Unbanking vs. Underbanking: How to Break up With the Financial System

(Psst: The FTC wants me to remind you that this website contains affiliate links. That means if you make a purchase from a link you click on, I might receive a small commission. This does not increase the price you'll pay for that item nor does it decrease the awesomeness of the item. ~ Daisy)

Breaking up is hard to do, especially when it is with a tracking service like a financial institution. Sometimes you can make a clean break and other times you have to remain “just friends”.

The US government actually has a name for people who have no bank accounts – they call these folks “the unbanked”.  The FDIC defines the unbanked as “those without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another.”  Another term is “the underbanked” – “people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked can be characterized by a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as check cashers, loan sharks and pawnbrokers.

According to the government, the above scenarios are crisis situations which must be rectified for “your own good”.  There is legislation on the table in many states to set up banking facilities for the unbanked and underbanked.  The assumption is that most folks who do not deal with a bank are too poor to do so.  This could be true in many cases: high minimum balances, bad credit history, NSFs, and account fees can all preclude having a bank account for those in difficult financial straits.

However, the government has a couple more reasons to insist that everyone should have a bank account:

1.)   Ease of confiscation

We need only to look at the horrible situation in Cyprus to see how bank accounts are like all-you-can-steal-buffets for the powers that be. A suggested theft TAX of up to 20% of the money in Cypriot bank accounts may be levied in order for the country to meet it’s staggering debts in the terms of the proposed EU bailout.  The banks of Cyprus are loaded with the money of residents and businesses of other countries that have used them as a tax haven.  The banks have been closed for several days and frantic customers are left to withdraw the maximum daily balances from ATM machines in an attempt to salvage what they can.  Many people fear the banks will never reopen their doors.

Think it can’t happen here?  I wonder if the people of Iceland, Greece, Ireland, Hungary, Argentina, Spain, and Portugal thought that too.

2.)  Surveillance

The second reason that “everyone should have access to banking services” is the digital trail that it leaves.  Every dime you receive and spend out of these accounts is part of an intricate system of surveillance.  When your money goes into a bank – any bank – Big Brother knows about it.  It’s a simple matter of compiling information via your social security number (or other federally- assigned number) to find out how much you make, how much you have, and where it comes from.  This can be used to prosecute you for tax purposes, to locate you through where your pay comes from, and to follow your personal money trail for a variety of different reasons.

It can also be used to track your spending – Big Brother can find out that you spent $2000 at a gun store, that you purchased online from a prepper supply website or that you bought some books with “questionable” content in order to paint you as a threat.


So, in this day and age, is it possible to get by completely without a bank account? It’s tough. Most work places prefer to pay through direct deposit. Many landlords, mortgage companies and finance companies do business through direct debit. You’re going to pay some steep fees if this is the route that you choose to go.  For some, it might be worth it, particularly if you only have a few transactions in a month.

Here are some places you can cash checks for a fee:

  • Check cashing depots
  • Some retailers like Walmart, 7-11, and some grocery stores (the number of these is dropping rapidly)
  • Pawn shops
  • The issuing bank will sometimes cash a check drawn from one of their accounts for a non-account holder
  • Some prepaid credit card accounts will accept a direct deposit (in my opinion, this is nearly as unsafe as having your money in a bank account)
  • Through a friend or family member’s account (also risky – for both you and the account holder)

Here are some ways you can pay bills without a bank account:

  • In person, with cash, cashier’s checks, or money orders
  • Through the mail, with cashier’s checks or money orders
  • Online, with prepaid credit cards
  • Through a kiosk using a prepaid credit card
  • At a check-cashing depot or retailer


Your next option is underbanking. For some people this may be the most realistic way to break up with their bank – it’s the “just friends” version. If you have a lot of transactions that go through your account every month, it isn’t necessarily practical to get rid of your account. Keep in mind that all of the above methods of unbanking still have a component of financial tracking. The checks and bills still have your personal information tied to them in most cases.

When you underbank, you still have an account. Set this up with the lowest possible fee and the lowest possible required balance.  Shop around to find the best deal.  Consider a credit union or community bank instead of one of the big mega-banks.  They are slightly safer, emphasis on slightly.

