29% of U.S. Households Don't Have a Savings Account

More than one in four American households do not have a savings account and one in ten don’t have a checking account, the Federal Deposit Insurance Corporation found in a 2011 survey released on Thursday. Roughly two-thirds of U.S. households have both a checking and savings account.

The findings are the result of the second National Survey of Unbanked and Underbanked Households, sponsored last year by the FDIC and conducted by the U.S. Census Bureau. The survey found that since the first poll two years earlier, the number of unbanked and underbanked people has risen slightly, up by approximately 810,000, or 0.6 percent.

Nearly 10 million U.S. households are unbanked, accounting for 8.2 percent of all households; and 24 million households are underbanked, accounting for 20.1 percent of all households.

The survey also found that a quarter of households have used at least one alternative financial service (AFS) in the past year, and almost one in ten households have used two or more AFS. Overall, four in ten of unbanked and underbanked households have used AFS in the last 30 days.

The FDIC defines unbanked households as those that lack any type of deposit account an a federally insured financial institution, and defines underbanked as those that have an account but still rely on AFS providers. Fully-banked households are those that have a bank account of any kind and have not recently used the services of an AFS provider.

AFS lenders includes pawn shops, payday lenders, car title lenders, and rent-to-own stores - lenders that typically charge interest rates well above the rate limits imposed on banks and credit card issuers, with annual interest rates into the triple digits. Many underbanked individuals have limited or poor credit histories and are often limited to the these types of high-interest lenders to obtain a loan.

"The results of the 2011 National Survey of Unbanked and Underbanked Households indicate that insured financial institutions have an important chance to grow their customer base by expanding opportunities that bring unbanked and underbanked individuals into mainstream banking," said FDIC acting chairman Martin J. Gruenberg.


Source:
Federal Deposit Insurance Corporation