## Forum

Bankdirect: The bes...

Share:

# Bankdirect: The best kept secret to getting AA miles?

Page 1 / 19
(@noam)
Silver

I know lots of people use Bankdirect to earn the free mileage bonuses, but I thought I would share my math on why it makes sense to actually keep money there...

Let's say that right now you get 1.5% APR from your US bank account (btw... PM me if you do with details :)).

If you put \$2500 in your account and left it there for five years, you would have \$2693 pre-tax. If you were at a 25% effective tax bracket, you would have \$2652 net of taxes. If you put that same \$2500 in Bankdirect, you would have earned 15,000 miles over the five years.

15,000 miles at a cost of \$152 is \$0.01/mile. Hard to beat that!

** EDIT **
Potential Fees
I did the math off of \$2,500 because below that there are monthly fees. If you can't keep \$2,500 in your account, this isn't the account for you. There are also fees for accounts kept open for too short a time. Their full list of ancillary fees is listed here. Thanks to Bluto and Biu for their suggested updates.

Posted : February 5, 2011 2:56 am
(@gemac)
Silver

noam, post: 1705 wrote: I know lots of people use Bankdirect to earn the free mileage bonuses, but I thought I would share my math on why it makes sense to actually keep money there...

Let's say that right now you get 1.5% APR from your US bank account (btw... PM me if you do with details :)).

If you put \$2500 in your account and left it there for five years, you would have \$2693 pre-tax. If you were at a 25% effective tax bracket, you would have \$2652 net of taxes. If you put that same \$2500 in Bankdirect, you would have earned 15,000 miles over the five years.

15,000 miles at a cost of \$152 is \$0.01/mile. Hard to beat that!

Right now, BankDirect makes a lot of sense for people who want to keep money in a very liquid investment.

So, just do what you always do and please, have fun while you're doing it. - R. Petersen, 2011

EXP & LT PLT, Diamond

Posted : February 5, 2011 3:01 am
(@dayone)
Silver

I think BD is best for those looking for a "safe" investment. There are other liquid investments that offer returns that many would find more valuable than miles.

"I have to be careful not to preach. I can't pretend that I can teach."

Posted : February 5, 2011 4:32 am
(@gemac)
Silver

dayone, post: 1817 wrote: I think BD is best for those looking for a "safe" investment. There are other liquid investments that offer returns that many would find more valuable than miles.

Would be interested to hear your suggestions.

So, just do what you always do and please, have fun while you're doing it. - R. Petersen, 2011

EXP & LT PLT, Diamond

Posted : February 5, 2011 4:54 am
(@skit53)
Silver

gemac, post: 1839 wrote: Would be interested to hear your suggestions.

It also depends how much you value your miles at.

Posted : February 5, 2011 5:42 am
(@joesmoe)

Wow, this is quite the referral friendly topic. Maybe we should start a chain to spread around the referrals or something?

--
No status but a sore butt and a bunch of empty mint boxes.

Posted : February 5, 2011 6:35 am
(@noam)
Silver

dayone, post: 1817 wrote: I think BD is best for those looking for a "safe" investment. There are other liquid investments that offer returns that many would find more valuable than miles.

I'm looking at this from another direction. People are willing to MR at much higher than \$0.01/mile, so why not take advantage of opportunities to get \$0.01/mile first. This doesn't give EQM, but a lot of people are MRing just for the miles.

In my case, my actual return far outstrips other "safe" investments. Given how I use my miles, my BD miles save me 6x their actual cost.

Posted : February 5, 2011 11:08 am
(@pizzaman)

noam, post: 2220 wrote: I'm looking at this from another direction. People are willing to MR at much higher than \$0.01/mile, so why not take advantage of opportunities to get \$0.01/mile first. This doesn't give EQM, but a lot of people are MRing just for the miles.

In my case, my actual return far outstrips other "safe" investments. Given how I use my miles, my BD miles save me 6x their actual cost.

Completely agree that if you're a MR, this is a much better investment if you have the cash. With the birth of my second child, I prefer to spend more time at home when I don't have to travel for work. As a group, the options available through AA partners and the AA shopping mall are a great way to earn non-status miles. For those pursuing lifetime status on a small budget, BD is a great choice.

If you have a bit more cash, the Fidelity (50K) and TD Ameritrade (25K) AA offers are a good way to pick up some big chunks of miles.

Posted : February 5, 2011 1:16 pm
(@gleff)

I've actually been really happy as a BankDirect customer. I don't so much look at it as an investment, but as a very attractive overall checking account value proposition.