Your paychecks from work can be directly deposited, which will make your employer happy.  Employers rarely want to do something outside the norm, and if everyone else gets their pay directly deposited, writing a check for you will make you stand out – the opposite of what you want to do.  As well, any other checks you receive, like refunds, tax returns, etc., can be processed through this account.

The goal here is to keep as little money as possible in this account.  Banks are no longer the safest place to keep your money, and the .00001% of interest you will accrue is just not worthwhile.

Immediately upon payday:

  • Pay all your bills online or through a kiosk out of this account – rent, utilities, credit card payments (hopefully you don’t have those)
  • Buy necessities like groceries if you need to reduce the amount in the account for withdrawal purposes
  • Calculate the amount of payments that will be coming out of your account between now and your next pay (rent/mortgage, car payment, insurance)
  • Remove all money except that required for impending debits and your minimum balance.  Get it in cash.

Avoid Financial Surveillance

The government wants everyone to have a bank account for another reason besides quick accessibility for the purpose of thievery.  Big Brother wants to know what you earn, what you spend, and where you spend it.  Every penny you spend could one day be used against you, as more and more things become illegal in the police state that is taking over the western world.

Use your bank account as little as possible if you’ve chosen to underbank:

  • Buy stuff with cash
  • Skip registering your belongings by serial number for warranty purposes
  • For heaven’s sake, don’t get one of those “customer loyalty” cards that track every purchase you make and provide you with “rewards” or “points”
  • Buy from places that don’t track you, like yard sales, Craigslist, farmer’s markets, roadside stands, your brother’s friend’s sister’s boyfriend
  • Work for cash: this is another suggestion that won’t work for everybody, but if you can do some odd jobs for cash, even if you make slightly less money doing so, this is money that can’t be tracked.

Think about how your purchases tell a story about you that you might rather keep to yourself.  Are you buying lots of farm equipment, soil amendments and seeds?  Are you buying ammo every week?  Are you stocking away large quantities of food or medical supplies?  Have you recently purchased 2,347 books on different guerrilla warfare tactics?  OPSEC is more than just keeping your mouth shut about your prepperly ways.

Ditch the Dollar

Although you require some fiat currency to function in today’s society, as well as some in an emergency fund, consider using other forms of currency whenever possible.  The following suggestions won’t work for everyone, but some folks may be able to ditch the dollar in the following ways:

  • Engage in the barter system: trade goods and services with like-minded people.
  • Keep precious metals like gold and silver in a fireproof safe for your “savings account”
  • Immediately convert  fiat currency into tangible goods: food, ammo, home defense items, tools, etc.
  • Work towards self-sufficiency – if you buy less, you can earn less: grow your food, repair your own home or vehicle, do things manually instead of using expensive equipment, lessen your dependency on the grid
  • Simplify – this goes hand in hand with self sufficiency: find your entertainment from library books and online resources, skip eating out, take a walk instead of joining a gym – the less you feel you need, the less money you will have to earn.

The decision to un-bank or underbank is unique to every individual. The further away you can get from “the system” the more privacy and security you will have.  The suggestions above are not meant to be comprehensive – they’re meant to get you thinking about how you can disengage.

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Daisy Luther

Daisy Luther is a coffee-swigging, globe-trotting blogger. She is the founder and publisher of three websites.  1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty on her website, 2)  The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived, and 3) PreppersDailyNews.com, an aggregate site where you can find links to all the most important news for those who wish to be prepared. She is widely republished across alternative media and  Daisy is the best-selling author of 5 traditionally published books and runs a small digital publishing company with PDF guides, printables, and courses. You can find her on FacebookPinterest, Gab, MeWe, Parler, Instagram, and Twitter.

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  • Excellent article! I have just written a much shorter version to 2 people before I saw your article. I think I should tell them to go to your article. My DH & I have been downsizing our bank accounts for sometime now. I pay cash for as much as I can. We have been stock piling food, seeds, tools, gas and other necesities not to the extreme but to a comfort level. I try to remember the saying “2 is 1 & 1 is 0. We also keep enough cash to be able to buy a few things if something like Cyprus happens here.

