.7 percent of U.S. households that were
unbanked) did not have a savings account, which
suggests that opportunities continue to exist for
banks to develop and implement innovative
programs to facilitate household savings. Similar to
the unbanked population overall, higher proportions
of households that did not have savings accounts
were black or Hispanic, foreign-born and unemployed compared with households with a savings
account. Households without savings accounts were
also more likely to have lower incomes and lower
levels of education than households that owned
savings accounts.
Among banked households, the underbanked were
less likely than the fully banked to have a savings
account. Slightly less than one-third (31.7 percent) of
underbanked households did not have savings
accounts compared with about one-fifth (21.2
percent) of fully banked households.
Recently banked households were less likely than
those that had been banked longer term to have
savings accounts. Almost half of recently banked
households (47.2 percent) did not have a savings
account, compared to less than one quarter (23.2
percent) of longer-term banked households.
Direct Deposits and Automatic Transfers into Bank
Accounts
For the first time, the 2013 survey asked all banked
households whether they had money directly deposited or automatically transferred into a bank account,
including automatic transfers between accounts. The
vast majority (80.3 percent) of banked households
had money directly deposited into a bank account or
automatically transferred funds between accounts. As
noted previously, receiving direct deposits was the
most frequent main reason for opening an account,
given by about one-third of recently banked households. However, recently banked households were
less likely to have direct deposit (66.4 percent)
compared to households that have had an account for
longer (82.1 percent).
Use of direct deposits or automatic transfers
increased with income. Among households with
incomes of less than $15,000, 71.2 percent used direct
deposits or automatic transfers compared to 87.6
percent of households with incomes of at least
$75,000. These differences could be partly due to
differences in availability of direct deposit in different
jobs.
Banked foreign born households (67.0 percent),
particularly non-citizens (58.7 percent), were also
considerably less likely than U.S.-born households
(82.3 percent) to have direct deposits or automatic
transfers to their bank account.
Among banked households that had direct deposits
or automatic transfers, the vast majority (81.4
percent) deposited or transferred the funds into a
checking account only. Fewer than one in five households (17.3 percent) that had automatic deposits or
transfers deposited or transferred those funds into a
savings account, including 13.2 percent who had
money transferred into both a savings and a checking
account.
Among households with savings accounts that had
direct deposit or automatic transfers, 22.0 percent
deposited or transferred funds into a savings account.
Figure 4.1 Direct Deposit And Automatic Transfer Bank
Account Types For Households With Direct Deposit Or
Automatic Transfers
Checking Only
81.4
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
Account Type Unknown
1.3
Savings Only
4.1
Checking and Savings
13.2
28
5. Prepaid Debit Cards
General purpose reloadable prepaid debit cards are a
rapidly growing payment instrument that has traditionally been marketed with a focus on underserved
households. Many, although not all, such cards store
funds in accounts eligible for deposit insurance, and
some of these cards are issued directly by banks to
consumers. According to the 2013 Federal Reserve
Payments Study, prepaid card payment transactions
increased 15.8 percent annually between 2009 and
2012, reaching 9.2 billion transactions in 2012.1 Similar to a checking account, these cards can be used to
pay bills, withdraw cash at ATMs, make purchases,
deposit checks, and receive direct deposits.
In 2013, 12.0 percent of all households had ever used
prepaid cards. Their use was more common among
unbanked and underbanked households. More than a
quarter (27.1 percent) of unbanked households had
ever used prepaid cards, compared with 19.6 percent
of underbanked households and 8.8 percent of fully
banked households.
Consistent with the growth in prepaid card transactions noted in the Federal Reserve Payments Study,
the 12.0 percent of all households in 2013 that had
ever used a prepaid card was higher than the 10.1
percent in 2011 and 9.9 percent in 2009.2 Prepaid
card use among unbanked households, in particular,
increased substantially in this time: the share of
unbanked households that had ever used a prepaid
card increased to 27.1 percent in 2013 from 17.8
percent in 2011 and 12.2 percent in 2009.
Figure 5.1 Households That Had Ever Used Prepaid Cards By Banking Status And Year
40
30
2011
2013
27.1
19.7
20
17.8
17.4
12.0
10
10.1
8.9
7.3
0
All
Unbanked
Underbanked
(2011 Definition)
Fully Banked
(2011 Definition)
Note: In order to compare prepaid card use in 2011 and 2013, the definition of underbanked used in this graph is the 2011 definition of underbanked (which excludes auto
title loans). Using the 2011 definition changes very slightly the prepaid card use percentages for both underbanked and fully banked households compared with using the
2013 definition. Figure 5.2 in this section, which focuses on prepaid card use in 2013, uses the 2013 definition of underbanked.
Federal Reserve Board of Governors. 2014. The 2013 Federal Reserve
Payment Study, Recent and Long-Term Trends in the United States: 20002012, July 2014. Available at http://www.frbservices.org/files/communications/pdf/general/2013_fed_res_paymt_study_detailed_rpt.pdf.
1
The proportion of households with unknown prepaid card use
increased to 5.7 percent in 2013 from 2.9 percent in 2011 and 2.2 percent
in 2009.
2
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
29
Figure 5.2 Recency Of Prepaid Card Use By Banking Status, 2013
40
27.1
30
22.3
19.6
Ever Used
Used in Last 12 Months
Used in Last 30 Days
16.8
20
13.1
12.0
10
8.8
7.9
6.6
5.3
3.9
1.9
0
All
Unbanked
In the 2013 survey, we added new questions on
households’ use of prepaid cards, including use in the
last 12 months and in the last 30 days. Nearly eight
percent (7.9) of all households used prepaid cards in
the last 12 months, and 3.9 percent had used them in
the last 30 days.
The share of households that used prepaid cards in
the prior twelve months and in the past 30 days
varied substantially by banking status, as seen in
Figure 5.2. Substantially higher shares of unbanked
households had used prepaid cards in the last 12
months (22.3 percent) and in the last 30 days (16.8
percent) than the shares of either underbanked or
fully banked households.
Underbanked
Fully Banked
For the remainder of this section, we focus on
prepaid card use by households in the past 12 months
which we refer to as prepaid card use.
Figure 5.3 Banking Status of Households That Used Prepaid
Cards In The Last 12 Months
Underbanked
33.2
Unbanked and underbanked households made up the
majority of prepaid card users. Among households
that used prepaid cards in the last 12 months, more
than half (55.0 percent) were unbanked or underbanked. Among households that used prepaid cards
in the last 30 days, two-thirds (66.6 percent) were
unbanked or underbanked.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
Unbanked
21.8
Banked,
Underbanked
Status
Unknown
0.5
Fully
Banked
44.6
30
Figure 5.4 Banking Status Of Households That Used Prepaid
Cards In The Last 30 Days
Unbanked
33.2
Table 5.1 Prepaid Debit Card Use by Selected
Household Characteristics, 2013
For all households, row percent
Household Characteristics
Banked,
Underbanked
Status
Unknown
0.4
Underbanked
33.4
Characteristics of Households That Used Prepaid
Cards
Use of prepaid cards differed across households with
different characteristics.3 Younger households were
more likely to use prepaid cards than older households. For example, 12.7 percent of households age
24 or younger had used prepaid cards compared with
3.0 percent of households age 65 or older. Other
household types that were more likely to use prepaid
cards include unmarried female-headed households
(13.1 percent), the unemployed (14.8 percent), and
non-home owners (11.6 percent).
Table 5.1 Prepaid Debit Card Use by Selected
Household Characteristics, 2013
7.9
Other non-Black non-Hispanic
0.0
Nativity
U.S.-born
8.3
Foreign born citizen
4.0
Foreign born non citizen
6.8
15 to 24 years
12.7
25 to 34 years
10.9
35 to 44 years
10.3
45 to 54 years
9.1
55 to 64 years
6.4
65 years or more
3.0
Disability Status
Disabled
12.4
Not Disabled
8.7
Not Applicable
4.7
Education
No high school degree
8.9
High school degree
8.1
Some college
8.8
College degree
6.7
Unemployed
Not in labor force
8.4
14.8
6.2
Family Income
7.1
Less than $15,000
11.4
Unmarried female-headed family
13.1
Between $15,000 and $30,000
Unmarried male-headed family
10.2
Between $30,000 and $50,000
8.3
Female individual
6.3
Between $50,000 and $75,000
6.4
Male individual
7.2
At Least $75,000
6.5
Other
7.2
8.3
Homeownership
Homeowner
Race/Ethnicity
5.9
11.5
Non-homeowner
Hispanic
7.8
Geographic Region
Asian
4.5
Northeast
6.6
14.7
Midwest
8.9
South
8.4
West
7.1
Black
American Indian/Alaskan
All reported differences are statistically significant in a multivariate
regression model in which banking status was also included as an explanatory variable.
3
7.3
Employed
Used prepaid card in the last
12 months
Household Type
Married couple
9.8
White non-Black non-Hispanic
Employment Status
For all households, row percent
All
Hawaiian/Pacific Islander
Age Group
Fully
Banked
33.0
Household Characteristics
Used prepaid card in the last
12 months
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
11.6
31
Figure 5.5 Share Of All Households That Used Prepaid Cards In The Last 12 Months
WA
ND
MT
OR
MN
ME
WI
SD
ID
MI
WY
IA
NE
IL
NV
UT
CO
KS
PA
OH
IN
NJ
MD
DC DE
VA
WV
MO
KY
CA
OK
AZ
NM
TN
VT
NH
NY
MA
CTRI
NC
AR
[3.5 to 6.5)
[6.5 to 7.6)
[7.6 to 8.5)
[8.5 to 9.6)
[9.6 to 14.9]
SC
MS
TX
AL
GA
LA
AK
FL
HI
Prepaid card use varied somewhat among the four
regions of the U.S., with a high of 8.9 percent of all
households in the Midwest and a low of 6.6 percent
in the Northeast. Prepaid card use also varied considerably by state. Hawaii had the lowest share of households (3.5 percent) that had used prepaid cards. The
two states with the highest share of households that
had used prepaid card were Mississippi (14.9 percent)
and Oklahoma (12.9 percent).
