Yeah - 10 months. Good luck with that.

One issue, here, is that the FDIC only insures each person's account up to $250K, AFAIK. There are ways of doing joint things, I think, but there's definitely the potential for loss here.

Guaranty did go under, and they had offered AA miles. Not sure if anyone wasn't made whole, but it's something to watch for.

altho BD has no limit on mileage checking account amounts, considering
current banking macro environmnet (as our CPA recommmended) would not deposit more than FDIC insured (i.e.,250,000) per account..up to Dec 2013 when the FDIC
insured amount reverts down to $100,000. Thus, BD limites you
to two accounts, or $250K per account if you want your deposits insured.

LOL.. just like something a flyer talker would say.. ;)

I think Citibank has the best deal;)

i would never suggest someone exceed fdic insurance. you are correct if you the account is titled sufficiently you will have have insurance.

that being said, bankdirect still limits to 2 AA checking accounts i think. so you can have one in your name and one joint.

these AA savings/checking accounts are only good in an environment like this one. when rates go up they become far far less appealing.

when i see CD rates for 1 year 2.5%+ it makes my choice harder. were still probably a year or so away from this.

For the record, I don't need the million for 10 months -- I already am part way toward lifetime gold.

Maybe I'll try coupon connection, since you guys are no help.

W: $1 million in my account for 5 months. H: Drink coupons.

Yup - I can't see this being a wise move at all, save for the exceptionally low current interest rates. I'm pretty sure I'll jump ship when rates go up, assuming I'm not about to cross a 1MM threshold or anything.

OK, OK. I'll do it.

I did some calculations way back, and it looked like the APR needs to be more than 4% for me to move my funds out of Bank Direct checking and be worthwhile.

And to be reasonably safe, the max amount you should put into the Bank Direct is $750,000 for a married couple. 2 individual accounts and 1 joint account.

LOL :D:D

+1 LOL:D:D

It can be much higher than that. The basic formula for the taxable equivalent yield would be (int rate paid by BD) + (your personal value for AA miles) * 1.2 / (1 - (marginal tax rate)). So, under the current situation of BD paying 0.05% and if you valued AA miles at $0.03 each and your tax rate was 25%, then the BD acct is paying a taxable equivalent yield of 0.0005 + (.03) * 1.2 / (1-0.25) or 4.85%. You'd have to have an option that pays 4.85% taxable yield with no risk in order for it to make sense to switch.

Consider a situation where you valued miles at $0.05 and your tax rate was 35%, which is not at all unreasonable. Under that circumstance, the taxable equivalent yield is 9.28%. There probably hasn't been a zero-risk investment that paid that amount in the past 25 years, and I suspect it's going to be awhile before there is again. If the top bracket goes back up to 39.6%, then the equivalent yield hits 9.98%.

The risk is in:

a) getting the seats on AA

b) AA not devaluing the miles

c) (potentially) AA going bankrupt

etc.

For me, anyway, 3c is too high. I'm using 2c for my calcs, and it's still clearly worthwhile. And I live in CA, so my tax rate . . .

Actually, my calculation's pretty simple.

It costs around 2.5 cents a mile to purchase the miles from AA and throw in the 35% tax rate or so
and I should be making more than 4% interest for me to switch from Bank Direct.

2.5c sweet spot
 

I would never buy miles for 2.5c from AA, don't forget the tax on top.
I can get 2% cash back from my schwab visa or get 1 SPG for each $I spend.
That means that if I transfer SPG to AA, I can get AA mile for 1.6c each.
So anytime I choose to get miles instead of cash back, I AM BUYING miles for 1.6c

So assuming 1.6c after tax cost = 2.5c Pre tax cost.
I have my money in 2 year CDs paying 2.5%.
If rates drop, I go with BD, if rates increase, I go with CDs.

I am tempted to take money from my home equity line at 3.25% to put in BankDirect, but after a while (much as I like the 2MM status) it is not worth it.

100k equity line = 3250$ pre tax cost, or 2000$ after tax cost for 120k miles = 1.7 cpm > cost of AA miles by just using credit card for purchases.
Although the difference is only 0.1cpm = 1c/10miles, or 1$ per 1000 miles or a total additional cost of 1000$ for LEFETIME PLATINUM and 4 VIPs.

Wait, this is too tempting! But the best is over. MINT COINS, online Citi SAVINGS ACCOUNTS, where are you when I need you?