By: Gina Gallovich
According to the FDIC, 6.5 percent of all Americans are unbanked, but the percentage leaps to a staggering 16.9 percent when you specifically look at African Americans. What is unbanked, you might ask. Unbanked and underbanked refers to people who either have no accounts with a financial institution (bank) or have an insignificant portion of money or accounts in said institutions.
If you’re one of the unbanked or underbanked, why should you consider this? We all know the United States way of living is based on credit. With that being said: you will not be able to develop a financial or credit history and therefore you will be unable to secure loans or mortgages, thus increasing the wealth gap between you and others.
Your reasons behind being unbanked and underbanked may be you don’t make enough money, you don’t trust banks, and/or banks and financial institutions have high fees. Let’s go through these reasons one by one and see if we can move you from unbanked/underbanked to a position of greater financial security.
You don’t make enough money to open or keep open an account.
Do you know that there are many financial institutions that have no minimum balance requirements? You can open a checking account, have your paycheck automatically deposited and pay your bills from there. That handles two out of three reasons why you’re unbanked. If you set up a checking account you won’t pay exorbitant check cashing fees, fees for money orders to pay bills, etc.
This puts you ahead of the game financially, already, by doing away with excessive fees. First Independence Bank offers checking accounts with no minimum balance and offers what they call FIB Perks: access to online banking, mobile bill pay and deposits; free ATM/debit card; savings for shopping local; and many other advantages. Furthermore, this will help start you on your way to developing a financial history.
You mistrust banks and financial institutions.
This is another easy fear to overcome: work with a community bank. Community banks are those smaller institutions which are located within your neighborhoods, the ones that employ your neighbors and friends. Go into a local branch and talk to a banker. You may be surprised at who you see there, and the knowledge and information they can give.
Helda Saad, executive project manager with First Independence Bank, said,” We work hard to develop a good relationship with our clients, many of whom are people who live and work in our community.
With Detroit, Warren, and Dearborn being among the areas with the highest unbanked populations, the wealth gap is even more apparent. Those who are unbanked and underbanked cannot qualify for mortgages; are reduced to paying more for interest for car loans; and basically, are unable to save for emergencies.
“Relationships matters! When you develop a relationship with a bank you can qualify for more than just a checking or savings account,” said Saad.
First Independence Bank is a member of the FDIC and is an Equal Housing Lender