Prepaid Card Use among Unbanked Households
As previously noted, unbanked households were
significantly more likely than banked households –
both underbanked and fully banked -- to have used
prepaid cards. Even among unbanked households,
there were some groups who were more likely to have
used prepaid cards, such as households with some
college (30.0 percent) and those with incomes
between $30,000 and $50,000 per year (28.3 percent).
In addition, previously banked households (33.0
percent) were almost two and a half times more likely
than households that had never been banked (13.4
percent) to have used prepaid cards.
West had the lowest rate (17.9 percent). There was
greater variation in prepaid card usage among
unbanked households than among all households
across different states. In three states, half or more of
the unbanked households had used prepaid cards:
Oregon (56.7 percent), Iowa (53.4 percent) and
Minnesota (50.0 percent). And in three states, less
than one in ten unbanked households had used
prepaid cards: Arizona (9.4 percent), North Dakota
(5.2 percent) and Montana (3.6 percent).
Reasons for Using Prepaid Cards
The vast majority of unbanked households that used
prepaid cards appeared to use them to meet their
financial transaction needs: the two overwhelmingly
reported main reasons for using prepaid cards, cited
by almost 8 in 10 (79.4 percent) of these households,
were “to pay for every day purchases or bills” and “to
receive payments”. The third most frequently
reported main reason for using a prepaid card was
“to put money in a safe place”, which was cited by 6.6
percent of unbanked households that used prepaid
cards.
The Midwest had the highest rate of prepaid card use
among unbanked households (26.7 percent) and the
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
32
Table 5.2 Prepaid Debit Card Use by Selected
Household Characteristics, 2013
Table 5.2 Prepaid Debit Card Use by Selected
Household Characteristics, 2013
For all unbanked households, row percent
For all unbanked households, row percent
Household Characteristics
All
Used prepaid cards in the
last 12 months
Household Characteristics
22.3
Household Type
Used prepaid cards in the
last 12 months
Between $15,000 and $30,000
23.3
Between $30,000 and $50,000
28.3
Between $50,000 and $75,000
19.8
At Least $75,000
13.7
Married couple
20.6
Unmarried female-headed family
28.4
Unmarried male-headed family
18.7
Homeownership
Female individual
20.2
Homeowner
16.1
Male individual
18.7
Non-homeowner
24.0
Other
13.4
Geographic Region
Northeast
19.3
25.0
Midwest
26.7
12.2
South
23.6
2.1
West
17.9
Race/Ethnicity
Black
Hispanic
Asian
American Indian/Alaskan
28.4
Hawaiian/Pacific Islander
33.2
White non-Black non-Hispanic
28.2
Other non-Black non-Hispanic
0.0
Nativity
U.S.-born
26.6
Foreign born citizen
6.0
Foreign born non citizen
9.1
Age Group
15 to 24 years
21.1
25 to 34 years
25.7
35 to 44 years
24.9
45 to 54 years
25.0
55 to 64 years
18.7
65 years or more
8.9
Disability Status
Disabled
27.9
Not Disabled
22.8
Not applicable
15.0
Education
No high school degree
18.4
High school degree
22.4
Some college
30.0
College degree
17.3
Employment Status
Employed
23.2
Unemployed
27.5
Not in labor force
19.8
Family Income
Less than $15,000
20.9
While a majority (53.3 percent) of underbanked
households that used prepaid cards also appeared to
use them mainly to conduct financial transactions,
there was more variation in the main reason that
these households used prepaid cards. For example
12.3 percent reported using prepaid cards to send or
give money.
Less than 2 in 5 (37.6 percent) fully banked households that used prepaid cards reported that the main
reason they used prepaid cards was “to pay for every
day purchases or bills” or “to receive payments”,
although that share was still high for households that
had existing relationships with mainstream financial
institutions. Almost one-third of fully banked households (31.5 percent) that use prepaid cards reported
some other reason than the ones listed and about one
in five of these households (20.7 percent) used
prepaid cards to send or give money.
Use of Prepaid Cards and Alternative Financial
Services
Households that used prepaid cards, whether banked
or unbanked, were also more likely to have used an
Alternative Financial Service (AFS) in the last 12
months compared to households that did not use
prepaid cards.
Among unbanked households, those that used
prepaid cards in the last 12 months were more likely
(76.1 percent) to have also used a transaction AFS
(check cashing, money orders and remittances) from
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
33
Figure 5.6 Share Of Unbanked Households That Used Prepaid Cards In The Last 12 Months
WA
ND
MT
OR
MN
ME
WI
SD
ID
MI
WY
IA
NE
IL
NV
UT
CO
NY
KS
OH
IN
MO
KY
CA
NJ
MD
WV DC DE
VA
TN
OK
AZ
PA
[3.6 to 16.2)
[16.2 to 21.9)
[21.9 to 25.3)
[25.3 to 31.0)
NC
AR
NM
VT
NH
MA
CTRI
[31.0 to 56.7]
SC
MS
TX
AL
GA
LA
AK
FL
HI
Figure 5.7 Main Reason Unbanked Households Used Prepaid Cards In The Last 12 Months
To pay for everyday purchases or pay bills
47.6
To receive payments
31.8
To put money in a safe place
6.6
To control spending
5.8
To send or give money
1.4
To save money for the future
1.2
Other reason
5.2
Unknown
0.5
0
10
20
30
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
40
50
60
34
Figure 5.8 Main Reason Underbanked Households Used Prepaid Cards In The Last 12 Months
To pay for everyday purchases or pay bills
39.0
To receive payments
14.3
To send or give money
12.3
To control spending
8.3
To put money in a safe place
5.0
To save money for the future
2.0
Other reason
17.9
Unknown
1.1
0
10
20
30
40
50
60
Figure 5.9 Main Reason Fully Banked Households Used Prepaid Cards In The Last 12 Months
28.9
To pay for everyday purchases or pay bills
20.7
To send or give money
8.7
To receive payments
5.4
To control spending
3.2
To put money in a safe place
0.8
To save money for the future
31.5
Other reason
0.8
Unknown
0
10
20
30
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
40
50
60
35
a non-bank in the last 12 months compared to households that did not use prepaid cards in the last 12
months (65.5 percent). Similarly, among unbanked
households, almost one third (32.1 percent) of those
that used prepaid cards in the last 12 months also
used a credit AFS product in the last 12 months
compared to 20.7 percent of those that had not used
prepaid cards in the last 12 months.
The high rate of transaction AFS use among
unbanked households that used prepaid cards
suggests that these households had a variety of different financial transaction needs that they met using a
combination of prepaid cards and AFS.
Sources of Prepaid Cards
Prepaid cards issued by banks could offer opportunities for prepaid card users to develop or sustain relationships with banks. In 2013, however, most
households that used prepaid cards obtained those
cards from entities other than banks. Nearly a third
(31.5 percent) of households that used prepaid cards
obtained them from large retail or department stores.
Another 18.7 percent obtain them from grocery,
liquor, convenience or drug stores. An additional
17.8 percent received their prepaid cards from someone else, and only 10.7 percent obtained their prepaid
cards from a bank branch. About four percent
obtained them on-line.
Not surprisingly, the share of households that
obtained their prepaid cards from a bank branch
differed by banking status. Among households that
used prepaid cards, 15.4 percent of fully banked
households obtain their prepaid cards from a bank
branch compared with 8.7 percent of underbanked
households and 4.2 percent of unbanked households.
Among unbanked households that used prepaid
cards, regardless of whether the household never had
a bank account or held an account in the past year,
approximately 4 to 5 percent obtained their prepaid
cards from a bank branch. And those unbanked
households that reported that they were very likely to
open a bank account in the near future were no more
likely to obtain a prepaid card from a bank than those
that reported being very unlikely to open a bank
account in the near future.
Overall, regardless of banking status, retail or department stores were the most frequent places from
which households acquired the card: 34.2 percent of
unbanked, 36.7 percent of underbanked, and 26.5
percent of fully banked households that used prepaid
cards obtained them from these locations.
Figure 5.10 AFS Use in Last 12 Months By Banking Status and Prepaid Card Use in Last 12 Months
80
76.1
65.5
60
Transaction AFS
Credit AFS
40
36.9
32.1
30.1
20.7
20
16.1
12.2
0
Unbanked Used Prepaid
Unbanked Did Not Use Prepaid
Banked Used Prepaid
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
Banked Did Not Use Prepaid
36
Figure 5.11 Sources of Prepaid Cards Of Unbanked Households
34.2
Large retail or department store
17.7
Grocery, liquor, convenience, or drug store
13.3
Provided by someone else
9.6
Stand alone non−bank financial services store
5.3
Internet/Online
4.2
A bank branch
1.8
Over the telephone
13.9
Unknown
0
For unbanked and underbanked households that
used prepaid cards, the second most common location for acquiring a prepaid card were grocery, liquor
and convenience stores, which were used by 17.7
percent of unbanked and 20.2 percent of underbanked households. For fully banked households
that used prepaid cards, the second most common
source of the card was “provided by someone else”
(22.1 percent).
