Bankdirect: The best kept secret to getting AA miles?

Discussion in 'American Airlines | AAdvantage' started by noam, Feb 4, 2011.  |  Print Topic

  1. noam
    Original Member

    noam Silver Member

    Messages:
    187
    Likes Received:
    146
    Status Points:
    350
    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.
     
    joesmoe, edog22, MJonTravel and 3 others like this.
  2. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    Right now, BankDirect makes a lot of sense for people who want to keep money in a very liquid investment.
     
    joesmoe likes this.
  3. dayone
    Original Member

    dayone Silver Member

    Messages:
    579
    Likes Received:
    824
    Status Points:
    795
    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.
     
    joesmoe and gemac like this.
  4. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    Would be interested to hear your suggestions.
     
    joesmoe likes this.
  5. skit53
    Original Member

    skit53 Silver Member

    Messages:
    143
    Likes Received:
    126
    Status Points:
    420
    It also depends how much you value your miles at.
     
    joesmoe likes this.
  6. joesmoe
    Original Member

    joesmoe Gold Member

    Messages:
    1,521
    Likes Received:
    3,788
    Status Points:
    1,945
    Wow, this is quite the referral friendly topic. Maybe we should start a chain to spread around the referrals or something?
     
  7. noam
    Original Member

    noam Silver Member

    Messages:
    187
    Likes Received:
    146
    Status Points:
    350
    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.
     
  8. Pizzaman
    Original Member

    Pizzaman Co-founder

    Messages:
    4,518
    Likes Received:
    8,754
    Status Points:
    7,270
    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.
     
  9. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    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.
     
    joesmoe likes this.
  10. iolaire
    Original Member

    iolaire Gold Member

    Messages:
    3,510
    Likes Received:
    5,767
    Status Points:
    4,170
    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).
     
  11. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    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.
     
  12. Biu
    Original Member

    Biu Silver Member

    Messages:
    60
    Likes Received:
    79
    Status Points:
    250
    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.
     
    Freddie Listo and joesmoe like this.
  13. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    Bin, for what it's worth the bonuses posted automatically for me. But I agree they've always been very helpful to deal with.
     
    joesmoe likes this.
  14. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    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.
     
  15. Rob
    Original Member

    Rob Gold Member

    Messages:
    10,388
    Likes Received:
    14,166
    Status Points:
    16,520
    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.
     
  16. justageek
    Original Member

    justageek Active Member

    Messages:
    14
    Likes Received:
    13
    Status Points:
    70
    On most airlines that's probably true, but on AA even RDMs are worthwhile because lifetime GLD/PLT count all miles. BankDirect gave me a large portion of the miles I needed to get 2MM.
     
  17. aitchly
    Original Member

    aitchly Silver Member

    Messages:
    469
    Likes Received:
    1,083
    Status Points:
    820
    I agree that they are very responsive and I was generally happy until I needed money in France.

    I actually planned ahead and followed the rules, called into BD and let them know about my travel. I Get to Paris, no dice. For fun, this was over Thanksgiving, so customer service was not responsive. Their apologies were pretty blase and have led to a reduction in my reliance on them as a secondary bank.
     
  18. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    I always carry more than one ATM card. My BankDirect didn't work in the airport at SJO, but worked all over the rest of Costa Rica. That one time was the only time that I've had it not work.
     
  19. noam
    Original Member

    noam Silver Member

    Messages:
    187
    Likes Received:
    146
    Status Points:
    350
    I don't have a BankDirect ATM card, but I don't have a single ATM card which has worked every time I've gone overseas. I always carry more than one if I know I need to use an ATM.
     
    gemac likes this.
  20. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    I agree. BankDirect has been at least as good as my Bank of America and USBank cards. I always like to use an ATM overseas, as I don't like the bogus FX fees that credit cards like to tack on. I've always had either BankDirect or Bank of America work, never had to go to the USBank card.
     
    HNL likes this.
  21. aitchly
    Original Member

    aitchly Silver Member

    Messages:
    469
    Likes Received:
    1,083
    Status Points:
    820
    I had a second as well, it charged higher fees and was not my preference. My annoyance was speaking to a CSR who 'cleared' the card which subsequently did not work. My distress was the nonchalant, "ooops, it is fixed now" response that did not include a "sorry we screwed up."
     
  22. gemac
    Original Member

    gemac Silver Member

    Messages:
    1,027
    Likes Received:
    1,077
    Status Points:
    900
    I hear you. My second card has a higher fee also (in fact, the BankDirect card has no fee at all, as they rebate to you the fee charged by the ATM machine you use). I didn't even call, and the BankDirect card worked at other ATMs in Costa Rica, so I thought it was the ATM's fault rather than BankDirect's in my case.
     
  23. Bluto
    Original Member

    Bluto Silver Member

    Messages:
    187
    Likes Received:
    242
    Status Points:
    360
    I am a fan of BankDirect as well. However, it's worth mentioning that they have a $2,500 minimum avg balance or else you get hit with a $15/mo maintenance fee. Most online bank accounts have no minimum so this caught me by surprise and I was assessed the fee when I was sweeping balances between my BankDirect accounts. Now, I've learned to leave at least $2,500 in each account.
     
  24. Vik Murthy
    Original Member

    Vik Murthy Silver Member

    Messages:
    42
    Likes Received:
    52
    Status Points:
    180
    Totally agree about the frustration with the lack of web-based ACH transfers. I use an Ally Bank savings account for the express purpose of moving money into and out of BankDirect. Fortunately, there is no charge for that undertaking.

    I would expect that there are other quality online banks (e.g., American Express Bank, Capital One Bank, etc.) that would offer the same free transfers to/from BankDirect.
     
  25. Vik Murthy
    Original Member

    Vik Murthy Silver Member

    Messages:
    42
    Likes Received:
    52
    Status Points:
    180
    I agree about the BankDirect customer service. When mistakes have been made, they have been responsive in addressing them (especially the poor guy in charge of actually posting the miles -- his name is Henry -- who fields a call from me roughly once a month).

    One thing to keep in mind is that if you ever change the AAdvantage number on a joint account, be vigilant in checking that the miles correctly post to the new AAdvantage account. I was having the AA miles from a joint account post to my wife's AAdvantage number so that I could get her to lifetime Gold. Once that was accomplished, I switched the account over to my AAdvantage number so that I could get to lifetime Gold. And for the next two or three months, no miles from that account posted to my AAdvantage number. Apparently, this is a glitch in BankDirect's systems.
     
    joesmoe and travelingmore like this.

Share This Page