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 18.5% are underbanked—they have a basic account but also rely on check cashers, payday lenders, or money orders for everyday money moves. That's roughly one in four households operating partly or entirely outside the traditional banking system.

The reasons people don't have savings accounts are practical, not moral. Some face real barriers: no minimum balance to open an account, no way to get to a branch, past banking problems that show up on ChexSystems (a banking history report), or distrust built over time. Others straightforward don't see the point if they live paycheck to paycheck and have nowhere to save. Understanding why matters because it shapes what financial tools actually work for different people.

Key Takeaways

  • About one in four U.S. households either has no bank account or uses alternative financial services alongside a basic account.
  • Common barriers include overdraft fees, minimum balance requirements, past banking problems, and lack of nearby branches.
  • ChexSystems records banking history and can block account opening for years after a closed account with unpaid fees.
  • Second-chance banking accounts and credit unions often have lower minimums and fewer fees than traditional banks.
  • Having no savings account doesn't mean someone is irresponsible—it often reflects real constraints or past negative experiences with banks.

Why people close accounts or never open them

The most common reason people stop banking is overdraft fees. A single overdraft can trigger a cascade: the bank charges $30 to $35, the account dips further negative, another fee hits, and suddenly someone owes $100 on a $50 mistake. For someone living on a tight margin, that's the moment they close the account and switch to cash or check cashers.

Minimum balance requirements also lock people out. Some banks require $300 or $500 to stay open, which is realistic for some households and impossible for others. If you're paid weekly and spend most of it on rent and food, maintaining a minimum balance isn't a choice—it's a barrier. Credit unions typically have lower or no minimums, but not everyone lives near one or knows they exist.

Past banking problems follow people. If you had an account that went negative and you didn't pay the fees, or if a bank closed your account for suspected fraud, that record stays in ChexSystems for five to seven years. During that time, most banks will deny you a new account. You can request your ChexSystems report and dispute errors, but the process takes time and many people don't know it's possible.

Who is most likely to be unbanked or underbanked

Unbanked and underbanked households are not evenly distributed. Black and Latino households are unbanked at roughly twice the rate of white households. Households earning under $30,000 a year are unbanked at much higher rates than those earning more. Single mothers, people without a high school diploma, and people over 65 on fixed incomes also show higher rates of being unbanked or underbanked.

Geography matters too. Rural areas often have fewer bank branches, and some neighborhoods have been deliberately underserved by banks—a pattern called redlining that has historical roots but current consequences. Someone in a rural county might have one bank branch 20 miles away, making regular banking impractical.

Immigration status also plays a role. Some people without a Social Security number or with mixed-status families avoid banks out of fear, even though federal law allows undocumented immigrants to open accounts. That fear is often based on real experiences or stories from their community, and it's a barrier no fee structure can fix.

What happens when you don't have a savings account

Without a bank account, money moves become expensive. Check cashing typically costs 1% to 3% of the check amount—so cashing a $1,000 paycheck costs $10 to $30. Money orders cost $1 to $5 each. Payday loans charge 400% annual interest or higher. Over a year, these fees add up to hundreds of dollars that a savings account would avoid.

There's also no safety net. Cash can be lost, stolen, or spent impulsively. A savings account creates a small friction—you have to go to the bank or use an app—that makes it slightly harder to spend money you meant to keep. For someone trying to build even a small emergency fund, that friction is useful.

Credit building is also harder. Banks report account history to credit bureaus, which helps build a credit score. Without a bank account, you have fewer ways to show lenders you can manage money responsibly. That makes borrowing more expensive later, if you need it.

Second-chance accounts and alternatives if you've been denied

If ChexSystems is blocking you, second-chance banking accounts exist specifically for people with banking history problems. Banks like Chime, LendingClub, and some regional banks offer accounts designed for people who were denied elsewhere. They typically have no minimum balance, no overdraft fees (or overdraft protection that doesn't charge), and lower monthly fees than traditional accounts.

Credit unions are another route. They're member-owned nonprofits and often have more flexible policies than banks. Many credit unions will open an account for someone with ChexSystems issues if you explain what happened. Some also offer credit-builder loans—you borrow a small amount (say $500) that sits in a savings account while you make payments. It costs money in interest, but it rebuilds your credit and gives you a real savings account at the end.

If you want to check your ChexSystems record before explore, request it free at chexsystems.com. You can dispute errors, and if there are legitimate fees you owe, some banks will reconsider your process if you pay them. It's worth asking.

Why having a savings account matters, even a small one

A savings account isn't about being wealthy or responsible—it's about having options. An unexpected car repair, a medical bill, a job loss: these happen to everyone. Without any savings, a single unexpected cost forces you to borrow at high interest or fall behind on something else. With even $500 in savings, you have a choice.

A savings account also separates your spending money from your emergency money. If both are in your pocket, the emergency money gets spent. If it's in a separate account, even at the same bank, it's slightly harder to touch. That small friction is often enough to let someone build a real cushion over time.

The account doesn't have to be at a big bank. Online banks, credit unions, and second-chance accounts all work. The point is having a place where money can sit without being when ready available, where it earns a tiny bit of interest, and where you have a record of what you've saved.

Frequently Asked Questions

Can I open a savings account if I've been denied before?

Yes. Second-chance accounts are designed for this. Check your ChexSystems record first to see what's blocking you, then look for banks or credit unions that specifically offer accounts for people with banking history issues. Some will also work with you if you pay off old fees.

What's the difference between unbanked and underbanked?

Unbanked means you have no bank or credit union account at all. Underbanked means you have one, but you also use check cashers, payday lenders, or money orders regularly because the account doesn't meet all your needs. Both groups pay more in fees than people who use traditional banking for everything.

Do I need a Social Security number to open a savings account?

Most banks require one, but some don't. Credit unions and some online banks will open accounts using an ITIN (Individual Taxpayer Identification Number) instead. Call ahead and ask—don't assume you're ineligible without checking.

How long does a banking problem stay on ChexSystems?

Negative items typically stay for five to seven years, though the exact timeline depends on what happened. You can request your report free and dispute errors. Even after the time expires, some banks may still deny you, so second-chance accounts are often the faster route.

What's the cheapest way to save money if I don't have a bank account?

A second-chance online bank account with no monthly fees is the cheapest option. If that's not possible, a credit union account is usually next. Both cost far less than check cashing, money orders, or payday loans over time.