Households that used prepaid cards differed by banking status in their propensity to obtain cards from
stand-alone non-bank financial services stores:
unbanked households were the most likely (9.6
percent), underbanked households were less likely
(4.5 percent) and fully banked households were the
least likely (1.1 percent) to obtain their cards from
stand-alone non-bank financial services stores.
Reloading Prepaid Cards
Reloading of a prepaid card may indicate that the
household is a more active user of prepaid cards than
10
20
30
40
households that did not reload their cards. Unbanked
households that used prepaid cards were more likely
(57.8 percent) to have reloaded their cards at least
once in the last 12 months compared to underbanked
(42.9 percent) or fully banked (23.4 percent) households that used prepaid cards.
Regardless of banking status, the most frequently
used channel for reloading prepaid cards was retail
clerk. Among households that reloaded their prepaid
cards in the last 12 months, more than half (58.1
percent) of unbanked households, more than half
(58.4 percent) of underbanked households and
almost 1 in 3 (31.5 percent) fully banked households
reloaded their cards using retail clerks.
The second most frequently used channel for reloading prepaid cards differed for fully banked and
underbanked households compared with unbanked
households. Among fully banked and underbanked
households, the second most frequently used channel
was bank tellers, used by 26.6 percent of fully banked
households and 15.0 percent of underbanked households that reloaded their prepaid cards. Only 3.3
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
37
Figure 5.12 Sources Of Prepaid Cards Of Underbanked Households
36.7
Large retail or department store
20.2
Grocery, liquor, convenience, or drug store
15.0
Provided by someone else
8.7
A bank branch
5.4
Internet/Online
4.5
Stand alone non−bank financial services store
0.4
Over the telephone
9.2
Unknown
0
10
20
30
40
Figure 5.13 Sources Of Prepaid Cards Of Fully Banked Households
26.5
Large retail or department store
22.1
Provided by someone else
18.1
Grocery, liquor, convenience, or drug store
15.4
A bank branch
2.9
Internet/Online
1.1
Stand alone non−bank financial services store
0.3
Over the telephone
13.5
Unknown
0
10
20
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
30
40
38
percent of unbanked households that reloaded their
prepaid cards used tellers to do so.
that had not used prepaid cards were previously
banked.
For unbanked households that reloaded their prepaid
cards, the second most frequently used channel was
direct deposit, used by 27.7 percent of these households. Direct deposit was used by 12.9 percent of
underbanked households and 12.5 percent of fully
banked households that had reloaded their prepaid
cards.
Almost half (46.5 percent) of unbanked households
that used prepaid cards reported being “very likely”
or “somewhat likely” to open a bank account in the
future, compared with 32.6 percent of unbanked
households that had not used prepaid cards.
Banking History and Future Banking Plans of
Unbanked Households that Used Prepaid Cards
Unbanked households that used prepaid cards were
more likely to have once had a bank account and to
want a bank account in the future compared with
unbanked households that had not used prepaid
cards. And previously banked households were more
likely to have used prepaid cards than never banked
households.
Among all unbanked households that used prepaid
cards, 68.0 percent once had a bank account. In
comparison, 38.5 percent of unbanked households
Reasons that Unbanked Households that Used
Prepaid Cards Did Not Have an Account
The relative ranking of main reasons and reasons for
not having an account reported by unbanked households that used prepaid cards were very similar to the
reasons reported by unbanked households that did
not use prepaid cards.
Almost 3 in 5 unbanked households, regardless of
whether they used prepaid cards, reported not having
enough money as one reason that they did not have a
bank account: 59.5 percent of unbanked households
that used prepaid cards and 59.7 percent of unbanked
households that did not use prepaid cards selected
this reason. And 32.0 percent of unbanked house-
Figure 5.14 Share of Prepaid Card Users That Reloaded Their Cards in the Last 12 Months By Banking Status
100
80
0.3
1.0
0.8
41.9
56.1
75.8
60
Unknown
Card Was Not Reloaded
Card Was Reloaded
40
20
57.8
42.9
23.4
0
Unbanked
Underbanked
Fully Banked
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
39
holds that used prepaid cards reported this to be the
main reason they did not have an account, compared
with 38.9 percent of unbanked households that did
not use prepaid cards.
The second most frequently reported reason, cited by
43.6 percent of unbanked households that used
prepaid cards and by 32.8 percent of unbanked
households that did not use prepaid cards, was not
liking to deal with or not trusting banks. This was
also the second most frequently cited main reason,
reported by 18.0 percent of unbanked households
that used prepaid cards and 14.7 percent of unbanked
households that did not use prepaid cards.
Account fees being too high or unpredictable was
reported by 40.1 percent of unbanked households
that used prepaid cards as one reason they did not
have an account, compared with 29.3 percent of
unbanked households that did not use prepaid cards
that cited this reason. This was also the third most
frequently cited main reason, reported by 16.9
percent of unbanked households that used prepaid
cards and 12.7 percent of unbanked households that
did not use prepaid cards.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
40
6. Alternative Financial Services
In the 2013 survey, questions on household use of
AFS were revised, new questions were added, and
some questions were dropped. Some of the new questions asked about household use of auto title loans, a
form of short-term credit secured by a vehicle owned
by the borrower and typically obtained by lower-income households. This change was implemented in
response to feedback from external stakeholders and
an understanding that auto title loans were used as
frequently as other AFS credit products that had been
included in previous surveys. In addition, new questions asked households that used transaction AFS
where they obtained that AFS (such as the supermarket or a standalone AFS provider). Households were
not asked why they used AFS providers instead of
banks because this question was asked in 2009 and
12 months, and 12.0 percent of all households had
used an AFS within the last 30 days.1
These results are consistent with previous survey
results; however, they are not directly comparable
because the types of AFS that were asked about differ
across all three surveys. In 2011, 42.9 percent of
households had ever used an AFS, and 25.4 percent
of households had used one or more AFS in the last
year, including 12.0 percent who had used an alternative financial service within the last 30 days.2
Transaction AFS continued to be more widely used
than credit AFS.3 In 2013, 21.9 percent of all households had used one or more transaction AFS in the
Figure 6.1 Recency Of Household AFS Use, 2013
Unknown
5.4
Used in the last
12 months
24.9
30
25
20
15
Last 2 12 months
12.9
10
5
Last 30
days
12.0
0
Used over a year ago
14.4
Never used
55.3
2011, and the answers were consistent across the two
years. In addition, households were no longer asked
how many times they used transaction AFS in the last
30 days.
In 2013, 39.3 percent of all U.S. households had ever
used one or more of the following types of AFS:
non-bank money orders, non-bank check cashing
and non-bank remittances, payday loans, pawn shop,
refund anticipation loans, rent-to-own services, and
auto title loans. About one in four households (24.9
percent) used at least one of the AFS in the previous
“Within the last 30 days” refers to whether the respondent had used
one or more of the AFS products within 30 days of the survey month, June
2013. Such measures of “recent use” may be affected by seasonality of
AFS use.
2
The 2011 list of AFS did not include auto title loans, which are included
in the 2013 list of AFS. Removing auto title loans to make the list of AFS
comparable between 2011 and 2013, the proportion of households in 2013
that had used any AFS in the last 12 months would have been 24.7
percent, and 11.9 percent of all households would have used an AFS in
the last 30 days.
3
The transaction AFS included in the 2013 survey are non-bank money
orders, non-bank check cashing, and non-bank remittances. The AFS
credit products are payday loans, pawn shops, refund anticipation loans,
rent-to-own services, and auto title loans.
1
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
41
last year, and 7.0 percent had used one or more AFS
credit products in that time.4
Appendix Table D-1 AFS Use In Last 12 Months By Banking Status And Household Characteristics, 2013
For all households, row percent
Number of Households
(1000s)
Percent of Households
123,750
100
24.9
69.3
5.8
9,582
100
63.2
29.9
7.0
114,168
100
21.7
72.6
5.7
Married couple
59,102
100
20.1
74.7
5.2
Unmarried female-headed family
15,802
100
41.3
52.9
5.9
Characteristics
All
Has Used (Percent)
Has Not Used (Percent)
Unknown (Percent)
Unbanked
Unbanked
Has bank account
Household Type
Unmarried male-headed family
6,327
100
37.5
57.3
5.2
Female individual
22,150
100
21.2
72.0
6.8
Male individual
20,240
100
26.2
67.1
6.7
128
100
31.7
60.8
7.6
Black
16,801
100
46.1
45.8
8.1
Hispanic
14,948
100
40.3
53.6
6.1
Asian
5,882
100
18.7
74.5
6.8
American Indian/Alaskan
1,464
100
38.6
56.5
5.0
Hawaiian/Pacific Islander
314
100
27.2
67.6
5.2
White non-Black non-Hispanic
84,310
100
18.1
76.6
5.3
Other non-Black non-Hispanic
NA
NA
NA
NA
NA
121,097
100
24.4
69.8
5.8
2,654
100
46.3
48.2
5.5
Other
Race/Ethnicity
Spanish only language spoken
Spanish is not the only language spoken
Spanish is only language spoken
Nativity
U.S.-born
106,397
100
23.4
71.0
5.6
Foreign born citizen
9,252
100
26.9
65.9
7.1
Foreign born non citizen
8,102
100
42.8
50.3
6.9
15 to 24 years
6,244
100
41.5
53.5
5.0
25 to 34 years
20,464
100
33.6
61.2
5.2
35 to 44 years
21,408
100
29.6
65.0
5.4
45 to 54 years
24,551
100
26.7
67.6
5.7
55 to 64 years
22,710
100
20.9
73.6
5.4
65 years or more
28,372
100
13.1
79.8
7.1
Disabled
10,841
100
38.7
55.3
6.0
Not Disabled
78,293
100
26.0
68.7
5.4
Not Applicable
34,616
100
18.2
75.1
6.7
Age Group
Disability Status
In comparison, in 2011, 23.3 percent of households had used one or
more transaction AFS in the last 12 months. Considering only the types of
credit AFS included in the 2011 survey, which did not include auto title
loans, the proportion of households that had used a credit AFS in the last
12 months was 6.6 percent in 2013 compared with 6.0 percent in 2011.
