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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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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.

Account Application

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.

Bank Overview

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.

Related Pages: BankDirect, checking account

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cheated by Fort knox
cheated by Fort knox (anonymous)   |     |   Comment #1
This account is a good way to keep your AA miles from expiring.
Anonymous   |     |   Comment #2
Any idea how the miles are reported on the 1099?
Anonymous   |     |   Comment #3
No 1099 for the miles.
unmesh   |     |   Comment #4
To me, the value is closer to 1c/mile since saver awards tend to be available only for periods where fares are heavily discounted. With a yield of 0.05%, this is by no means a no-brainer.

To prevent miles from expiring, I typically make a small purchase through AA Shopping at Best Buy and pick it up on the way home!
Anonymous   |     |   Comment #5
We have found that snagging a business class Saver Award to Europe or Japan can get you a round trip ticket worth from $4000 to $9000 for 100K miles.  So with some planning and flexibility the miles can be fairly valuable.  AA also has some very valuable unpublished perks when your lifetime miles from all sources reach one million.  The danger with accruing miles is the constant threat of the airlines changing their rules on short notice.
Anonymous   |     |   Comment #6
rule of thumb: don't use the mileage for a domestic trip.
Anonymous   |     |   Comment #7
What is the FDIC insured limit for a Checking acct ? Same as Savings ie 250K
adityanm   |     |   Comment #8
The problem with the mileage accounts is that any mileage less than one ticket worth goes waste, I like Schwab card because there is no wastage of reward.
Anonymous   |     |   Comment #9
Earn 5,000 miles for using your BankDirect Visa® CheckCard? Where is that shown on their website? I don't see it anywhere.
KenBDG   |     |   Comment #10
I added the link in the post to the new account offer.
Anonymous   |     |   Comment #11
You get 1000 extra miles for a referral per checking account

Anyone giving out referrals?
DutchPeasant (anonymous)   |     |   Comment #12
Also need to consider redemption.  Most programs require 25k-30k for a domestic flight.  With planning, many domestic flights can be gotten for $200-300.  So, if you had $10k balance for a year and got 12k miles, you'd need two years of that balance to get a ticket.  If you get 1% interest on 10k you'd have $200 after twoyears - enough for some domestic trips but not all/many.  But no blackout dates.  So, this program is marginally OK if only need 25k miles to redeem.  Other programs have increased miles needed (Capital One rewards money market went from 25k to 30k for redemption.)  That Capital One program would give you 6,000 miles a year for a $10k monthly balance but you also get 2500 miles on signup and a 0.75% interest rate - so lower miles but added interest makes it comparable probably.  Plus no blackouts.  And I think you can combine miles from this with Capital One credit card miles which could be attractive
pilot210 (anonymous)   |     |   Comment #13
One thing to note, they recently changed the program with less than a month's notice, limiting the miles earned/"household". They will only award the full mileage (100 mile/$1000 deposited/month) for amounts up to $200K. Beyond that you earn 1/2 the mileage. So, not so much worth it beyond $200K on deposit. When I complained that I had just recently moved my money there and would move the excess of $200K out if they didn't continue the previous policy, a V.P. basically said, sorry, we don't care if you move your money. Hard to figuure this out, but given the attitude, I moved my money.
Anonymous   |     |   Comment #14
I just noticed that they have reduced the number of miles earned to 50 per $1000 for the first $200K
Anonymous   |     |   Comment #15
not true, i just called and verified. they are still doing 100 miles per $1000 for checking. Its 50 miles per $1000 for money market accounts which has always been the case.
Anonymous   |     |   Comment #16
$12/mnt fixed fee is coming Jan 2012 for milage checking accounts. Feel free to confirm by calling BankDirect Client Support:


Client Support 1.877.839.2737 Option 4, then Option 2
Monday through Friday 8:00 AM to 6:00 PM (CT)
Anonymous   |     |   Comment #17
The $12/month fee for the Mileage Checking account cannot be waived.  Preposterous.  You might as well stick with your current bank and buy the extra miles you need from American directly.  You'd have to keep an average balance of $1,440,000 in the account @ the current interest rate of 0.01% to break even on the fee.  At some point below that, of course, the value of the mileage kicks in, but c'mon.  What a terrible offer.
Anonymous   |     |   Comment #18
$200K limit is being lowered to $50K as of June 1, 2013.