What to Do if You Live in a Banking Desert

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Quick — where’s your nearest bank? If you would have to travel outside of your community to get to a brick-and-mortar financial institution, you may live in a banking desert. Described as an area that lacks traditional (that is, analogue) banking services, banking deserts complicate money management. 

What is a Banking Desert?

A banking desert is a geographical location that has no physical bank branches, ATMs, or other in-person financial institutions. According to the Federal Reserve, roughly 3.74 million people in the US live in one of these deserts.

Most banking deserts are located in rural areas of the country, where both amenities and neighbors are sparse. However, deserts have been growing in low-income urban communities and minority neighborhoods, as banks shutter branches due to underperformance. 

If you live in one of these deserts, getting to a counter where you can speak with a bank representative can be challenging. You may have to drive a few hours over to the nearest developed city, or you may have to navigate your city’s transit system to access another neighborhood. 

Banking in a Desert Comes with Challenges

Living in a banking desert comes with these two challenges:

1. Limited Access: Simply put, you might have trouble completing financial tasks, like depositing checks, withdrawing cash, or obtaining financial advice, if you live in a desert.
2. Alternative Financial Services: Payday cash advance lenders and check-cashing companies often set up shop in deserts, filling in the financial gaps left by shuttered branches. Unfortunately, these lenders often slap higher fees and interest rates on their services.

What to Do if You Live in a Desert?

Here are some tips on how to manage your finances, even if you live far from a physical financial institution.

1. Embrace Online Banking: Explore online options provided by banks, credit unions, and direct lenders. Many financial institutions offer user-friendly apps that allow you to check balances, transfer funds, and even deposit checks using your smartphone. 
2. Research Online Lending: Before you visit a local cash-checking service or payday lender, research online direct lenders and financial services like MoneyKey. MoneyKey is a direct lender and financial service platform that connects you with online loans that don’t require an in-person application. If approved, you can receive and repay your funds online, too. 
3. Use Digital Payments: Traveling to an out-of-network ATM wastes your time and costs you too much money. Consider creating a mobile wallet to include digital payment apps. With a flush mobile wallet, you can send and receive money without having to rely on traditional banking services. 
4. Boost Your Financial Literacy: Plenty of financial resources are available for free online. You can take advantage of these learning portals to educate yourself on topical financial issues. While it may take time and effort, this research can help you make informed decisions without an in-person meeting with financial advisors.

Don’t leave your finances high and dry, even if you live in a banking desert. Take advantage of online banking, lending, and payment apps to help you fill in the gaps left by in-person branches.