4
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
42
Appendix Table D-1 AFS Use In Last 12 Months By Banking Status And Household Characteristics, 2013
For all households, row percent
Number of Households
(1000s)
Percent of Households
No high school degree
13,871
100
39.5
54.4
6.2
High school degree
33,684
100
28.7
65.0
6.3
Some college
36,007
100
26.9
67.5
5.6
College degree
40,188
100
14.9
79.6
5.5
75,587
100
25.6
69.1
5.3
Characteristics
Has Used (Percent)
Has Not Used (Percent)
Unknown (Percent)
Education
Employment Status
Employed
Unemployed
5,436
100
41.0
54.2
4.8
42,727
100
21.6
71.7
6.8
Less than $15,000
19,044
100
39.1
54.5
6.4
Between $15,000 and $30,000
21,763
100
33.1
60.5
6.4
Between $30,000 and $50,000
24,496
100
26.5
67.2
6.3
Between $50,000 and $75,000
22,552
100
20.9
73.6
5.4
At Least $75,000
35,895
100
13.8
81.2
5.0
Homeowner
80,136
100
17.0
77.5
5.5
Non-homeowner
43,614
100
39.4
54.2
6.4
Northeast
22,199
100
23.6
70.4
6.0
Midwest
27,315
100
21.0
73.2
5.8
South
46,738
100
29.3
64.9
5.8
West
27,498
100
22.3
71.9
5.7
Metropolitan area - Principal City
34,510
100
29.6
64.1
6.3
Metropolitan area - Balance
51,229
100
21.2
72.7
6.0
Not in Metropolitan area
19,325
100
26.3
68.6
5.1
Not Identified
18,686
100
24.8
70.1
5.1
Not in labor force
Family Income
Homeownership
Geographic Region
Metropolitan Status
NA= Not available because the sample size was too small to produce a precise estimate.
-= For this table cell, the estimated proportion would round to zero. The population proportion, however, is likely to be slightly greater than zero.
Figures do not always reconcile to totals because of rounding.
Many households that used AFS used more than one
type of product or service. Among all households, 8.0
percent used two or more types of AFS in the last
year. Among AFS users, almost one-third (32.0
percent) used multiple products in the last year.
For the remainder of this section, we focus on the
AFS included in the 2013 survey. We refer to households that have used AFS in the last 12 months as
“AFS users.” AFS usage in the last 12 months is
referred to as “AFS use,” while usage in the last 30
days is referred to as “recent AFS use.”
AFS Use by Household Characteristics and Banking
Status
The patterns of AFS use among households with
different socioeconomic and demographic characteristics and with different banking statuses were very
similar to results from previous surveys. AFS use was
higher among younger, less educated, lower-income,
and working-age disabled households. In addition, a
higher proportion of unmarried female-headed
family households and non-Asian minority households used AFS.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
43
Figure 6.2 Household Use Of Transaction And Credit AFS In The Last 12 Months
70
60.5
60
50
40
Transaction AFS
Credit AFS
30
16.7
20
18.6
10
6.2
0
Unbanked
Banked
Figure 6.3 Household Use Of Transaction And Credit AFS In The Last 30 Days
70
60
50
45.2
40
Transaction AFS
Credit AFS
30
20
7.8
10
5.4
2.0
0
Unbanked
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
Banked
44
The rate of AFS use among unbanked households
was high: almost two-thirds (63.2 percent) of them
used an AFS. More than 1 in 5 (21.7 percent) households with bank accounts also used AFS. Both banked
and unbanked households made more use of transaction AFS than credit.
Unbanked households were also more likely than
banked households to have recently used an AFS.
Almost half of unbanked households (47.0 percent)
had recently used an AFS, compared with 9.1 percent
of banked households. Notably, a much higher
proportion of banked households that opened their
account within the last year used AFS in the recent
past (31.7 percent) compared to households that had
been banked for more than a year (8.9 percent).
42.0 percent of underbanked households. And more
than half (54.0 percent) of unbanked households that
used AFS used multiple AFS products compared with
about one in four (26.6 percent) underbanked
households.
Figure 6.5 Count Of AFS Types For Households That Used AFS
In The Last 12 Months
Used 1 AFS
43.1
Unknown
2.9
Figure 6.4 Use of AFS In Last 30 Days By Households That
Used AFS In The Last 12 Months
Used 2 AFS
34.6
80
Used 3 or more AFS
19.4
74.4
Unbanked
Used 1 AFS
71.3
60
42.0
Unknown
2.1
40
Used 3 or more AFS
7.8
20
Underbanked
Used 2 AFS
18.8
Use of Transaction AFS Products
0
Unbanked
Underbanked
Among households that used an AFS, unbanked
households were more likely to have used an AFS
recently and to have used more than one AFS product compared to underbanked households.5 This
suggests that unbanked households that used an AFS
may have been more active users of AFS than underbanked households. Specifically, 74.4 percent of
unbanked households that used AFS in the last 12
months also recently used an AFS compared with
Underbanked households are defined as households with bank
accounts that also used at least one AFS in the last 12 months.
5
Consistent with findings from the previous surveys,
money orders were the most commonly used AFS,
which were used by 17.3 percent of all households.
The other transaction AFS were used by smaller
proportions of households: 6.5 percent of all households used non-bank check cashing, and 3.7 percent
used remittances.
Unbanked households appeared to be active users of
transaction AFS, especially of money orders and
check cashing. For example, 60.5 percent of
unbanked households had used a transaction AFS
and 45.2 percent had done so recently. Among
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
45
Figure 6.6 Use Of Specific AFS By Unbanked Households That Used AFS In The Last 12 Months
75.0
Money Orders
52.6
56.8
Check Cashing
38.5
14.5
Remittances
7.8
15.6
Pawn Shop
4.7
4.3
Payday Loans
1.3
6.0
Refund Anticipation Loans
7.1
Rent-To-Own
3.2
2.7
0.8
Auto Title Loans
Used in Last 12 Months
Used in Last 30 Days
0
20
40
60
80
100
Figure 6.7 Use Of Specific AFS By Underbanked Households That Used AFS In The Last 12 Months
68.0
Money Orders
26.3
18.8
Check Cashing
7.7
14.9
Remittances
6.2
10.6
Pawn Shop
2.3
8.8
Payday Loans
3.7
7.4
Refund Anticipation Loans
5.7
Rent-To-Own
2.7
3.6
Auto Title Loans
Used in Last 12 Months
Used in Last 30 Days
1.3
0
20
40
60
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
80
100
46
unbanked households that had used an AFS (either
transaction or credit), more than 3 out of 4 (75.0
percent) had obtained a non-bank money order and
more than half (52.6 percent) had done so recently.
Also, among unbanked households that had used an
AFS, more than half (56.8 percent) had cashed a
check at a non-bank location and more than 1 in 3
(38.5 percent) had done so in the last 30 days. The
high proportions of unbanked households that used
non-bank check cashing and non-bank money orders
in the last 12 months and in the last 30 days suggests
that some unbanked households were using these
transaction AFS products as substitutes for the transactions functions provided by a checking account.
Underbanked households also frequently used
non-bank money orders (68.0 percent) although only
about 1 in 4 (26.3 percent) did so recently. Even
fewer underbanked households used non-bank check
cashing (18.8 percent) and fewer than 1 in 10 (7.7
percent) did so recently.
Use of Credit AFS Products
AFS credit products were less commonly used than
transaction AFS, consistent with previous survey
findings: 7.0 percent of all households used at least
one type of AFS credit product. Auto title loans,
which were asked about for the first time in 2013,
were used by less than 1 percent (0.9 percent) of
households in the last year. The results for other AFS
credit products were consistent with results from
2011. Two percent of all households used payday
loans, 2.9 percent used pawn shops, 1.5 percent used
rent-to-own stores, and 1.8 percent used refund
anticipation loans.
The relatively low use of credit AFS among both
unbanked and underbanked households may be due
to the nature of the products and the fact that transaction needs are often regular and recurring, while
credit needs, or the opportunities to obtain credit,
may not occur as frequently.
Relatively small shares of unbanked households used
pawn shops (9.9 percent), rent-to-own services (4.5
percent), refund anticipation loans (3.8 percent), and
auto title loans (1.7 percent). Also, only 2.7 percent of
unbanked households used payday loans, which
generally require the borrower to have a bank
account, in the past 12 months.6 Among unbanked
households that used at least one AFS in the last 12
months, use of AFS credit products was somewhat
higher: 15.6 percent used pawn shops, 7.1 percent
used rent-to-own services, 6.0 percent used refund
anticipation loans, 2.7 percent used auto title loans
and 4.3 percent used payday loans in the last 12
months.
