Why Many People Go Without a Bank Account

Nearly a third of Americans are "underbanked," meaning they lack access to a full array banking services—but why? The question is particularly pressing when you consider that cashing checks and paying bills without a bank account can cost an extra $380 a year. What's more, low-income, unemployed, and minority Americans are more likely than other groups to have no bank account. So why pay more for financial services when a $10-a-month account would do the trick?

For four reasons, according to Time:
Unavailable services: Banks prefer moneyed customers, so they don't always offer services to low-income people. When forced to by state law, banks may have the services but won't promote them.
Time and money: Workers burdened by a long commute or long hours may not be able to reach a bank during business hours. And people low on money may need to cash their checks right away.
Lack of trust: Newly arrived immigrants may not trust banks, and low-income people may avoid direct deposit because they distrust electronic banking. The fear of $25 charges for bounced checks and other errors also keep low-income people away from banks.
Financial literacy: Potential bank customers may not understand what it costs them to pay bills and cash checks with outside financial services. (More banking stories.)