AA_CPA

Hi All! New to FT, but already addicted...
Question for those of you who have recently used BankDirect's miles checking account: are there any doubts of legitimacy? I'm thinking of trying to get 100k miles per year out of that, but after all those Ponzi schemes, I not only think twice, but thrice, and am concerned since I'll be transferring a large amount.

Cheers in advance!

bigbootch

short answer: no. as long as you keep under the FDIC limit, you will be fine.

edit: i meant "no" to the question "are there any doubts of legitimacy?", not the subject "is bank direct legit?" bank direct is a legitimate, FDIC-insured bank, and as long as your deposits are under the limit (and as long as the FDIC remains solvent) you will not lose money. now, whether the FDIC will remain solvent is another legitimate question, but i think we can safely assume "yes" for now.

AA_CPA

Thanks for the reply! I searched for BD at the FDIC website, but only could find a couple documents that alluded to them....

Does anyone currently hold an account with them, and does everything seem copacetic?

saint

Yep. They are totally legit.

They are a division of Texas Capital Bank. You can look them up on the FDIC website.

http://www2.fdic.gov/idasp/main_bankfind.asp


I've been banking with them for many years. They've always been pretty good. Their website isn't the best but their customer service is pretty good.

Just make sure not to put in more than the FDIC with ANY bank these days.

susaboo

I've had an account with them for several years, first for the miles, but later mainly for the fact that they have no foreign exchange fees. They're legit, as much as any bank is.

rrgg

I've also been using them for several years. No problems. If you search for "bankdirect" on here, you'll find more discussion.

mrpickles

I deposited $250k with them and have been getting 25K miles monthly depositied to American Airlines AAdvantage without any problems.

rrgg

I still have referrals available too.

gleff

We all have referrals available. I've never seen BankDirect actually cap the number of referrals a person can have, though I seem to recall a statement to the effect that there was a cap years ago when I first signed up. I have successfully referred probably 25 people and gotten the miles for doing so.

BankDirect is totally legit. I've earned over 150k miles with them. And I don't purposely deposit large amounts of money with them. But I do want up with some large balances when I cash expense reimbursement checks, before my credit card statements are due.

This is a great deal when interest rates are low, the miles aren't taxed but interest is (the account pays de minimus interest).

When rates are higher you can certainly do better with funds elsewhere. But as a checking account it's great.

The only time I don't recommend htem is if you can't be certain of your $2500 minimum balance to avoid account fees..

gleff

Oh and I do like that they reimburse out of network atm fees (in addition to not charging fees of their own)

rrgg

Maybe so, but this summer I asked BankDirect about this and they restated the limit of 10 referral bonuses.

gleff

Just keep referring people and see what happens

I don't think their computer system considers me special

Alfonso XIV

I've had accounts with them at various times over the last 5 or 6 years. I never used them for anything other than building up AA miles, and their basic services and telephone personnel were always professional. Over several years I've probably received over 500,000 miles from BankDirect accounts, without any hitch or problem.

And to confirm another poster's information, the bank is listed on the FDIC website under the name Texas Capital Bank, in Dallas.

Under current regulations a single account holder is FDIC insured for a maximum of $250,000, an amount which could yield 300,000 miles and $125 in cash interest, annually. If two people open a joint account, their account is FDIC insured for up to $500,000, an amount yielding 600,000 miles annually.

As for evaluating what the "effective" interest rate of the miles-account is, we all have our own utility function. But given the current .05% account rate, the composite rate (including the value of miles) ranges from 1.25% (for 1¢/mile valuations) up to 6.05% (for 5¢/mile).

uiucsb

Hello everyone. I've learned much from FT and appreciate the dedication of all contributors.

I'm interested in BankDirect as a source of AA miles. Below are two formulas for calculating the "rate of return" and cpm for a year's deposit at BD in the checking account. The formula assumes that rates are low enough that the APY and actual rate don't cause the balance to diverge from simple annual calculations. The cpm is calculated by dividing the reduced earned interest by the number of earned miles. Do I have everything correct? Am I missing anything? Thanks much.

RoR: (value of miles)(0.1)(12)+(TaxRate-1)(Missed savings rate - BD savings rate)

Value of miles = How much you price your miles (1¢/mile, 5¢/mile, etc.)
0.1 = the rate BD gives for miles per dollar
12 = 12 months in a year
TaxRate = Tax rate for the interest you're not paying tax on
Missed savings rate = savings rate you could get in another account
BD saving rate = 0.05% as of Dec 18

cpm: (Missed savings rate - BD savings rate) / (0.1)(12)
(including taxes would decrease the cpm)

Assuming a difference of interest rates of 0.45% and a tax rate of 37%,
RoR = 0.92% and cpm = $0.00375/mile = 0.375¢/mile

superspudbucket

Thanks for the feedback. I had been wondering the same thing so it is good to hear the positive reviews.