Among underbanked households, 10.6 percent used
pawn shops, 8.8 percent used payday loans, 7.4
percent used refund anticipation loans, 5.7 percent
used rent-to-own services, and 3.6 percent used auto
title loans.
Locations From Which Households Obtained AFS
Products
The 2013 results provide new insights about where
households obtained the AFS that they used. Grocery,
liquor, convenience and drug stores were the most
common locations from which households obtained
transaction AFS, although relatively large proportions
also obtained these services at large retail/department
stores (such as Walmart or Kmart). Specifically, 37.8
percent of households that used non-bank check
cashing did so at a grocery, liquor, convenience or
drugstore, while 31.4 percent used a large retail or
department store and 24.3 percent cashed checks at a
stand-alone non-bank financial services provider.
Grocery, liquor, convenience and drug stores were
also the most common non-bank locations from
which households purchased money orders: 37.8
percent of households that used non-bank money
orders bought them at such stores. Another 29.7
percent purchased their money orders from the post
office.
Almost one-third (32.9 percent) of households that
used non-bank remittances most commonly obtained
them from grocery, liquor, convenience and drug
stores, 19.0 percent from retail/department stores,
and 26.3 percent from standalone AFS providers.7
Very small proportions of households that used
non-bank remittances most commonly accessed these
services via a mobile phone (1.2 percent) or online
using a computer (6.9 percent).
Relative to underbanked households, larger proportions of unbanked households that used AFS
obtained their transaction AFS products from standalone AFS providers. Specifically, 29.3 percent of
The proportion of remittance users who responded that they got their
remittances from somewhere other than the choices provided, or did not
know where they were obtained, was relatively high, at 13.7 percent.
7
Among previously banked households, about 3.5 percent reported
receiving a payday loan within the last 12 months.
6
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
47
Figure 6.8 Non-Bank Locations Used By Households To Cash Checks In The Last 12 Months
39.1
Grocery, liquor, convenience, or drug store
36.1
32.3
Large retail or department store
30.2
20.6
Stand alone non−bank financial services store
29.3
8.0
Other/Unknown
4.4
0
Underbanked
Unbanked
20
40
60
80
100
Figure 6.9 Non-Bank Locations Used By Households To Obtain Money Orders In The Last 12 Months
37.7
Grocery, liquor, convenience, or drug store
38.1
18.7
Large retail or department store
21.6
32.4
Post Office
19.6
9.0
Stand alone non−bank financial services store
18.4
2.2
Other/Unknown
Underbanked
Unbanked
2.3
0
20
40
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
60
80
100
48
Figure 6.10 Non-Bank Locations Used By Households To Send Remittances In The Last 12 Months
31.7
Grocery, liquor, convenience, or drug store
37.9
23.9
Stand alone non−bank financial services store
36.4
19.9
Large retail or department store
15.5
1.3
Mobile Phone
0.6
8.5
Online through Computer
0.5
14.8
Other/Unknown
Underbanked
Unbanked
9.1
0
20
unbanked households that used non-bank check
cashing most commonly went to standalone AFS
providers, compared to 20.6 percent of underbanked
check cashing users. In addition, 36.4 percent of
unbanked households that used non-bank remittances did so most commonly at a standalone AFS
store, compared to 23.9 percent of underbanked
remittance users. The shares of unbanked and underbanked households that used non-bank money orders
who most commonly obtained money orders at a
standalone AFS store were 18.4 percent and 9.0
percent, respectively.
40
60
80
100
The survey did not ask detailed questions about locations from which households obtained most of the
credit AFS that they used. However, the survey did
question households that had used payday loans
about their use of online lending, and found that 15.5
percent of households that used payday loans most
commonly obtained them online.
Underbanked users were more likely to use other
locations to obtain AFS. For instance, almost one
third (32.4 percent) of underbanked money order
users most commonly obtained their money orders
from the post office, compared to 19.6 percent of
unbanked households that used money orders. Also,
almost 10 percent (9.8 percent) of underbanked
remittance users used non-bank remittance services
online or over their mobile phone most commonly,
but only 1.1 percent of unbanked remittance users
did so.
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
49
7. Access to Mobile Phones and the Internet
During the past few years, financial institutions,
non-bank prepaid card issuers, and AFS providers
have placed more emphasis on interacting with
customers through the Internet and mobile phones,
especially smartphones. Customers must have access
to the Internet and to mobile phones to take advantage of these new communication channels. Therefore, the 2013 survey included new questions about
household access to mobile phones and the Internet.
Access to Mobile Phones and Smartphones
Table 7.1 Access To Mobile Phones And
Smartphones By Banking Status
For all households, column percent
Characteristics
All
Unbanked
Banked:
Underbanked
Banked:
Fully
Banked
Banked:
Underbanked
Status
Unknown
Number of
Households
(1000s)
123,750
9,582
24,757
82,892
6,519
Percent of
Households
100
100
100
100
100
Has mobile
phone
82.7
68.1
90.5
86.8
22.0
Does not
have
mobile
phone
12.4
25.5
8.5
12.7
3.9
Unknown
4.9
6.4
1.0
0.5
74.2
Smartphone
55.7
33.1
64.5
59.0
13.6
Non-Smartphone
26.5
34.4
25.5
27.5
6.1
No mobile
phone
12.4
25.5
8.5
12.7
3.9
Unknown
5.4
6.9
1.5
0.9
76.5
Mobile Phone
(Percent)
Smartphone
(Percent)
The vast majority of households (82.7 percent) had
access to a mobile phone, of which two thirds (67.3
percent of all mobile phones or 55.7 percent overall)
were smartphones.1 Relative to fully banked households, underbanked households were somewhat more
likely to have access to a mobile phone (90.5 percent
vs. 86.8 percent) or smartphone (64.5 percent vs. 59.0
The 2013 survey asked households whether they owned or had regular
access to a mobile phone. Ownership or regular access to a mobile phone
is measured at the household level. The householder might or might not
have been a mobile phone user even if the household reported owning or
having regular access to a mobile phone. For the purposes of this analysis, the term mobile phone user refers to a household that owned or had
regular access to a mobile phone.
1
percent). In contrast, unbanked households were
considerably less likely to have access to either a
mobile phone (68.1 percent) or a smartphone (33.1
percent). In particular, households that had never
been banked had the lowest rates of access to both
mobile phones (61.1 percent) and smartphones (26.0
percent).
Access to mobile phones increased with income and
education. For example, about 70 percent (71.9
percent) of households with income below $30,000
had access to a mobile phone, compared to 91.6
percent of households with income of at least
$75,000. Similarly, two-thirds (67.0 percent) of
households without a high school degree had access
to a mobile phone compared to 89.5 percent of
households with a college degree (see Appendix Table
E-2).
The disparity in access by income or education was
even more pronounced in the case of access to smartphones. Close to 35 percent (34.8 percent) of those
with income below $30,000 have access to a smartphone, compared with almost 80 percent (77.7
percent) of those with income above $75,000 (see
Appendix Table E-3).
Access to mobile phones and smartphones also
differed by age. Households age 65 or older had
considerably lower rates of access to mobile phones
(67.3 percent) than their younger counterparts. For
example, mobile phone access rates were 83.5 percent
for households age 55 to 64 and ranged between 86.6
percent and 89.9 percent for households younger
than age 55 (see Appendix Table E-2). The same held
true for access to smartphones. Fewer than 1 in 4
households age 65 and older (23.2 percent) had
access to smartphones compared with 48.7 percent
for households age 55 to 64 and 62.8 percent for
households age 45 to 54. Smartphone access rates for
households younger than age 45 were considerably
higher and ranged from 72.1 percent to 76.5 percent
(see Appendix Table E-3).
Internet Access
Three out of four households (75.7 percent) had
regular access to the Internet, either at home or
outside of the home at locations such as school, work,
or the public library. Internet access among underbanked (81.9 percent) and fully banked households
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
50
Figure 7.1 Access To Mobile Phones And Smartphones By Income
100
91.6
88.3
82.3
77.7
80
74.4
69.2
63.4
60
51.0
Has Mobile Phone
Has Smartphone
37.9
40
31.3
20
0
< $15k
$15k−<$30K
$30k−<$50k
$50k−<$75k
>=$75k
Figure 7.2 Access To Mobile Phones And Smartphones By Education
100
89.5
85.4
78.2
80
70.8
67.0
59.4
60
Has Mobile Phone
Has Smartphone
44.2
40
30.1
20
0
No high school degree
High school degree
Some college
College degree
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
51
Figure 7.3 Access To Mobile Phones And Smartphones By Age
100
89.9
88.9
89.1
86.6
83.5
80
76.5
76.2
72.1
67.3
62.8
60
48.7
Has Mobile Phone
Has Smartphone
40
23.2
20
0
15 to 24 years
25 to 34 years
35 to 44 years
(82.0 percent) were similarly widespread, but
unbanked households were considerably less likely to
have Internet access (43.0 percent).
Table 7.2 Internet Access By Banking Status
For all households, column percent
Banked:
Fully
Banked
Banked:
Underbanked
Status
Unknown
24,757
82,892
6,519
100
100
100
100
75.7
43.0
81.9
82.0
19.8
Does not
have
access
19.3
50.2
17.0
17.5
5.1
Unknown
5.0
6.8
1.1
0.5
75.1
Characteristics
All
Unbanked
Number of
Households
(1000s)
123,750
9,582
Percent of
Households
100
Has access
Banked:
Underbanked
45 to 54 years
55 to 64 years
65 years or more
that had been unbanked for more than 12 months
also had lower rates of Internet access (52.2 percent)
compared with recently unbanked households (66.6
percent).
