DEFINITION of 'Unbanked'
A slang term for people who do not use banks or banking institutions in any capacity. Unbanked persons generally pay for things in cash or else purchase money orders. Unbanked persons also typically do not have insurance, pensions or any other type of professional money-related services.
BREAKING DOWN 'Unbanked'
People can choose to be unbanked for many reasons. Criminals avoid using financial institutions because law enforcement officials can track their actions in their accounts. Older people who survived the Great Depression may have a deep distrust of all financial institutions and therefore do not use them. Extremely poor individuals may also have no need for the banking system as they try to survive their day-to-day lives.