A small portion of the population has no bank or transaction accounts of any kind. They’re called the unbanked, and they rely heavily on cash dealings and alternative financial service providers to make their way in the world. There are also more of them each year, according to a recent FDIC survey.

Unbanked millions

A lot of people conduct all their transactions in cash, including getting paid each month. That means it is not that ridiculous to assume that some people do not need a banking account to survive in the country, though many people think that this is the case.

In the past, there have been a lot of mistakes made by the financial system in the country, and that is why some people are just completely against the system. They only keep away from a banking account because they are avoiding the system.

They are called the „unbanked,“ according to CNN, and their numbers are increasing. It is estimated that almost 10 million people are now unbanked.

Knowing more with FDIC

In 2009, the Federal Deposit Insurance Corporation released a study in regards to the number of the unbanked and also the under-banked, meaning people who used financial institutions other than banks such as check cashers and cash advance lenders.

According to Businessweek, the survey showed that there were 9 million people, or 7.7 percent of households, that did not have accounts. In 2011, that number increased to 10 million households or 8.2 percent of the country.

About 88.5 percent of people in the country have a checking account while 69.2 percent have a savings account, according to Fox Business. A number of people use other providers to have their accounts though.

Reasons for it

In the FDIC survey, respondents explained why they avoided banks, according to CNN. 7.7 percent said they did not want to work with banks while 5.4 percent said that it cost too much to pay all the fees or that minimum balances were too high. About 21 percent said that they did not want or need the account while 33 percent said they did not have enough money coming in regularly to need the account.

A further 6.6 percent reported having a negative history with banks or lacked proper identification needed to open an account and 6.4 percent of respondents had an account closed by a bank due to overdrafts or overdue charges.

Of the unbanked, 12 percent used pawn shops, cash lenders or payday lenders in the last 30 days before the survey and 59 percent had used them during the last year, according to Fox Business. About 18 percent of respondents used prepaid cards for cash. Alternative financial services seem to be what the unbanked used.

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