CHERRY HILL, N.J., August 19, 2021 – TD Bank, America's Most Convenient Bank®, today released the results of its annual Money Matters survey, revealing a systemic savings issue among the underbanked and unbanked communities.
This year’s survey, which targeted the underbanked and unbanked, found that despite a recovering economy, Americans are still struggling to save or maintain a strong financial standing, with only 11% of underbanked respondents having a savings account. The term unbanked describes individuals who do not use banks or credit unions for their financial transactions and do not have a checking nor savings account. Underbanked consumers have either a checking or savings account, but also rely heavily on alternative financial services.
More than half of underbanked and unbanked respondents (54% and 52%, respectively) said that they save/put aside less than $50 a month. Among this segment, one-half of the underbanked (48%) and unbanked (53%) do not have enough savings to cover three weeks of living expenses, with just one in five (21%) of those consumers able to fund $1,000 or more on short notice.
In addition to the financial challenges to afford basic needs, just over one-quarter (26%) of the unbanked admit that they do not have any means to pay for emergency expenses. When it comes to accessing emergency funds, the average underbanked American uses credit cards (58%, vs. 43% among the unbanked) and, more recently, stimulus checks (74% vs. 55%).
"While the pandemic has prompted many Americans to reevaluate their savings, we continue to see the greatest challenges impacting populations that do not have access to mainstream financial services and products," said Alissa Van Volkom, Head of Consumer Deposits, Products and Payments at TD Bank. "Maintaining a healthy savings is key to preparing for unexpected hardships, which reinforces the need for more accessible and inclusive account offerings and resources that support long-term financial wellness."
Social Media Emerges as a Potential Source for Financial Advice
From a change in work lifestyle to cutting down unnecessary expenses, the pandemic forced many individuals to re-evaluate and reprioritize how they deal with money.
Despite the belief that the pandemic urged more money-consciousness, the unbanked community still did not seek out external advice amid lifestyle and financial challenges. In fact, many underbanked (36%) and unbanked (44%) respondents shared that they do not receive financial advice. For those who did, the primary channel was from friends or family (27% and 25%, respectively).
On the other hand, social media proved to be an emerging source for financial advice, with more than one-in-four respondents (29%) from both underbanked and unbanked groups stating they are open to receiving advice via this channel.
Hidden Fees Remain a Top Concern
Despite banks shifting to help consumers during COVID-19, including waiving fees and suspending some monthly payments, fees remain top of mind among underbanked and unbanked communities. Nearly one-half of unbanked respondents cited high fees and hidden fees as their primary concerns (48% and 40%, respectively).
"The importance of a safe and affordable banking account has never been clearer than during the pandemic – but fear of fees can keep consumers from accessing mainstream financial products,” said Jonathan Mintz, President and Chief Executive Officer of the Cities for Financial Empowerment Fund. “We created the Bank On National Account Standards with this in mind, requiring low monthly costs and no overdraft or insufficient fund fees – and we are thrilled to Bank On certify TD Bank’s TD Essential Banking account."
Supporting TD Customers
TD Bank recently launched TD Essential Banking, a low-cost, no-overdraft-fee deposit account. Customers are able to bank with no minimum daily balance requirements. This account is designed to meet the needs of more customers, in more communities, by providing additional affordable access to mainstream financial services. For more information on TD's Essential Banking account, please visit our website.
In addition to the new account offering, TD Bank made changes to its overdraft policy. All TD deposit account customers will benefit from these updates, which went into effect at the beginning of August.
To best support customers, TD Bank is also expanding its suite of financial education tools, offering accessible and customized resources across a variety of important topics. This includes the addition of new content to the TD Bank Learning Center, which offers tools, resources and learning modules for managing money and reaching financial goals, including a student budget calculator and budget worksheet. TD will also incorporate financial education into its customer onboarding and retention programming, with plans to partner with TD customer service representatives to identify specific needs and deliver targeted resources to customers via SMS text message and other communication channels.
The study was conducted among a representative group of 1,002 respondents, 500 Underbanked and 502 Unbanked across the United States from July 16-22, 2021. The unbanked describes individuals who do not use banks or credit unions for their financial transactions and have neither a checking nor savings account. Underbanked consumers have either a checking or savings account, but also rely on alternative financial services. The survey was hosted by global research company MARU/Matchbox.
Maru is a world leading CX and Insights Software & Advisory Services company. Maru was founded to disrupt the data and insight delivery industry with a combination of Software & Advisory Services delivering data in real-time via a unique service model. Maru helps its clients make informed decisions in near real-time by combining proprietorial software, deep industry experience and access to the best minds in research. Maru’s flexible service model means our clients can choose to self-serve our Software directly to create, launch and analyze projects; or choose to utilize our Software with knowledgeable support from insights experts. Maru successfully delivers major national and international CX and CEM programs for Enterprise organizations.
About TD Bank, America's Most Convenient Bank®
TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S., providing more than 9.5 million customers with a full range of retail, small business and commercial banking products and services at more than 1,220 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Bank and its subsidiaries offer customized private banking and wealth management services through TD Wealth®, and vehicle financing and dealer commercial services through TD Auto Finance. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Twitter at www.twitter.com/TDBank_US and www.twitter.com/TDNews_US.
TD Bank, America's Most Convenient Bank, is a member of TD Bank Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD". To learn more, visit www.td.com/us.