  • Hey, I’m surprised that there wasn’t any mention of Bitcoin. Bitcoin is an online bank-free currency, a digital cash issued and secured by highly secure crytographic software, that has no central issuer, is semi-anonymous (it takes some tricks but it’s not hard to make it completely anonymous), and is becoming more and more widely used.

    With Bitcoin, you can send money to anyone anywhere for a very small fee (usually not much more than ฿0.0005), you can store the Bitcoins in a trusted online service, in you smartphone, in your desktop or laptop computer, or for additional security on a special offline-only computer or even with the access codes (called an Address and a Private Key) printed on a piece of paper. Because there is no central authority, inflation is very carefully controlled and predictable (with a maximum supply of 21 million Bitcoins), and there is no risk of anybody confiscating or freezing your money.

    Bitcoin is a good supplement to gold and silver, as it has many of their good qualities while adding a much higher level of liquidity; it’s very easy to send and receive Bitcoin. While purchasing Bitcoin on one of the many online exchanges can be tricky, there is also the website LocalBitcoins.com where Bitcoins can be purchased in face-to-face transactions with cash, in a completely “unbanked” manner.

    TL;DR Bitcoin is the digital anti-banking currency. Try it out. Go to WeUseCoins.org to learn more.

    • While Bitcoin is fine for anonymous purchases, I wouldn’t keep it as a long-term store of value. It may go up, and it may crash. I prefer something tangible, such as gold.

    • Hi Joshua.

      I left out Bitcoin because, call me old-fashioned, but I am not 100% sold on the concept yet.

      I think that it could be a good alternative to Paypal, for example, because no bank account would be necessary, but I would never leave an currency in an account like that. The reason is, the grid is a constant concern. It is very fragile. The internet is monitored more and more every day. I would not feel confident that I could access or use my Bitcoin currency when needed.

      This is just my opinion, of course – it could be the wave of the future. I think it is important for everyone to find the solutions that work best in their personal situations.

      Thank you for your input and for raising that important alternative. 🙂


    • I have, and recommend ‘Junk Silver’ as very negotiable form of ‘currency. We all, well most of us, know what a quarter, dime… look like and bags of these are available from lots of sources.

      • I was thinking of getting silver dollars – lots of them – is that a good idea – or is it better to get smaller coins?

        • Hi Jo ~

          Most people like to get a variety of coins to meet different needs – both large purchases and smaller ones. A lot of silver dollar is also a lot of weight – which may or may not be an issue, depending on your situation. I like to also keep some small coins that are less than one ounce for smaller purchases if disaster should strike.

          I hope this helps!


          • Thanks Daisey – is it a good idea to also keep paper money on hand or is that all going to be worthless – but silver coins will always have some value? Also the current coins being minted and given out by banks aren’t all silver – is that what is meant by junk silver?

    • Holy smokes… you must be very happy right now. I just looked up the price of Bitcoin on the date you posted and it was $71.50. And you probably bought in even lower than that. Congratulations!!!

  • We decided 2 years ago to unbank as much as possible. Amazing how hard this is to accomplish.

    We are currently at the ‘just freinds’ stage.

  • I don’t have value add here to help with your very clear and helpful information and insights, but I wanted to say thanks from a newby in the un-banking world. Most of all I appreciate your straight forward explanations and logical conclusions. I have felt that the strings used to tie us all into the center mass (government). It’s like standing on a dock with a big electrical storms looming in…….
    Thanks again,

  • My son is very good at working the Craigslist “underground economy”. He recently did some auto repair for me and I paid him in ammo.

  • Underbanking is easy when all you have is a checking account and you spend every dime that comes in keeping the lights on and fuel in the truck or the other bills paid. Life is funny that way, i figure its good though because if you dont own anything nobody can take anything. Like one of my buddies said, either you can make more or desire less, so i have taken that literally and am just desiring less, so far so good, hard to find like minded for barter though, but i think that day is coming to fruition sooner rather than later.

