Review of BankDirect and Its AAdvantage Miles Program
With interest rates on internet savings accounts so low I thought it might be worthwhile to review BankDirect. Instead of competitive interest rates BankDirect offers airline miles on its deposit products. BankDirect has been around for a while, but I haven't reviewed it since I've never been a fan of airline miles. I thought it might now be a good deal since interest rates are so low.
Here's what you can earn per month with a BankDirect Mileage Checking Account:
- Earn 100 miles per month for every $1,000 of the collected balance in your Mileage Checking Account up to the first $200,000 on deposit. Earn an additional 25 miles per $1,000 for collected balances over $200,000.
You can also earn miles with the bank's money market account and CDs but it's less than what you can earn with the checking account. All of these accounts pay interest, but the interest rates are so low, they're not worth mentioning.
Value of Airline Miles?
So if you maintain a $10,000 balance in the checking for one year, you can earn 12,000 miles. The problem that I have with miles is that it's hard to know how much they're worth. I did some searching on the net for the value of airline miles. Some of the resources that I've found were at Wikipedia, SmarterTravel.com and Upgrade: Travel Better. Values seem to range from 1 to 2 cents.
Based on these values, 12,000 miles can have a value between $120 and $240. For $10K over one year, earning $240 would be equivalent to a yield of 2.40%. Earning $120 would be equivalent to a yield of 1.20%. So if you know how to maximize the value of airline miles, this checking account can be a good deal.
Checking Account Details
One downside with the checking account is that it has a $15 monthly fee when your balance falls under $2,500. Refer to the BankDirect's Mileage Checking page for the full details.
Checking Account Bonus
The checking account also has a new-account offer. 21,000 miles can be earned fairly easily. Here are the full details as described in the BankDirect's Mileage program overview page:
- Earn 1,000 miles for each new Mileage Checking Account or Mileage Money Market Account opened. Additionally, earn 1,000 miles for every $100,000 in initial deposit, up to $500,000, per household.
- Earn 10,000 miles for establishing full payroll direct deposit from your employer into a Mileage Checking Account.
- Earn 5,000 miles for using BankDirect's bill pay service.
- Earn 5,000 miles for using your BankDirect Visa® CheckCard.
- Earn 1,000 miles for referring a friend when they open a Mileage Checking account.
The account opening process isn't all online. According to the bank's instructions you're required to print out the signature card and mail it in with your initial deposit.
BankDirect is a division of Texas Capital Bank. According to its history page, BankDirect.com was launched in 1999. That's even older than ING Direct and Bank of Internet.
Texas Capital Bank has an overall health score at DepositAccounts.com of 3 stars (out of 5) and a Texas Ratio of 25.61% (average) based on December 2010 data. Please refer to our financial overview of Texas Captial Bank for more details. The bank has been a FDIC member since 1997 (FDIC Certificate # 34383).
Other Internet Savings Accounts
If you prefer just a high interet rate, you can find the highest yielding savings accounts in our savings account table and in our money market table. The best rates are currently available in regular checking accounts. You can find these in our checking account table.
Edit 4/13/2011: Added link to Mileage program new account offer.
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