Now, I also keep pretty big balances in my checking just for liquidity, I churn dollars through it, because I run a TON of business expenses through my credit cards and take reimbursements and don't move money around that actively day-by-day. I deposit my checks into my bank account, and I pay my credit cards from it. The float involved alone winds up generating lots of AA miles.

They pay minimal interest, plus 100 miles per \$1000 average daily balance each month.

There are signup bonuses, plus they pay 1000 miles to anyone who refers a new accountholder and the referred member gets an extra 1000 miles for being referred. Don't pay attention to anyone or anything that claims there are limits to the number of people anyone can refer, or the number of referral bonuses any accountholder can receive. Believe me, I've blown all of those limits out of the water.

They give you your first checks free, they give you free postage paid envelopes for your deposits.

The customer service has been great. They're really responsive and they've rarely charged me fees for things that they should have, e.g. they've overnighted bank checks to me and not charged and they've even failed to charge me for wire transfers. Dunno if that's a favor or a glitch, but I'm happy with them.

They also reimburse out of network atm fees, I wanna say up to 4 times per month.

Frankly it's been a pretty darned good checking account since I opened my account in July 2003.

View from the Wing: everything you need to know about earning/redeeming miles & getting the most bang for your travel \$\$

Posted : February 5, 2011 1:31 pm
(@iolaire)

I'm fairly new to BankDirect and it seems simple/good. But I have one issue, they do not have a web based system for ACH transfers. This makes it hard to move money around from other accounts without using the services of another bank - which usually will charge for transfers out of their accounts (into BankDirect).

Various trip reports related to traveling with dialysis and experiencing in center dialysis treatments at Traveling and in center hemodialysis

Posted : February 5, 2011 2:14 pm
(@gemac)
Silver

noam, post: 2220 wrote: I'm looking at this from another direction. People are willing to MR at much higher than \$0.01/mile, so why not take advantage of opportunities to get \$0.01/mile first. This doesn't give EQM, but a lot of people are MRing just for the miles.

In my case, my actual return far outstrips other "safe" investments. Given how I use my miles, my BD miles save me 6x their actual cost.

Perhaps, but I don't know anybody who does a lot of MRs just for RDM. Everybody I know does them for EQM. Still, I think BankDirect is a good deal.

So, just do what you always do and please, have fun while you're doing it. - R. Petersen, 2011

EXP & LT PLT, Diamond

Posted : February 5, 2011 2:27 pm
(@biu)
Silver

Don't forget the additional 5,000 AA miles you get for setting up direct deposit and 2,000 for using the bill pay service for 12 months. By the way, these do not post automatically. Once you set up the direct deposit or fulfill the 12 months of bill pay, you call them and they manually put it into your account. They've been pleasant to deal with on the phone so far.

Posted : February 5, 2011 3:38 pm
(@gleff)

Bin, for what it's worth the bonuses posted automatically for me. But I agree they've always been very helpful to deal with.

View from the Wing: everything you need to know about earning/redeeming miles & getting the most bang for your travel \$\$

Posted : February 5, 2011 5:11 pm
(@gleff)

One strange oddity that I've discovered about BankDirect though.

When they put a hold on a large deposit, they briefly make the amount of the check unavailable AND make the hold amount unavailable. In other words, they wind up holding TWICE as much money out of your account than you've even deposited. It's a weird programming 'glitch' but how their system works.

What this means is when I deposited a check that was substantailly larger than my account balance, it actually caused my 'available balance' to go negative. They fixed this up manually. HOWEVER while I had a balance of > \$70k, and an available balance > \$15k before my deposit, I actually had an available balance of NEGATIVE \$55K. So when a \$300 payment came through at just that moment... I was hit with a charge for insufficient funds. They processed the payment and billed me. They caught it, and they reversed the NSF charge. I wasn't out anything, my payments went through. But it was very strange that they have to manually manage that sort of scenario.

I've never ACTUALLY had a problem in > 7.5 years.

View from the Wing: everything you need to know about earning/redeeming miles & getting the most bang for your travel \$\$

Posted : February 5, 2011 5:39 pm
(@rob)

gleff, post: 3093 wrote: Bin, for what it's worth the bonuses posted automatically for me. But I agree they've always been very helpful to deal with.

The direct deposit bonus didn't post automatically for me, but they responded quickly to the message I sent and the bonus posted to my AA account in about a week.

Posted : February 6, 2011 10:30 pm
Page 1 / 19