Who Remains Unbanked in the United States and Why?

A previous version of this working paper was originally published in January 2025.

Biennial FDIC household survey data on bank account ownership and household characteristics, combined with state-level variables, are examined with use of both fixed effects and multilevel modeling. The analysis finds that as rising incomes have helped to reduce the unbanked percentage of the population over this period, unbanked status has become more concentrated among single individuals and disabled individuals and less concentrated among younger households over this period, and less strongly related to unemployment spells. Additional factors identified by the analysis include lack of digital access and non-citizen immigrant status, both associated with significantly higher likelihood of being unbanked. Identified state-level relationships include an association between financial literacy measures and percent unbanked. Overall, the findings suggest that continuation of recent efforts by policymakers to bridge the digital divide in rural and urban areas and to enhance financial literacy could help expand financial inclusion. However, unknown structural factors still pose a challenge to explaining who is unbanked, especially regarding gaps by race and ethnicity, underscoring a need to capture more granular data on the unbanked.