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Ways Around FDIC limit @ BankDirect (AA Miles)

Ways Around FDIC limit @ BankDirect (AA Miles)

Old Aug 7, 03, 1:09 am
Original Poster
Join Date: Aug 2001
Location: Tha OC
Programs: Outgrew all status except AA: Plat for life (the program's); Costco: Ex Plat
Posts: 560
Ways Around FDIC limit @ BankDirect (AA Miles)

I like earning AA miles with my BankDirect acct.

Two questions:

1) Is there a way around the 100K FDIC limit? My understanding is the limit is applied PER DEPOSITOR, not PER ACCOUNT. So joint accounts usually will not work. How about a trust account? Can it be set up easily (i.e., without lawyers)?

2) If answer to #1 is no, what is the real risk of going over the limit? How effectively can I research the bank's likelihood of going belly up? Back in the S&L days (80's), some Chicken Little prognosticators were claiming that even FDIC insurance might not protect against widespread bank failures.

I really want to earn a ton o' AA miles -- at least until I'm lifetime Plat. I'm hoping there's a solution here because it's the easiest way I know to earn 10K's of miles per month.

Please don't try to talk me into trading miles for actual interest, 'cause "there ain't none here". I like miles.

Podcat is offline  
Old Aug 7, 03, 1:15 am
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Join Date: May 1998
Location: London
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I believe that the Federal Reserve WWW site has information on bank capital adequacy. You can also check with various credit rating agencies about the bank's strength, and make your own risk assessment.
chalf is offline  
Old Aug 7, 03, 1:48 am
Join Date: Jun 2002
Location: SFO/JFK/DRO
Posts: 273
Below is a link to a FAQ on the FDIC's website, which explains a bit about joint accounts and testamentary trust accounts, which you might be able to use to get as much as $600k covered. Hope this is helpful.

DaveSF is offline  
Old Aug 7, 03, 5:45 am
Join Date: Feb 1999
Location: Denver CO
Posts: 3,660
I suggest you stick to figuring out the FDIC rules.

I wouldn't tackle analyzing a bank's financial records to see if it is solvent in order to get FF miles. Enron and Worldcom went from top companies to worthless in days with the whole financial world watching over them. A small bank about to topple over is even less likely to be wearing identifiable red flags.

[This message has been edited by Mountain Trader (edited 08-08-2003).]
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Old Aug 7, 03, 6:51 am
Join Date: Mar 2000
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[This message has been edited by scruffy (edited Dec 15, 2003).]
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Old Aug 7, 03, 11:53 am
Join Date: Oct 2000
Location: Bartlett, TN (MEM)
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Back in Nov of 2001 a loacl bank that I was using for my secondary checking account got taken over by the FDIC. I did not have over 100,000 in that bank, but there were many in my town that had several million dollars each deposited there. They were wiped out. I think they may have gotten 50 cents on the dollar. Many of them were senior citizens and that was their entire savings. So it does happen and I would at least acknowledging that it could happen and then decide how worried you are about it happening.
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Old Aug 7, 03, 12:37 pm
Join Date: Apr 2002
Location: Pennsylvania
Programs: HHonors Silver
Posts: 4,030
From the FDIC:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">A co-owner’s funds in joint ownership accounts are insured up to $100,000, separately from any single ownership or other types of accounts of the owners if each co-owner:

• has equal withdrawal rights to the account, and

•personally signs an account signature card.

Personal signatures are not required if the account is a certificate of deposit, a negotiable instrument, or is set up by an agent.

If these requirements are not met, the account will fail to qualify for coverage under the joint ownership category, and will be insured as the single ownership funds of the account holders.</font>
So opening an additional joint ownership account (a real one) is a way to go above the $100,000 limit at one institution.

But you are correct that all funds owned by one person and deposited in single ownership accounts in an insured institution are added together and insured up to $100,000.
pdhenry is offline  
Old Aug 7, 03, 2:40 pm
Join Date: Jan 2003
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Posts: 2,849
If you do an inquiry into Bankdirect and are having a hard time looking for it under that name, look under Texas Capital Bank (as they operate Bankdirect).

Just thought I'd pass that tidbit on.
MeLike2Travel is offline  
Old Aug 7, 03, 9:16 pm
Join Date: Nov 2000
Location: New York City, United States.
Posts: 2,415
BankDirect AAdvantage Program
Now you can earn miles on an activity you do every day -- banking! BankDirect, the fastest growing online bank, is the first Internet-based bank to offer customers the benefits of the AAdvantage program. Bank with BankDirect and earn miles on FDIC-insured checking accounts, money market accounts and CDs -- with the convenience of anytime, anywhere access to your account information.

Earn AAdvantage Miles with BankDirect
Earn miles when you open BankDirect Mileage Checking, Mileage Money Market Accounts, and Mileage CDs. Earn miles maintaining monthly account balances. And earn more miles using BankDirect services, like direct deposit and bill pay!*
Refer-A-Friend Program
1,000 miles to convert your Regular Checking or Regular MMA to a Mileage Checking Account or Mileage Money Market Account
1,000 miles for each new Mileage Checking Account or Mileage Money Market Account
5,000 miles for signing up for payroll direct deposit into a Mileage Checking Account
2,000 miles for using BankDirect's bill pay service for 12 consecutive months from a Mileage Checking Account
100 miles a month for every $1,000 maintained in a Mileage Checking Account
50 miles a month for every $1,000 maintained in a Mileage Money Market Account.
1,000 miles for every $1,000 spent on a 2-year Mileage CD purchase
500 miles for every $1,000 spent on a 1-year Mileage CD purchase
250 miles for every $1,000 spent on a 6-month Mileage CD purchase
*Mileage offers available on applicable accounts onl

[This message has been edited by writetorich (edited 08-07-2003).]
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Old Aug 8, 03, 4:20 pm
Join Date: Jun 2001
Location: Atlanta, GA
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A CD in the your name with a specified POD (pay on death) is another way to insure an additional $100,000.
Georgia Peach is offline  
Old Aug 8, 03, 8:02 pm
Join Date: Nov 2002
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Posts: 3,166
You are concerned about protecting hundreds of thousands of dollars and are relying on free advice of FT?

[This message has been edited by VPescado (edited 08-11-2003).]
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