Programs: AA PLT; UA 2P; disillusioned SWA RR member
Posts: 5,319
Is BankDirect still worth it?
I've had a small amount of money in a BankDirect "mileage checking" account for a few years now. Back when savings/checking accounts were paying 1-2%, the BD 0.75%/year+1.2 miles/year/$ option was very attractive. But now you can easily get 4.5% interest on savings and money market accounts, making the BankDirect opportunity cost much higher -- I am basically "buying" 1.2 miles/year for 3.75 cents/year.
Is it time for me to close the account? Why hasn't BankDirect increased their interest rates on this account? If they were making money when the spread was 1%, they must be buying miles from AA for less than 1 cpm. So I'm feeling a bit gouged.
Location: Austin TX, AA Platinum for life (who will live longer, me or AAdvantage?)
Posts: 424
I've kept my Bank Direct account opened and use it to do my bill pay online. I don't keep the majority of my money in that account anymore due to higher interest rates at Emigrant Direct. The convenience of having Bank Direct is still worth it for me, but not really for accumulating miles at the cost of ca$h.
The other thing I do like about BankDirect is that they don't charge the fee on foreign ATM withdrawals that my other bank, National City, does. It also works well as DH is currently living several states away and it is an easy way for him to obtain cash should he need to (assuming that he's somewhere that doesn't take a mileage/point CC, of course)!
I've had a small amount of money in a BankDirect "mileage checking" account for a few years now. Back when savings/checking accounts were paying 1-2%, the BD 0.75%/year+1.2 miles/year/$ option was very attractive. But now you can easily get 4.5% interest on savings and money market accounts, making the BankDirect opportunity cost much higher -- I am basically "buying" 1.2 miles/year for 3.75 cents/year.
Is it time for me to close the account? Why hasn't BankDirect increased their interest rates on this account? If they were making money when the spread was 1%, they must be buying miles from AA for less than 1 cpm. So I'm feeling a bit gouged.
I have an INGDirect savings account that is linked to my BankDirect account. I can send you a link to set-up a new account (paying over 4%) and you will get a $25.00 new account bonus. Let me know an email address I can send the invitation to.
I have an INGDirect savings account that is linked to my BankDirect account. . . . set-up a new account (paying over 4%) and you will get a $25.00 new account bonus.
When you say the ING account is linked to the BankDirect account, does this mean that the ING balance earns miles?
When you say the ING account is linked to the BankDirect account, does this mean that the ING balance earns miles?
I also have an ING/Bank Direct link. It is not possible to earn miles on funds at ING, though. By "linked," I believe the author means that you can transfer funds from one account to the other and vice versa. It would be a great deal if you earned miles on ING, but sadly, it's not possible.
I think the OP makes a great point about the widening discrepancy between the interest paid by Bank Direct and market rates. I am only keeping the minimum in Bank Direct right now to avoid fees ($2,500) and earning 250 miles per month on that. Not that great, but sometimes I can refer a friend to Bank Direct and pick up a 1000 miles so I keep it around.
Does anyone know if you can cancel Bank Direct and sign up again to receive the initial bonuses a la AA Citibank offers?
I opened an acount several months ago when we were in the process of selling a house and then buying another one, just to have a worthwhile place to park it for a while. They give you a 1k bonus for opening an account and another 5k bonus for having your paycheck, etc direct-deposited.
It worked out great for me- within a few months I had around 50k miles just from them.
I've had a BD account for a few years now too and it was an easy decision when I opened it based on the abysmal rates offered elsewhere.
My current decision is to keep the account as my "savings" account. I ran the numbers of what my principal would get with a 5% rate (minus the taxes) vs the miles I would get from BD. Basically it was a wash in terms of what I use my miles for - I would either get the $$ from interest at a "real" bank that I would then spend on an "I" international fare or I would earn the miles from BD that I would use for an int'l J award ticket (based on yearly numbers).
The factor which swayed me over to keep BD is that these miles go towards lifetime status. So others mulling this over might want to consider, not only how they use their miles but also, how large their desire is to be a MM (or 2MM - as the case may be). As for me, I have about 940,000 Program to Date Miles so I'll keep BD for atleast a little while longer (so I can add MM to my FT name. )
And great point raised that with the increase in rates at other banks that BankDirect should increase either their miles offered or rates. That sure would be appreciated.
My current decision is to keep the account as my "savings" account. I ran the numbers of what my principal would get with a 5% rate (minus the taxes) vs the miles I would get from BD. Basically it was a wash in terms of what I use my miles for - I would either get the $$ from interest at a "real" bank that I would then spend on an "I" international fare or I would earn the miles from BD that I would use for an int'l J award ticket (based on yearly numbers).
Another difference being that the purchases 'I' ticket could help you on your way to EXP, as opposed to the J award that earns no miles...another consideration for some.
Another difference being that the purchases 'I' ticket could help you on your way to EXP, as opposed to the J award that earns no miles...another consideration for some.
Cheers.
Good point brp - thanks for bringing this up...
This sure is a decision with many factors involved -
Regarding earning EQMs - since the copay was hoisted upon us I've changed my habits. I had been buying coach tix and upgrading with miles for my 3x a year trip to Rome. Then I'd usually have a couple of trips to JFK or HNL and that's how I've requalified for Platinum the past couple of years. But this year I used miles for outright award tix for two of my Roman holidays (just couldn't stomach paying that @#&*ing copay) - and so I'm not going to requalify. (I know I could do MR's but my budget is stretched thin already). So that's why I though getting lifetime status, even just Gold, would be a good idea..
Anyway... thanks for bringing up this other major consideration. And thanks LRD for your suggestion. I'm totally unfamiliar with UFB but I'll look into it. And I'll stay tuned to read what others here are doing - you guys are my teachers!
I've had a small amount of money in a BankDirect "mileage checking" account for a few years now. Back when savings/checking accounts were paying 1-2%, the BD 0.75%/year+1.2 miles/year/$ option was very attractive. But now you can easily get 4.5% interest on savings and money market accounts, making the BankDirect opportunity cost much higher -- I am basically "buying" 1.2 miles/year for 3.75 cents/year.
Is it time for me to close the account? Why hasn't BankDirect increased their interest rates on this account? If they were making money when the spread was 1%, they must be buying miles from AA for less than 1 cpm. So I'm feeling a bit gouged.
there are other types of accounts the money market is at 4.25% but you only get 50 miles per 1000.
so which one is worth it more for our money? I am thinking to deposit 10k into the BD Account (so I can earn miles - towards lifetime status too, but I am just a begginer). Since I don't fly that much YET...so it will be hard for me to earn the MM status the hard way, i figured this is a good way for me to earn miles without spending money (on top of my AA Person MC spending) If I do the checking for 10k for example, do I get 1000 miles per month as interest? do i get any other money interest? are there caps for earning miles for the account?
I am desperately to look for replies...feel free to PM me on how to max-out my mile earning experience and of course, you can refer me too!
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