Relative to Internet access for White non-Black
non-Hispanic households (79.1 percent), significantly
lower proportions of black (65.3 percent) and
Hispanic (66.4 percent) households had Internet
access. Access to the Internet also increased sharply
with income and educational attainment (see Appendix Table E-4).
Internet
Access
(Percent)
Among unbanked households, those that had never
been banked had the lowest rate of Internet access
(33.3 percent). This group also had the lowest rates of
access to mobile phones (61.1 percent) and smartphones (26.0 percent). Previously banked households
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
52
8. Banking Methods
Knowing how households interact with their financial
institutions can help inform discussions about how
best to serve different groups of consumers. This
information can also help illuminate potential effects
of bank decisions such as opening or closing
branches or providing access to different banking
methods (for example, mobile banking) on bringing
households into, and keeping them in, the mainstream financial system.
To better understand how banked households interact with their banks, the 2013 survey asked these
households whether they had used any of the following in the past 12 months: bank tellers, ATMs/kiosks,
telephone banking, online banking, mobile banking,
or another banking method.1 The survey also asked
banked households to identify the most common
method used, which we refer to in this report as the
household’s primary or main banking method.
One percent of banked households reported not
having accessed their accounts in the last 12 months
and another 3.8 percent did not report whether they
had accessed their accounts in the same period. All
estimates reported in this section are for banked
households that reported having accessed their
accounts at least once in the last 12 months (95.2
percent of all banked households).
Most banked households used multiple methods to
access their bank accounts in the last 12 months.
Seven out of ten (71.1 percent) used at least two
methods and almost half (47.9 percent) used three or
more of these methods.
Figure 8.1 Methods Used To Access Bank Accounts In Last 12 Months
78.8
Bank Teller
32.2
69.6
ATM/Kiosk
24.4
55.1
Online Banking
32.9
26.1
Telephone Banking
3.3
23.2
Mobile Banking
5.7
1.0
Other
Method Used
Main Method Used
0.8
0
20
40
60
80
100
Telephone banking was defined as using phone calls or automated
voice or touch tone calls to access a bank account. Online banking was
defined as accessing a bank account using a desktop or laptop computer,
or a tablet such as an iPad. Mobile banking was defined as using text
messages, mobile apps, or using a mobile phone’s Internet browser or
email to access a bank account.
1
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
53
Figure 8.2 All Methods Used To Access Bank Accounts In Last 12 Months By Banking Status
79.2
Bank Teller
78.7
76.4
ATM/Kiosk
67.9
52.6
Online Banking
56.2
32.7
Telephone Banking
24.3
29.2
Mobile Banking
21.7
0.7
Other
Underbanked
Fully−Banked
1.1
0
20
40
60
80
100
Figure 8.3 Primary Method Used To Access Bank Accounts In Last 12 Months By Banking Status
29.5
ATM/Kiosk
23.0
29.0
Bank Teller
33.0
26.6
Online Banking
35.1
9.5
Mobile Banking
4.7
4.6
Telephone Banking
3.0
0.5
Other
Underbanked
Fully−Banked
0.8
0
20
40
60
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
80
100
54
Table 8.1 Main Banking Method By Whether Household Had Internet Access, Mobile Phone Access Or Direct
Deposit
For all banked households that accessed their account in the last 12 months, column percent
All
Has Internet Access
No Internet Access
Has Mobile Phone
Access
No Mobile Phone
Access
Has Direct Deposit
No Direct Deposit
Number of Households
(1000s)
108,295
89,578
19,048
95,811
12,850
91,696
19,071
Percent of Households
100
100
100
100
100
100
100
Bank Teller
32.2
25.8
63.0
28.5
59.8
28.7
48.7
ATM/Kiosk
24.4
24.5
24.2
24.8
22.0
24.5
23.8
Main Banking Method
(Percent)
3.3
3.2
4.1
3.3
3.6
3.5
2.5
Online Banking
Telephone Banking
32.9
38.9
4.7
35.9
11.2
35.8
19.3
Mobile Banking
5.7
6.7
1.3
6.5
0.4
6.0
4.6
Other
0.8
0.5
2.4
0.5
2.7
0.8
0.5
Unknown
0.7
0.6
0.3
0.6
0.3
0.7
0.6
Use of Banking Methods by Banking Status
Among banked households that accessed their
accounts in the last 12 months, the vast majority used
bank tellers (78.8 percent) or ATMs/kiosks (69.6
percent), while more than half used online banking
(55.1 percent) and almost a quarter (23.2 percent)
used mobile banking.2
Bank tellers and online banking were the primary
methods used by the largest share of households.
Equal shares of banked households (almost a third
each) reported using online banking and bank tellers
as their most common banking method in the last 12
months. Almost a quarter of banked households said
they most commonly used ATMs/kiosks and 5.7
percent said they primarily used mobile banking.
Regardless of whether the household was fully
banked or underbanked, bank tellers, ATMs/kiosks,
and online banking were the top three primary methods used, although their order and the relative shares
of households that used each method differed slightly
by banking status. Underbanked households were less
likely to use online banking as their main banking
method (26.6 percent) compared with fully banked
households (35.1 percent). Conversely, underbanked
households were more likely to use mobile banking
as their main banking method (9.5 percent)
compared with fully banked households (4.7 percent).
Primary Banking Method and Direct Deposit, Internet Access and Mobile Phone Access
Higher proportions of households without direct
deposit, Internet access or mobile phone access used
bank tellers as their primary method of accessing
their accounts in the last 12 months. Households
without direct deposit, Internet access or mobile
phone access were also less likely to use online banking as their primary method (see Table 8.1).
Use of Banking Methods by Household
Characteristics
Income and Education
Banked households with lower income or educational
attainment were considerably more likely than higher-income or more educated households to bank
primarily through bank tellers and were less likely to
bank primarily online. While this result is consistent
with the lower rates of Interent access among
lower-income and less educated households, they
were less likely to use online banking and more likely
to use bank tellers even after taking into account their
lower rates of Internet access. For example, households with incomes of less than $30,000 were more
than twice as likely to primarily use bank tellers than
online banking. In contrast, households with incomes
between $50,000 and $75,000 and incomes of at least
$75,000 were much more likely (a third to more than
two times more likely) to mainly use online banking
than bank tellers (see Appendix Table F-2).
Estimates do not reflect the frequency of use, only whether households
used a particular access method at least once in the last 12 months.
2
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
55
Figure 8.4 Use of Bank Tellers, Online Banking And Mobile Banking As Primary Method By Income
60
50
49.4
47.5
44.9
40
36.8
35.7
30
Bank Teller
Online Banking
Mobile Banking
28.3
26.7
20.1
20
17.3
14.5
10
4.0
6.3
5.3
6.4
5.7
0
< $15k
$15k−<$30K
$30k−<$50k
Similarly, less than 10 percent (8.8 percent) of households without a high school degree banked primarily
online, compared to close to half (48.0 percent) of
households with college degrees. Over half (55.6
percent) of the households without a high school
degree and more than two out of five (41.8 percent)
households with a high school degree used bank tellers as their main banking method, relative to one in
five (21.0 percent) households with a college degree
(see Appendix Table F-2).
Age
Differences in banking methods by age were also
quite distinct. Considerably higher proportions of
households age 45 and above most commonly used a
bank teller compared to households under age 45.
For example, more than half of households age 65
and above (54.6 percent) primarily used bank tellers,
compared with 36.1 percent of households age 55 to
64 and 26.7 percent of households age 45 to 54. For
households age 44 and below, the share that primarily
used bank tellers ranged from 17.0 percent to 21.1
percent.
The opposite was true for mobile banking, which was
considerably more prevalent among younger households. While one in five (20.3 percent) households
$50k−<$75k
>=$75k
under age 25 primarily used mobile banking, less
than 10 percent of households age 35 and above did
so.
The use of online banking also decreased with householder age, with the exception of the youngest households (under age 24). These households had the
second lowest rate (27.8 percent) and the oldest
households (age 65 and above) had the lowest rate
(17.8 percent) of using online banking as their
primary banking method. See Appendix Table F-2 for
more detail on differences in banking methods by
age.
Race and Ethnicity
Black (21.4 percent) and Hispanic (23.0 percent)
households were significantly less likely to use online
banking as their primary method for accessing
accounts compared with Non-Black Non-Hispanic
White households (35.8 percent). While this is
consistent with their lower rates of Internet access,
they were less likely to use online banking as their
primary method even after taking into account their
lower rates of Internet access.
Black (31.6 percent) and Hispanic (29.9 percent)
households were also more likely to use ATMs/kiosks
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
56
Figure 8.5 Use Of Bank Tellers, Online Banking And Mobile Banking As Primary Method By Education
60
55.7
50
48.0
41.8
40
32.5
Bank Teller
Online Banking
Mobile Banking
30.2
30
21.0
21.0
20
8.8
10
7.4
6.2
4.3
2.4
0
No high school degree
High school degree
Some college
College degree
Figure 8.6 Use Of Bank Tellers, Online Banking And Mobile Banking As Primary Method by Age
60
54.7
50
42.5
41.5
40
37.7
36.1
31.6
30
27.8
21.1
20
Bank Teller
Online Banking
Mobile Banking
26.7
21.1
20.3
17.8
17.0
13.2
8.9
10
3.7
1.4
0.6
0
15 to 24 years
25 to 34 years
35 to 44 years
45 to 54 years
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
55 to 64 years
65 years or older
57
as their primary method for accessing their accounts,
compared to 22.5 percent of Non-Black Non-Hispanic White households.
