White Americans Have Bank Balances Up to Six Times Higher Than Minority Groups

A recent study of the American Economic Association (AEA) has uncovered significant disparities in financial security across racial groups in America. In 2022, the median transaction account balance—a category that includes checking accounts—was $12,000 for white Americans. In stark contrast, Black and Hispanic account holders had median balances of just $2,100.

The Federal Reserve’s ongoing survey, which has gauged American adults’ financial well-being since 2013, revealed that these bank balance disparities correlate with varying levels of perceived financial security. In 2022, 84% of white adults felt they were at least “doing okay” financially. In comparison, only 64% of Black adults shared this sentiment, despite an increase to 68% in 2023. Interestingly, 77% of Hispanic adults felt financially stable in 2022, but that number slightly dropped to 76% in 2023.

The survey also highlighted the impact of variable income on financial security. While 26% of white adults experience variable income, only 8% report it as a hardship. For Black and Hispanic adults, the situation is more precarious. About 30% of Black adults and 35% of Hispanic adults have variable incomes, with 11% and 16% of them, respectively, experiencing financial hardship as a result. This instability contributes to challenges like not being able to pay bills on time—31% of Black adults and 27% of Hispanic adults faced this issue, compared to just 11% of white adults. Furthermore, 10% of Black adults and 13% of Hispanic adults admitted they sometimes lacked enough food in the previous month.

Despite overall economic gains, racial disparities in wealth remain deeply entrenched. Between 2019 and 2021, Black and Hispanic families saw substantial increases in household wealth—from $15,300 to $27,100 and from $34,400 to $48,700, respectively. However, white families still far outpaced them, with wealth increasing from $203,200 to $250,400.

The reasons behind these disparities are complex. For Hispanic families, relatively recent immigration and the challenges of building wealth in a new country are significant factors. For Black families, historical systemic barriers, including slavery, segregation, and ongoing discrimination, have severely limited opportunities to accumulate wealth and achieve financial stability. Overcoming these deeply rooted disparities remains a daunting challenge, the study reveals.