No, not everyone has a savings account, and the reasons vary widely

About 5.4% of U.S. households are unbanked—meaning no one in the household has a checking or savings account at a bank or credit union. Another 18% are underbanked—they have some banking services but rely heavily on alternatives like check-cashing services, payday loans, or money orders. The gap is not random. It breaks down by income, race, immigration status, age, and geography in ways that compound over time.

The reasons people don't have savings accounts fall into a few categories: they cannot meet the requirements banks set, they do not trust banks, they cannot afford the fees, or they have never had access to one. Some people have been locked out by past banking mistakes. Others live in areas with few or no bank branches. Understanding why matters because it shapes what financial tools are actually available to someone, and what happens when they need to receive money—including refunds.

Key Takeaways

  • About one in twenty U.S. households has no bank account at all, and another one in five relies mostly on non-bank services.
  • Banks require a minimum deposit, a government ID, and often a credit check or ChexSystems report, which blocks people with past banking problems.
  • Monthly fees, overdraft charges, and low balances can make traditional bank accounts unaffordable for people living paycheck to paycheck.
  • People without bank accounts receive refunds and government payments through check, prepaid card, or money order—each with different timing and costs.
  • Credit unions and online banks often have lower minimums and fewer fees than traditional banks, but still require an ID and proof of address.

Who does not have a bank account and why

The unbanked population is not evenly distributed. Households earning under $15,000 per year are unbanked at roughly four times the rate of households earning $50,000 or more. Black and Hispanic households are unbanked at higher rates than white households. Immigrants without a Social Security number face barriers even when they have income and savings. Older adults on fixed incomes sometimes close accounts when fees exceed their balance. Young people aging out of foster care often have no ID and no one to co-sign an account.

The most common reason people cite is not having enough money to meet a minimum deposit—often $25 to $100, though some banks require more. The second is not having the required ID. A third is distrust: past overdraft fees, bounced checks, or identity theft make people wary of putting money in a bank. A fourth is practical: if you live in a rural area or a neighborhood where banks have closed, the nearest branch might be an hour away and require a car.

Some people are blocked by ChexSystems, a banking history report that tracks closed accounts, unpaid fees, and fraud. If you owe a bank money or closed an account badly, ChexSystems records it for five years. Many banks check ChexSystems before opening an account, which means one bad experience can lock someone out of banking for years.

What banks require to open an account

A standard bank account requires: a government-issued photo ID (driver's license, passport, or state ID card); proof of address (utility bill, lease, or mail from a government agency dated within the last 60 days); a Social Security number or Individual Taxpayer Identification Number (ITIN); and often a minimum opening deposit of $25 to $500. Some banks also run a credit check or ChexSystems report.

For people without a Social Security number, an ITIN can work, but not all banks accept it. For people without a permanent address, a mail from a shelter, transitional housing program, or trusted contact can sometimes substitute. For people with a ChexSystems record, some banks specialize in "second chance" accounts, though these often come with higher fees and lower balance limits.

Online banks typically have lower minimum deposits—sometimes $0—but still require an ID and proof of address. They also require an email address and a phone number for verification. If someone does not have reliable internet access or a phone, opening an online account becomes difficult.

How fees and overdrafts keep people out of banking

Even when someone opens an account, fees can make it unsustainable. A typical bank charges $10 to $15 per month for a basic checking account, plus $30 to $35 per overdraft. For someone living on $1,200 a month, a $12 monthly fee and one overdraft charge can eat 3.5% of income. Over a year, that is $144 in fees alone.

Overdrafts happen easily when you have little margin. A $1.50 coffee purchase can trigger a $35 overdraft fee if your balance is $1.20. Some banks stack overdrafts—charging a fee for each transaction that goes negative in a single day, which can add up to $100 or more. Others charge a daily fee for staying overdrawn. People who have experienced this once often close the account and go back to cash.

Credit unions and online banks tend to have lower or no monthly fees, and some do not charge overdraft fees at all. But they still require the same ID and address proof, and they still report to ChexSystems. For someone with a past banking problem, the fee structure matters less than whether they can open an account in the first place.

How people without bank accounts receive refunds and payments

When someone without a bank account is owed money—a tax refund, an insurance payout, a stimulus payment, or a business refund—they have three main options: a paper check, a prepaid card, or a money order.