Use of A Single Banking Method
As noted previously, 71.1 percent of banked households used more than one banking method to access
their account in the last 12 months. However, three
in ten households (28.8 percent) used only one
method. Among households that used only one
method to access their account, the majority (60.7
percent) used a bank teller, one in five (19.8 percent)
used only an ATM and 13.2 percent used only online
banking.
The use of bank tellers as the only banking channel
was heavily concentrated among certain demographic
groups. Households that exclusively used bank tellers
were more likely to be age 65 and above, had incomes
under $30,000, and were less educated. Households
in rural areas were also considerably more likely to
use tellers as their primary banking method (see
Appendix Table F-3).
Use of Multiple Banking Methods
The number of banking methods used also varied
depending on the household’s primary banking
method. Most households that primarily used bank
tellers to access their accounts used them as the only
banking method (54.2 percent) or along with one
other banking method (25.0 percent). In contrast,
most households that mainly banked online used 2
additional banking methods (median number of
banking methods was 3). Households that primarily
used mobile banking used 3 additional methods
(median number of banking methods used was 4).
Examining the additional banking methods used in
conjunction with the primary method, the survey
shows that ATMs were the most likely secondary
method used by households that primarily banked via
teller (37.2 percent). The majority of households that
primarily banked online or via mobile banking used a
variety of other banking methods (see Table 8.3).
More than three out of four households that primarily used online or mobile banking also used ATMs/
kiosks or bank tellers. Among households that
primarily used online banking, a considerable share
(78.1 percent) used ATMs/kiosks, bank tellers (71.9
percent), and mobile banking (35.0 percent). Only
11.6 percent exclusively used online banking. Among
households that used mobile banking as their primary
method, 84.6 percent used ATMs/kiosks, 79.5 percent
banked online, and 71.1 percent used bank tellers.
Only 7.5 percent exclusively used mobile banking.
These results suggest that online and mobile banking
are still a complement to more traditional banking
methods.
Results were generally similar regardless of banking
status: underbanked households were slightly more
likely to use additional methods than fully banked
households. The number of banking methods used
increased sharply with income and educational
attainment.3 Results by age indicated a stark contrast
between households age 65 or older relative to
younger households. Almost half (47.7 percent) of
the households age 65 and older exclusively used one
banking method, a markedly higher proportion than
Table 8.2 Number Of Banking Methods Used By Primary Method
For all banked households that accessed their account in the last 12 months, column percent
Bank Teller
ATM/Kiosk
Telephone
Banking
108,295
34,897
26,398
3,591
35,600
6,192
846
773
100
100
100
100
100
100
100
100
1 Method
28.8
54.2
23.4
22.9
11.6
7.5
81.5
-
2 Methods
23.2
25.0
34.9
17.9
16.1
7.8
9.7
39.6
3 Methods
22.5
12.7
22.9
28.3
32.6
18.0
2.6
25.4
4 to 6 Methods
All
Number of Households (1000s)
Percent of Households
Online
Banking
Mobile
Banking
Other
Unknown
Number of Banking Methods Used (Percent)
25.4
8.2
18.8
30.9
39.7
66.7
6.1
35.0
Mean
2.5
1.8
2.4
2.8
3.1
3.7
1.4
3.0
Median
2.0
1.0
2.0
3.0
3.0
4.0
1.0
3.0
-= For this table cell, the estimated proportion would round to zero. The population proportion, however, is likely to be slightly greater than zero.
Even when controlling for the primary method of use, income and
education appear to have an effect on the number of banking methods
households used to access their bank account.
3
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
58
Table 8.3 All Banking Methods Used By Main Banking Method
For all banked households that accessed their account in the last 12 months, column percent
All
Telephone
Banking
Online
Banking
Mobile
Banking
Bank Teller
ATM/Kiosk
108,295
34,897
26,398
3,591
35,600
6,192
846
773
100
100
100
100
100
100
100
100
Yes
78.8
100.0
65.7
64.4
71.9
71.1
13.2
87.8
No
21.2
-
34.3
35.6
28.1
28.9
86.8
12.2
Yes
69.6
37.2
100.0
61.1
78.1
84.6
9.7
90.1
No
30.4
62.8
-
38.9
21.9
15.4
90.3
9.9
Number of Households (1000s)
Percent of Households
Other
Unknown
All Methods
Bank Teller (Percent)
ATM/Kiosk (Percent)
Telephone Banking (Percent)
Yes
26.1
14.5
24.0
100.0
29.6
38.7
6.8
37.8
No
73.9
85.5
76.0
-
70.4
61.3
93.2
62.2
Yes
55.1
20.0
39.2
36.0
100.0
79.5
6.0
63.0
No
44.9
80.0
60.8
64.0
-
20.5
94.0
37.0
Yes
23.2
5.4
14.6
16.2
35.0
100.0
1.3
28.0
No
76.8
94.6
85.4
83.8
65.0
-
98.7
72.0
Online Banking (Percent)
Mobile Banking (Percent)
Other (Percent)
Yes
1.0
0.2
0.2
0.3
0.4
0.2
100.0
0.7
No
99.0
99.8
99.8
99.7
99.6
99.8
-
99.3
-= For this table cell, the estimated proportion would round to zero. The population proportion, however, is likely to be slightly greater than zero.
that prevailing among younger households. For
example, less than a quarter (22.8 percent) of households below age 55 used one banking method.
Use of Mobile Banking
Mobile banking is an emerging banking method that
has raised the interest of industry and policy stakeholders as a potential tool for economic inclusion. To
gain insight into this potential and understand how
consumers are using this new delivery channel, the
2013 survey included additional questions on access
to mobile technology, including use of the Internet
and mobile phones, and the types of activities that
consumers perform via mobile banking. Survey
results show a higher incidence of mobile banking
among underbanked consumers relative to the fully
banked. Underbanked consumers also were more
likely to use mobile as their primary banking method.
If mobile banking adoption continues to follow this
pattern, clear opportunities may emerge to use
mobile to more fully-financially engage underbanked
consumers.
Overall, 23.2 percent of banked households that
accessed their account in the past 12 months used
mobile banking. Mobile banking usage among households with access to smartphones was even higher
(36.2 percent).
A greater share of underbanked households (29.2
percent) used mobile banking than fully banked
households (21.7 percent) when smartphone access
was not taken into account. Underbanked households
with access to smartphones (42.0 percent) were also
more likely to use mobile banking compared with
fully banked households with access to smartphones
(34.0 percent).
Main Banking Method Among Households That
Used Mobile Banking
As mobile banking draws more consumers, it is
useful to see how households that use this emerging
channel interact with their financial institutions.
Consistent with expectations, the large majority of
households that used mobile banking (49.5 percent)
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
59
primarily banked online, and one-quarter (24.6
percent) used mobile banking as their main banking
method. In fact, the share of mobile banking users
that used tellers as their main banking method (7.4
percent) was considerably lower than that of
non-mobile banking users (39.7 percent).
Table 8.4 Primary Banking Method Used By
Households That Did And Did Not Use Mobile
Banking
For all banked households that accessed their account in the last 12 months,
column percent
Used Mobile
Banking
(Percent)
Did Not Use
Mobile
Banking
(Percent)
108,295
25,165
83,130
100
100
100
Bank Teller
32.2
7.4
39.7
ATM/Kiosk
24.4
15.3
27.1
3.3
2.3
3.6
Online Banking
32.9
49.5
27.9
Mobile Banking
5.7
24.6
-
Other
0.8
-
1.0
Unknown
0.7
0.9
0.7
All
Number of Households (1000s)
Percent of Households
Primary Banking Method
(Percent)
Telephone Banking
Although the emergence of online and mobile banking facilitates the electronic delivery of banking
services, adoption rates vary widely across subgroups.
For most demographic segments, even those who
bank primarily online or via mobile, bank tellers
continue to be an important banking method. It is
important to continue tracking these trends and the
disparities in adoption. In particular, it is valuable to
understand how changes in delivery channels can
create opportunities to serve certain segments of the
underserved population. However, changes in delivery methods can create additional challenges to serving those who heavily rely on more traditional
channels if they are not as widely offered. Identifying
the specific segments affected can be valuable in
thinking about banking delivery strategies and
balancing the availability of banking channels,
including opportunities to effectively help certain
segments transition.
-= For this table cell, the estimated proportion would round to zero. The population
proportion, however, is likely to be slightly greater than zero.
Among mobile banking users, the use of online and
mobile banking technology differed by banking
status. Underbanked mobile banking users were
considerably less likely (38.1 percent) than fully
banked mobile banking users (54.2 percent) to use
online banking as their main banking method. In
contrast, underbanked households that used mobile
banking were more likely (32.4 percent) to rely on it
as their primary method than fully banked households that used mobile banking (21.6 percent).
Types of Mobile Banking Activity Among Households That Used Mobile Banking
Monitoring bank account balances and recent transactions were the most common mobile banking activities, used by 86.0 percent of all mobile banking users.
Only a quarter (25.5 percent) of households that used
mobile banking deposited a check via mobile.
Results by banking status were very similar. The most
noticeable difference is that underbanked households
were somewhat more likely (51.5 percent) to receive
text message alerts than fully banked households
(44.6 percent).