  • With all of the shenanigans going on in the financial markets and the miriade ways the retailers are finding to separate you from your dollars, it sems that the serious American has to rethink their way of living. Here are a few of my thoughts:

    1. Invest in your land and put a substantial home on it.
    2. Try to make sure that your land has room for your kids if they want to (or need) a place to set down roots in the future.
    3. Invest in the tools to work your land and make money for your survival and protect them by sheltering them and maintaining them.
    4. As soon as possible, invest in solar or other alternative energies to wean yourself away from the energy companies.
    5. Can, dehydrate and root cellar what you grow and harvest.
    6. I am not an LDS member but they have a religious tenet that I think is good. Keep a year’s supply of food and other necessities stored away for emergencies.
    7. Whenever possible barter instead of paying someone to do repairs for you.
    8. Build a close relationship with neighbors that you would trust with your life. It might become necessary to rely on someone else for help in an emergency. Pick those “certain” neighbors carefully.
    9. Teach your kids to survive on their own as soon as possible.
    10. Teach your kids the ins and outs of the financial realities of the real world and do it early.
    11. Above all, teach your kids that the only thing that really matters is family and that family is the utimate safety net.

  • I think a frenzy is starting, Cyprus didn’t take from under 100k savers, bit coins? who’s running that? Bernie ebbers . that may be corrupt when the chips are down. most folks are day to day with little extra to save.then if you want buy travelers checks or postal money orders, maybe even a cashiers or certified check to yourself,how long are they good? have to check, gold will get you mugged or robbed, ammo is good as hedge, someone will buy it with prevailing note.keep what you may need .as some said, accept less, utilize your home,number one!shop local if not GMO seeded, look at upc labels first digits are origin of country producers,01 is usa ect. china kills your pets, steals patents, bootlegs, counterfeit’s ,they never liked us!Ill kill you without firing a bullet! said krucheif from Russia,well if not Russia ,he gave the idea to china!open lots of non interest checking accounts. buy nice for your home,enjoy it for you,be practical don’t buy to impress, the model made for the one who thinks the price makes it better is a fool.in most cases.when I say you I’m saying also your loved ones, your world .it can be just you and a pet,spouse,or children .if money is flowing in beyond conservative needs,then invest in land or bullion or art.what else is their? Well their is your health and that’s important so don’t go cheap on the proper foods,booze or smoke!

  • I see your point and somewhat I agree that it’s a good idea not to keep all your eggs in one basket and on the other hand I am conflicted. I want to be loud with my purchases and my choice to choose organic over gmo, solar instead of gas, local instead of chinese. And if I am just a number and they want my money they shoul be the one to jump onboard. But we should not be hiding. Yes, we should pull out cash if we have it, watch our money, grow our food and become self sufficient instead of relying on the government to feed us.

  • we should all be saving change, especially nickels. it is a much more acceptable form of currency for the near future.

  • I have a question???? We have an account that paychecks go in, I pay the bill etc. Only enough left to keep the account open. BUT I also have an account where I am saving for a down payment on property, it is a large amount. What do I do with this??? how would I take it out and keep it? I don’t know how to work this… Nice article but what do we actually do???????? And then how would we pay for the down payment; if say, it was gold????? I don’t get it!

    • Hi Katie. First, let me preface this with the fact that I am not a financial advisor. If you were to put your savings into gold or silver, when the time came to put the downpayment on your home, you’d have to transfer those back to fiat currency. This is rarely a problem, but you do have to watch the market in order to get a good rate of exchange. For example, right now, gold is low, but it will likely go back up again soon.

      As far as keeping it in your bank account, my concern is that it has been the savings accounts that were tapped first in the countries where financial confiscations have taken place. I don’t have a lot of money, but what I do have is not stored at the bank. Many people invest in fireproof safes, sometimes more than one, in which to keep their currency. You are in a difficult situation right now, because soon you’ll be changing that into something tangible (property). It’s just the point before you do that which is challenging.

      Best wishes – I truly wish I could give you a more specific answer than this. Hopefully some other readers will chime in with solutions that have worked for them.

