Millions of consumers, in addition to other people of color, cannot easily change a check or pass to an ATM because they are not bank consumers.
The main reasons given to have a bank account are to have enough cash to meet minimum balance requirements, trust banks, bank account rates are too high, and bank account fees are too unpredictable.
Banks across the country are now asked to offer one more type of account called Bank On accounts that allows you to bank at low or no rates. These accounts have low maintenance fees per month and no overdraft fees.
The American Bankers Association on Monday asked all banks in the country to offer “certified bank accounts” to expand access to banking facilities and reduce the number of unbanked and low-bank Americans. More than 40 banks are providing such accounts. The minimum opening deposit can be only $25 or less.
No one in the household has access, even to an existing account or a key savings account, to about 7. 1 million households, or 5. 4% of U. S. households, according to a survey published Monday through one of the country’s “How America Banks” banking regulators. “
The good news is that a healthier economy in recent years has meant the lowest point of so-called “unbanked” consumers in the 10 years of the survey: the highest point of 8. 2% in 2011 and the 6. 5% point in the last survey for 2017.
The Federal Deposit Insurance Corporation thoroughly examines how consumers use the banking formula every two years in partnership with the US Census Bureau. But it’s not the first time The latest survey referred to responses from 33,000 households.
However, the economic benefits in 2020 can get more people out of classic bank accounts.
FDIC surveys show that the unemployed are 4 times more likely to fall into the unbanked category, according to Karyen Chu, head of the banking studies segment at the FDIC Financial Research Center.
Workers who enjoy significant wage adjustments week by week are also more likely not to have an existing account or key savings.
“Even others who haven’t lost their jobs can paint fewer hours and possibly reduce their income,” the FDIC report says in a COVID-19 postscript.
“One of the effects of these situations is likely to be an increase in the rate of non-bankers
just before the pandemic, ” they point out.
Race and ethnicity also come into play, as black and Hispanic consumers are more likely to have no bank accounts than white consumers.
Approximately 13. 8% of black families did not have access to banking services in 2019, up from 16. 8% in 2017.
Approximately 12. 2% of Hispanic families were bankrupt in 2019, up from 14. 4% in 2017.
By contrast, 2. 5% of white families fell into the category of non-bankers, according to the FDIC survey.
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The southern states have the highest grades of unbanked consumers. Non-bank rates ranged from 0. 5% in New Hampshire to 12. 8% in Mississippi.
States such as Michigan, Illinois, Kentucky, and New York came first with a 5. 6% to 7. 6% diversity of unbanked households. According to FDIC data, states such as Texas, Tennessee, New Mexico and Louisiana rank above with more than 7. 6% of non-banked households.
Michigan had about 5. 7% unbanked families in 2019, up from 5. 6% in 2017.
To find a more affordable bank account, consumers can access a link called BankOn on an FDIC online page at FDIC. gov/getbanked.
Several special programs, adding cheap accounts, are presented through monetary establishments such as First Independence Bank, Key Bank, Bank of America and Chase.
Consumers can avoid monthly maintenance fees or get reduced rates if they have a direct deposit set up for a pay check or normal deposits, such as Social Security checks. Credit unions, which also offer insurance on accounts, may also have reduced rates.
Another option to Fix according to the FDIC is an existing “no check” account for a first bank account. You would use a debit card instead of issuing checks.
“As an insured bank account through the FDIC,” says the FDIC, “a non-check account can allow you to access your account and pay your expenses online or through a cellular app. “
“Chequeless accounts allow consumers to avoid spending more than the amount on the account, which means that if there is not enough cash in their account to make a transaction, the transaction will not run and you will not be charged fees. . ” FDIC.
Obviously, more education, and fewer hidden fees, will be needed to inspire more people to opt for secured bank accounts, especially despite the economic pressures faced by low-income families and others today.
Get in touch with Susan Tom stompor@freepress. com. Follow her on Twitter. To subscribe, stop by freep. com/specialoffer. Infórmese more about business and sign up to receive our business newsletter.