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
60
Figure 8.7 Primary Banking Method Used By Mobile Banking Users By Banking Status
38.1
Online Banking
54.2
32.4
Mobile Banking
21.6
18.2
ATM/Kiosk
14.2
7.7
Bank Teller
7.3
3.0
Telephone Banking
Underbanked
Fully−Banked
2.0
0
20
40
60
80
100
Figure 8.8 Types Of Mobile Banking Activity By Banking Status
88.5
Checked balance or transactions
85.7
69.5
Downloaded or use bank mobile app
68.0
59.5
Bill payment
60.0
54.9
Transferred money between accounts
56.2
51.5
Text message alert
44.6
38.0
Located the closest in−network ATM or bank branch
31.4
24.8
Deposited a check electronically
26.1
29.0
Sent money to other people
Underbanked
Fully−Banked
25.8
0
20
40
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
60
80
100
61
9. Implications and Conclusion
The survey results presented in this report show a 0.5
percentage point drop in the unbanked rate over the
two-year period between June 2011 and June 2013.
This change is, in part, a function of those entering
and exiting the banking system. In the 12 months
prior to the survey, the proportion of households that
established a banking relationship (1.6 percent) was
larger than the proportion that exited the banking
system (0.7 percent). Future changes in the unbanked
rate will continue to be influenced by the rate at
which new households enter the banking system and
the sustainability of established banking relationships.
The results also demonstrated significant growth in
the use of prepaid debit cards, particularly among
unbanked households, who used them to facilitate
common financial transactions. Finally, the survey
highlighted both the potential of mobile financial
services to increase convenience for underserved
consumers and the continued importance of bank
branches and other banking channels. These results
suggest implications for policymakers, financial institutions and other stakeholders who are working to
improve access to mainstream financial services,
better retain customers in the banking system, and
consider opportunities presented by mobile technology to provide convenient services.
1. Entrances and exits from the banking system are
often associated with changes in employment
and income. Interventions designed to help
households maintain and renew their banking
relationships through economic challenges may
reduce unbanked rates over time.
Banking status is dynamic; many households cycle in
and out of the banking system. About half of all
unbanked households have had a bank account in the
past, and many of these report being likely to open
another account in the future. Almost one in ten
unbanked households became unbanked in the last
12 months and these recently unbanked households
are among the most likely to report wanting to open
another account in the future.
These findings suggest that economic inclusion
efforts should focus both on bringing consumers into
the mainstream banking system and on retaining
current customers by better engaging and meeting
the needs of those at risk of becoming unbanked. In
order to do so, it is important to understand the
circumstances that lead households to transition in
and out of banking, as this can inform efforts to
attract or retain these customers.
In many cases, financial life events, such as job loss,
significant income loss or a new job, appear to be
important reasons why households leave or enter the
banking system. Recently unbanked households were
relatively more likely to have experienced adverse
financial life events such as job loss or significant
income loss. Because these results show that adverse
financial events appear to be more closely associated
with bank account closing decisions than other types
of life events, policy makers and industry participants
might consider ways to cushion the impact of adverse
financial shocks on a household’s ability or desire to
maintain a bank account. In particular, opportunities
may exist for forbearance of fees, flexible product
design, or direct interventions. Interventions could
include targeted outreach or financial education for
recently unemployed households to encourage them
to remain in the banking system, for example.
Recently banked households were relatively more
likely to report a new job and to report that the new
job contributed to the household becoming banked.
In addition, the most frequently reported reason that
recently banked households cited for opening an
account was to receive direct deposits. These findings
suggest that opportunities may exist for bringing
newly employed consumers into the financial mainstream and helping them successfully maintain their
accounts by educating them on the use of bank
accounts and personal financial management. Opportunities may also exist to reach out to employers that
do not yet offer direct deposit to help them lower
costs and help their employees better understand the
opportunities offered by the mainstream banking
system.
2. Unbanked households are increasingly turning
to general purpose reloadable prepaid cards to
address their financial transaction needs and are
generally obtaining them at non-bank locations.
Opportunities may exist to meet these consumers’ needs within the banking system.
While the use of prepaid cards has increased among
all banking status groups, the growth has been particularly fast among unbanked households. In fact, the
proportion of unbanked households that have ever
used prepaid cards more than doubled between 2009
and 2013, to more than 27 percent. The vast majority
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
62
of these unbanked prepaid card users are obtaining
their cards from a non-bank location, but are using
the cards to perform basic financial transactions that
otherwise could be performed using banking services.
Almost half of unbanked households that use prepaid
cards, like other unbanked households, are unbanked
primarily because they perceive they “do not have
enough money to maintain an account or meet a
minimum balance” or because they perceive that
“bank fees are too high or unpredictable.” Although
these households may perceive that their financial
circumstances prevent them from having a banking
relationship, they still have a demonstrated need for
financial services to assist them with basic transactions, such as receiving and making payments. In
fact, four out of five unbanked prepaid card users use
the cards to “pay for everyday purchases or bills” or
to “receive payments.” Banking products such as a
low cost, safe transaction account or a bank prepaid
debit card that meets the specifications of the FDIC
Safe Accounts Template could help meet the financial
transactions needs of these consumers while building
banking relationships.
Almost half of unbanked households that use prepaid
cards report being likely to open a bank account in
the near future. In addition to the demonstrated
demand for financial services evidenced by prepaid
card customers, the results show that previously
banked households are almost two and a half times
more likely to use prepaid cards than households that
have never been banked. Also, having previous banking experience is associated with a greater inclination
to open an account. Consequently, these results
suggest that significant opportunities may exist for
unbanked prepaid card users to enter or rejoin the
banking system.
3. Mobile banking is a potential tool to encourage
economic inclusion but bank branches continue
to play an important role for many consumers,
including those who are underbanked.
Mobile technology appears to have promise to help
expand economic inclusion based in part on its
potential to enhance the convenience of banking
transactions. The 2009 and 2011 surveys found that
many households use transaction AFS mainly
because of convenience. Mobile technology provides
consumers with the ability to conveniently conduct
transactions and view account balances anytime and
anywhere.
For mobile technologies to improve economic inclusion among the underserved, these consumers must
have access to mobile phones, particularly smartphones. The 2013 survey shows that mobile phone
access is prevalent among banked households, especially among the underbanked. In fact, underbanked
households are more likely than fully banked households to own a smartphone and they are more likely
than fully banked households to use mobile banking
and to use it as their main banking channel. These
findings suggest that underbanked consumers are
well-positioned to take advantage of mobile banking.
In addition, mobile technologies might also become
useful tools for bringing unbanked households into
the financial mainstream. While cell phone access is
less common among unbanked households than
among the underbanked and fully banked, it is still
relatively high. More than two-thirds of unbanked
households have access to mobile phones, almost half
of which are smartphones, while fewer than half of
unbanked households have regular Internet access.
Innovations such as mobile account opening could
play a role in expanding access to banking for the
unbanked.
From the supply side, basic mobile banking offerings
are becoming ubiquitous, and more comprehensive
functionalities are being deployed all the time.
However, as discussed in the 2014 FDIC report
“Assessing The Economic Inclusion Potential of
Mobile Financial Services”, mobile banking offerings
are not always implemented in ways that facilitate
economic inclusion.1 For example, mobile banking is
often designed to work together with online banking.
To access mobile banking, users often must have an
online-enabled bank account and use online banking.
And, sometimes certain mobile banking features,
such as mobile banking alerts, need to be set up or
changed via an online banking platform. Although
underbanked and fully banked households have regular access to the Internet at similar rates, the use of
online banking as the main banking method is
considerably less prevalent among the underbanked.
This suggests that mobile banking’s interdependence
with online banking could constrain underbanked
households’ ability to take advantage of the full array
of mobile banking functionalities.
Having mobile banking function more completely as
a standalone channel would not necessarily diminish
See Susan Burhouse, Matthew Homer, Yazmin Osaki, and Michael
Bachman, “Assessing the Economic Inclusion Potential of Mobile Financial Services,” June 30, 2014, available at https://www.fdic.gov/consumers/community/mobile/Mobile-Financial-Services.pdf.
1
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
63
the importance of other banking methods. On the
contrary, other banking channels continue to be
widely used and are important for economic inclusion and outreach efforts. In fact, the majority of both
fully banked and underbanked households that use
mobile banking as their primary channel also use a
bank branch. Traditional banking channels, such as
branches, provide functions not currently available
through online and mobile banking. For example,
consumers that need to purchase money orders or
cash a check generally need to go to a bank teller. In
addition, FDIC pilot studies have found that branch
staff play an important role in making underserved
consumers aware of products, providing basic financial education, and growing their banking
relationships.2
As banking technologies continue to evolve, it is
important to continue tracking how households
access banking services. To this end, policymakers,
practitioners and other stakeholders can look for
feasible ways to make all mobile banking functionalities more accessible to underserved consumers, while
also continuing to evaluate the role that branches
play in providing transaction services and assess
opportunities to grow banking relationships with
underserved consumers through mobile and
non-mobile channels.
See Rae-Ann Miller, Susan Burhouse, Luke Reynolds and Aileen Sampson, “A Template for Success: The FDIC’s Small Dollar Loan Pilot
Program,” FDIC Quarterly 2010, Volume 4, No. 2 and Sherrie Rhine and
Susan Burhouse, “FDIC Model Safe Accounts Pilot: Final Report,” April
2012.
2
2013 FDIC National Survey of Unbanked and Underbanked Households • October 2014
64
| File Type | application/pdf |
| File Title | FDIC Survey of Banks’ Efforts to Serve the Unbanked and Underbanked |
| File Modified | 2015-04-09 |
| File Created | 2014-10-27 |