      ~ Daisy

    • Most of the time when you purchase property, the institutions that are brokering the transaction will want to know where your funds came from. This is called seasoned. The best thing to do with these funds are to make sure they are in a stable institution where you have the supporting documentation for these funds. If its a very large amount consider splitting it into smaller amounts at different institutions for diversification until such time that the money is needed.
      They would not look to kindly if you were to bring a suitcase full of cash to closing either, they would consider your actions questionable then.
      So, split it into smaller amounts at a number of smaller institution and credit unions until you are ready to make your purchase. Also avoid CD, and Money market accounts you will want the funds as liquid as possible.

  • Hi Daisy,

    I hate the banking system, though I have a bank account. For years I’ve wondered about switching to a credit union. I think I’ll look into how they differ from a bank account and maybe switch to one. An account really makes paying those monthly bills easier.

    This may sound a foolish question, but are TFSAs equally unsafe as other types of savings accounts?

    Someone here said PayPal requires your bank account information. I have a PayPal account and used only a credit card to open it. I would not have joined PayPal had they demanded my bank account information. PayPal is one of the few things I use a credit card for. In my everyday life I prefer paying for things with cash. Seeing that money leave my hands is a reality check on how much I’m spending and helps me spend more wisely.

    • In my opinion, if it is in the bank and not in your hands, it isn’t safe. I realize that sometimes people are forced by employers to keep money in pension funds, etc., but if you have the option of NOT having your money in the bank, in my mind, it is the best choice.

      Keep in mind that I have absolutely no professional experience in banking or finance. This is a layperson’s point of view.

      ~ Daisy

    • Leaving your cash in control of the bank means that they can take it any time the stakes are high enough. If you are saving for a downpayment, converting your chunk of cash into something like silver or gold would not be a good idea. Moving value between mediums is sometimes costly, meaning, you have to shave a little bit each time you move. The dollars to gold ratio may be low when you need to cash out, who knows?

      So, simply put, if you’re saving for a downpayment, take the cash home and hide it. A fireproof safe in a strange location doesn’t cost much. However, beware: to get your cash out, you cannot just take it all out. It sets off alarms and raises red flags. Get stopped by the cops on the way to your safe with, say, $10,000 and they promptly steal if from you to but more Toys for Tyranny. Better move it out over time in smaller chunks. Hold it in $100 bills until you need it and Keep adding to it.

      I’ve been “UnderBanking” for over 30 years. Nobody holds onto my money. I deposit what I need in the checking and the rest goes home. Up until recently (last 5 years) I was not worried so much about them stealing it, rather, it was the fact that FRACTIONAL RESERVE BANKING IS FRAUD AND CRIME! I REFUSE TO PARTICIPATE ANY MORE THAN I HAVE TO! So, 30 years ago I made a promise: Use the banks, not let them use me. I’ve done the same with credit cards and loans. But, lately, theft by bank is a reality. Having large sums of money in the bank post Cyprus is a really, really, REALLY bad idea. GET THAT MONEY HOME!

      Good luck!

  • You can also buy “gift cards”, for specific stores or Visa/MC type that work anywhere, that don’t have identity associated with them.

  • You can get a loyalty card… just don’t put a name on it, or put in a false one. If you do this, only use cash when using the card.

    I have a Brookshires card (I live in a small town, Brookshires and Walmart are the only two sources for groceries), and when I get my reciept, it says “Thank you Household”. I have a CVS card that behaves similarly.

    I use cash for the vast majority of my purchases, except for my Mortgage, Utilities, Netflix, and Internet service. I use online “bill pay” for those. I am not really losing anything there. The government knows I have a house. The city government runs the utilities. AT&T is in bed with the government, and Netflix will let them know I enjoy “Breaking Bad” and “Film Noir”… and I don’t care who knows that 🙂

  • Yes, I agree with the gift cards. If you frequently shop, for instance online, just go buy gift cards at a merchant (there are many). You can get them in up to $100 denominations. Just have a few on hand or after you put items in your cart, go buy the amount you need. This also gives you time to think about your purchases. You may decide you don’t need one or more of the items after all.