Paper checks arrive by mail and take 7 to 14 business days from the time they are issued. To cash a check without a bank account, someone must go to a check-cashing service, which charges 1% to 3% of the check amount. On a $1,200 tax refund, that is $12 to $36 out of pocket. Some grocery stores and retailers cash checks for free if you have a store card or make a purchase. Some banks cash checks for non-customers, though policies vary.

Prepaid cards are issued by the government or company directly and funded electronically. Tax refunds can be sent to a prepaid card instead of a bank account. The card arrives in the mail and can be used immediately at ATMs and stores. There is no monthly fee, but ATM withdrawals outside the issuer's network cost $1 to $3 each. If the card is lost or stolen, replacing it takes 7 to 10 days.

Money orders are less common for refunds but sometimes used for business or insurance payouts. They must be cashed at a bank, credit union, check-cashing service, or post office, and cost 50 cents to $5 to cash depending on the amount and location.

Alternatives to traditional bank accounts

For people who cannot or will not use a traditional bank, several alternatives exist. Credit unions often have lower fees and more flexible ID requirements than banks. Some credit unions serve specific groups—teachers, military members, low-income workers—and may waive minimum deposits or accept alternative ID. You can search for credit unions by location or membership group at CO-OP.org or Shared Branch.

Online banks like Chime, Varo, and LendingClub typically have no monthly fees, no minimum deposit, and no overdraft fees. They require an ID and proof of address, but the process is entirely online and takes 5 to 10 minutes. The tradeoff is that you cannot deposit cash—all deposits must come from direct deposit, transfers, or mobile check deposit.

Prepaid cards from companies like NetSpend, Serve, and GoBank function like debit cards without requiring a bank account. You load money onto them and use them at stores and ATMs. They cost $5 to $15 per month and charge $1 to $3 per out-of-network ATM withdrawal. Some offer direct deposit, which makes them useful for receiving paychecks or refunds.

Community development financial institutions (CDFIs) are nonprofits that offer banking services to people banks have rejected. They often have no minimum deposit, accept alternative ID, and do not charge overdraft fees. You can find CDFIs at CDFI Fund.org or by calling 211.

What happens when you need a refund but have no account

If you are waiting for a tax refund, insurance payout, or other money and do not have a bank account, you must choose a delivery method before the refund is issued. For tax refunds, you can request a check or a prepaid card on your tax return. For insurance refunds, the company will ask how you want to receive the money. For stimulus payments or government benefits, you can usually choose check or card.

The timing changes based on your choice. A check takes 7 to 14 business days to arrive after it is issued, plus 1 to 3 days to cash it. A prepaid card takes 7 to 10 business days to arrive but can be used immediately once it comes. Direct deposit (if you have an account) is fastest—2 to 3 business days from issuance.

If you are unsure which option to choose, consider: Do you have reliable mail delivery? Do you have access to a check-cashing service or bank? Do you need the money urgently? A prepaid card is usually faster and safer than a check, but requires mail delivery. A check is slower but can be cashed almost anywhere.

Frequently Asked Questions

Can I open a bank account without a Social Security number?

Yes, if you have an ITIN (Individual Taxpayer Identification Number) issued by the IRS. Not all banks accept ITINs, so you will need to call ahead. Credit unions and some online banks are more likely to accept them than traditional banks. You will still need a government-issued ID and proof of address.

What is ChexSystems and how long does it stay on my record?

ChexSystems is a banking history report that tracks closed accounts, unpaid fees, and fraud. Negative information stays on your report for five years. You can request a free copy of your report at ChexSystems.com and dispute errors. Some banks specialize in "second chance" accounts for people with ChexSystems records, though fees are usually higher.

If I get a check but do not have a bank account, where can I cash it?

Check-cashing services, grocery stores, Walmart, and some banks will cash checks for non-customers. Fees range from free (at some retailers if you have a store card) to 3% of the check amount. Your bank may also cash checks for non-customers—call ahead to ask. Credit unions sometimes cash checks for non-members at a lower fee.

Can I use a prepaid card to receive a tax refund?

Yes. When you file your tax return, you can request that your refund be sent to a prepaid card instead of a bank account or check. The card arrives by mail in 7 to 10 business days and can be used immediately. There is no monthly fee, but out-of-network ATM withdrawals cost $1 to $3 each.

What is the fastest way to receive money if I do not have a bank account?

Direct deposit is fastest (2 to 3 business days), but requires a bank or credit union account. Without one, a prepaid card is usually faster than a check—7 to 10 days to arrive versus 7 to 14 days plus time to cash. A check is slowest but works almost anywhere once it arrives.