No, most adults do not have a checking account

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, meaning they have an account but also rely on check cashers, payday lenders, or prepaid cards for financial services. That adds up to roughly one in four American households without full access to traditional banking.

The reasons vary widely. Some people distrust banks after past overdraft fees or account closures. Others live in areas with few bank branches nearby. Some lack the documents banks require to open an account. Still others simply prefer cash or have never needed a checking account for their work or bills.

Duolingo, the language-learning app, does not determine who has a checking account — that is a real-world financial decision based on a person's circumstances, not something an app can measure or change.

Key Takeaways

  • About one in four U.S. households either has no bank account or relies on non-bank financial services alongside a bank account.
  • Common barriers to having a checking account include lack of required documents, distrust of banks, living far from branches, and minimum balance requirements.
  • A checking account is not required to receive income, pay bills, or participate in the economy — alternatives exist for each of these needs.
  • Banks and credit unions have different account requirements; some offer second-chance accounts for people with past banking problems.

Who typically does not have a checking account

People without checking accounts fall into several overlapping groups. Immigrants and refugees may lack the Social Security number or state ID that banks require. People experiencing homelessness often cannot meet the address requirement. Those with a history of overdrafts or fraud may find themselves on ChexSystems, a banking history database that makes opening a new account difficult or impossible.

Young people, particularly teenagers and young adults, may not have opened an account yet because they have not needed one. Older adults sometimes close accounts and return to cash after a lifetime of banking. People in rural areas may live 20 or 30 miles from the nearest bank branch. Low-income households sometimes decide the risk of overdraft fees outweighs the benefit of having an account.

Incarcerated people cannot open or maintain accounts while in custody. People with severe mental illness or cognitive disabilities may lack the support to manage an account. None of these situations is rare — they describe millions of Americans.

What banks actually require to open a checking account

Most banks ask for a government-issued photo ID, proof of address (usually a utility bill or lease), and a Social Security number or Individual Taxpayer Identification Number (ITIN). Some banks also run a ChexSystems check, which flags people who have had accounts closed for overdrafts, fraud, or other reasons.

Minimum balance requirements vary. Some banks require $25 to $100 to open an account; others require $500 or more. Some waive the minimum if you set up direct deposit. A few banks have no minimum at all.

Credit unions often have lower barriers than banks. Many credit unions do not use ChexSystems, offer second-chance accounts for people with banking problems, and have lower or no minimum balances. However, credit unions require membership, which usually means living or working in a specific area or belonging to a specific group (such as a union or employer).

Alternatives when a checking account is not an option

A prepaid card works like a checking account for daily spending — you load money onto it and use it to buy things or withdraw cash. No credit check, no ChexSystems lookup, no minimum balance. The downside is that prepaid cards charge monthly fees ($5 to $15 is common) and per-transaction fees that add up quickly.

A savings account at a bank or credit union lets you store money safely and earn interest, but does not come with a debit card or check-writing ability. Some people use a savings account plus a prepaid card for spending.

Check-cashing services turn paychecks into cash for a fee (usually 1% to 3% of the check amount). This is expensive over time but requires no account or ID beyond a photo.

Money transfer services like Western Union or MoneyGram let you send and receive money without a bank account. Fees are high — often $5 to $20 per transfer — but the service is available at thousands of locations.

Cash-based systems work for people who receive cash wages, pay rent and bills in person or by money order, and do not need to build credit. This is less convenient than banking but is entirely possible.

Why some people choose not to have a checking account

Distrust is a major reason. People who have been hit with overdraft fees, had accounts frozen, or experienced fraud may decide the risk is not worth it. Banks have closed accounts belonging to people with criminal records, immigration status issues, or political affiliations — these closures are rare but memorable and spread through communities.

Cost is another factor. If you live paycheck to paycheck, a $35 overdraft fee can trigger a cascade of missed bills. Monthly maintenance fees, ATM fees, and minimum balance requirements add up. For someone earning $15,000 a year, $120 in annual banking fees is significant.

Some people simply do not need a checking account. If you are paid in cash, pay rent in cash, and buy groceries with cash, a bank account adds no value. If you have never written a check and do not plan to, checking features are irrelevant.

How to open a checking account if you have been denied before

If you have been turned down, start by checking your ChexSystems record. You can request a free report at www.chexsystems.com. If there are errors, you can dispute them. If the record is accurate, you may need to wait — most negative items fall off after five years.

Look for a second-chance checking account, which is designed for people with banking problems. These accounts often have no ChexSystems check, lower minimum balances, and fewer fees. Chime, LendingClub, and some regional banks offer them. Credit unions in your area may also offer second-chance accounts.

If you lack an ID, contact your state's DMV about getting a state ID card (different from a driver's license). If you lack an address, some banks will accept mail sent to a shelter, a trusted friend's address, or a PO box. Call ahead and ask what the bank will accept.

If you lack a Social Security number, you can use an ITIN instead. ITINs are issued by the IRS to people who file taxes but do not have a Social Security number. Some banks accept ITINs; others do not. Credit unions are more likely to accept them.

What happens to income and bills without a checking account

People without checking accounts receive income through cash wages, check cashing, money transfer services, or prepaid card direct deposit. Employers can deposit paychecks onto a prepaid card if you provide the card's routing and account number — this is faster and cheaper than cashing checks.

Bills can be paid by money order (available at post offices and grocery stores for $1 to $2 each), in person at the biller's office, or through a bill-pay service like PayPal or Google Pay. Rent is often paid in cash or by money order. Utilities can be paid online without a bank account if you use a debit card or prepaid card.

Building credit without a checking account is harder but possible. Secured credit cards (which require a cash deposit) and credit-builder loans (offered by some credit unions) let you build a credit history. A checking account is not required to build credit.

Frequently Asked Questions

Can I get a job without a checking account?

Yes. Employers can deposit paychecks onto a prepaid card, pay you in cash, or issue a physical check that you cash elsewhere. Some employers prefer direct deposit to a bank account, but many will work with you if you explain your situation. Ask during the hiring process what payment methods are available.

Will a bank account help me build credit?

No. A checking or savings account does not appear on your credit report and does not affect your credit score. Credit is built through credit cards, loans, and payment history. A bank account is separate from credit.

What if I was on ChexSystems and want to open an account now?

Request your free ChexSystems report and check for errors. If the record is accurate, most negative items fall off after five years. In the meantime, look for second-chance checking accounts or credit unions that do not use ChexSystems. Some banks will open an account if you explain what happened and show you have corrected the problem.

Can I use a prepaid card for everything a checking account does?

Almost. Prepaid cards let you spend, withdraw cash, and receive direct deposit. They do not let you write checks, overdraw (which is actually an advantage), or build credit. For most daily needs, a prepaid card works fine — the main drawback is the fees.

Do I need a checking account to rent an apartment?

Most landlords ask for proof of income and a way to pay rent reliably, but not necessarily a checking account. You can show bank statements from a savings account, prepaid card statements, or pay stubs. Rent can be paid by money order or cashier's check. Call the landlord and ask what proof of income and payment methods they accept.