    Walmart charges 70 cents for money orders. For large check payments such as paying mortgage, this is reasonable. I am also working on going bankless as much as possible. I don’t know if I can get rid of my credit union checking and savings completely but other banks, credit cards, and debit cards is a good start to eliminate.

  • Nice try, but you live in a fantasy world. Drawing all cash out at once will draw attention. Back in Bush Sr. a bill was passed in which anything above $10,000 a day withdrawn or added to your account is investegated and would put you on a list. People on pensions MUST accept their money by direct deposit. I could go on but do not have the time. It will also cost you tremendous amounts of time to do all the things you will need to do to exist and there are many places you cannot pay cash for purchases unless you follow some of the below.

    It is best to withdraw over whatever period possible and spend the monthly income paying bill is you have any.

    The way diminish bill paying IS THIS: Install Geothermal/solar HVAC an or SUNGAS, all of which, you pay no one for utilities . Buy an electric car and use your HVAC to fuel free. Live in the country far from civilization or another nation. Get a hunting license and eliminate paying for meat, or by your meet/fish in lump sums and freeze. Create your own water system. When you buy a lot buy up its mineral oil gas rights also. Or buy a rocket ship and file to another planet hoping you can breath there. Or become a criminal working for Washington and your stay here will be shorter by far.

    You hopes are great, but one needs to make money in the stock market and for that you need to make frequent deposits often to short the DOW with and to overcome the loss of Interest on savings. Having a job is not helpful for what you want to do, nor is having children. In short you are better off moving to Sweden, Norway or Denmark where you can do many of the things you want and which I am doing now.

  • This lifestyle is easier if you work for yourself and/or if your customer or employer uses a small local bank. Accept cash or “only checks that are drawn on a friendly local (small) bank”. Take the customer’s (or employer’s) check directly to THEIR bank, that is, the bank it is drawn on, to cash it (the same branch as the customer has their account at is best so their “signature card” is available on file at that branch to prove that it is a genuine and valid check). They will be a local bank, know their customer personally who issued the check, and can even call them to verify it. They cannot charge you a fee for cashing it, it is their customer’s check drawn on their bank. They cannot put a “hold” on it or make you wait for all or part of it: YOU are NOT a customer of their bank. You DO have to show them current valid legal photo ID and they record that info. They may even take your fingerprints? The bank HAS to cash that check for the full amount IF the customer’s checking account can cover it. You do NOT have to have or open an account there. You DO NOT have to accept a cashiers check as all or partial payment of it. Large nationwide banks like to act as though you are doing something wrong or criminal when you do this(you aren’t!). Some may ask for YOUR bank info, but that is not a legal requirement. Show them a prepaid debit card if they insist on seeing more than just your state PHOTO ID (driver’s or ID card or even a US passport, if you have one, it is all that you legally need..). Their credit checking system is probably doing an electronic “search for criminal wants or warrants statewide” check on you, while they are making you wait, if they don’t know you (so be sure you don’t have any of those…).

    To pay any mail-in bill? just go to a US post office and use cash to purchase a US Postal Service Money Order (for a $1.-$2. fee charge) This is as good as money anywhere in USA. Be sure to fill it all out correctly and SAVE your receipt for purchasing it. If anyone tries to say later that you didn’t pay them? Take your money order receipt to any post office to get a record of it being paid, when, and to whom.

  • A couple of updates:

    The banking system is also being used to cut off services to non-politically approved businesses. Recently this has included some gun dealers and growers of legal medical marijuana. Whether some other politically incorrect business you want to conduct might get the banking / federal hammer is unknowable.

    Secondly, this last fall (2018) a UK service, in partnership with MasterCard, has opened up services in the US as well. They provide a debit card that is backed by whatever fraction of gold bars stored in Swiss vaults you care to purchase. It’s well worth looking over their website at


    It’s a way for people of many different wealth ranges to protect their cash holdings from dollar devaluation without having to carry around precious metal coins or bars — that are usually inconvenient for small purchases. As with all charge cards, when power goes down, so do they — hopefully for a very short time.


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