I’m a big fan of BankDirect, I’ve written about it in the past such as here, they’ve hosted my primary checking account since July 2003. I’ve found the customer service excellent and the value proposition compelling.
I get 100 American Airlines miles for every thousand dollars of average balance each month, which in a low interest rate environment is a pretty good rate of return (and unlike Citibank, they don’t 1099 the miles). As long as I keep an average balance of $2500 in the account I’m avoiding fees. They reimburse my out-of-network ATM fees and give me postage-paid envelopes for mailing in deposits.
Yesterday I received a letter explaining changes to their program. They’re capping mileage earning for some very large depositors (hint: it won’t affect me at all!) and they’re upping their new member signup bonuses. Both changes go into effect April 1.
Currently there is no limit to the miles earned each month. You earn 100 miles for every $1000 average balance, no matter how big your balance. Some folks have deposited very large sums of money, say a couple of million dollars even (more than I’d be comfortable with, even if I had it..) to earn a couple of hundred thousand miles per month.
BankDirect is changing their mileage earning structure to say that you’ll only earn the 100 miles per $1000 average balance on the first $200,000 in a checking account (or Certificate of Deposit). After that they award only 25 miles per $1000 average balance. They’re also cutting mileage earning on their money market accounts in a similar way, 50 miles per $1000 up to $200,000 and 25 miles per $1000 after $200,000.
They’re also limiting each household to one mileage earning account of each type, no opening a second account to circumvent the mileage earning limits.
As I say, this won’t affect me at all. But for some heavy BankDirect players it’s a devaluation.
The other change is an improvement in their new member signup bonus.
Currently, new accounts receive:
- Earn 1000 miles for opening a Mileage Checking Account
- Earn 5000 miles for signing up for payroll direct deposit into a Mileage Checking Account
- Earn 2000 miles for using BankDirect’s bill pay service for 12 months
Plus 1000 miles for being referred by an existing customer.
Beginning April 1, the offer will be:
- 1000 miles per new account, plus 1000 miles per $100,000 in initial deposit
- 10,000 miles for payroll direct deposit (not sure if a Paypal transfer or EFT from another financial account will work to satisfy this)
- 5000 miles for using bill pay (presumably still a 12 month requirement? Not yet clear).
- 5000 miles for using their Visa Checkcard
- 1000 miles for referring new accountholders/being referred by an existing accountholder
So a standard account opening bonus, presumably fully received after a year, would be 22,000 American Airlines miles — up from 9,000 miles. Pretty good.
Bottom-line, though, is that if you’ll consider opening a BankDirect account you should wait to do so until April 1. And of course you should be referred by an existing accountholder. I’ve earned great referral bonuses by referring folks, of course. The strange thing is that there have been references to earning up to 10,000 miles from referrals, and I recall once seeing a limit of earning 20 referral credits, but in practice I can verify that no such limit has been enforced.
Can you only receive miles from American Airlines?
@Jessica – with BankDirect, yes.
Thanks! I just signed the signature card and wrote a check for the initial deposit for a new account. It would have been in today’s mail had I not read your post. Thanks!
The interest rates on all their AA accounts are effectively zero (0.0-.10%). But if you park 100-200K a year there, and used that 120-240K miles on a premium cabin reward ticket, you’d earn way more than the 1.3% that you get from the leading interest bearing accounts…
Do they report the value of miles as interest?
I alrady requested the form to be sent to me. I got the form but haven’t completed it yet. Am I stil eligible to be referred?
@Robert as I mentioned in my post above, no.
@ Jade – I am in the same boat. I sent an email to BankDirect this morning asking how I could earn the new improved bonus. I asked them if I should hold off sending in the signature card or just turn in another new application on April 1 (expecting my current application has never been fulfilled and it will be closed).
Oh no! I just applied this past week and already sent in my signature card! In fact, someone from their office just called me yesterday to confirm an item on my application. I just emailed BankDirect from their website asking if I can receive the new direct deposit, bill pay, and check card bonuses. Comments on FT and Milepoint suggest the customer service is very good, so hopefully they’ll let me get the new bonuses. If not, I’ll be pretty darn pissed.
Does anyone know any banks that offer Onepass or Delta skymiles?
@Jessica – OnePass had a deal with Chase for debit card banking, but now that United & Continental are merging, I would assume that deal is over for good. The sign up for the Chase banking deal ended some time last year.
Great news…thanks for the update. I’ve been meaning to open an account.
@jessica- Delta partners with SunTrust for their checking accounts, and they’ve run some really sweet deals in the 4th quarter the past two years. The info is posted on this blog when it’s in season.
I’ve used them for over a year and I love the way the miles are automatically posted. No chasing them the way I always had to with Chase checking and debit cards for onepass miles.
Couple million? Depositing over the FDIC limit is the definition of insanity. You may only have miles left…
Does the $200,000 limit apply to the initial opening bonus too? That is, if I initially deposited $2 million, could I get 20k as an initial bonus?
Gary:
This sounds great. Now I know what I’ll be doing April 1st. Thank you so much.
What do I do to be referred to BankDirect by you?
@Robert just shoot me an email at gleff – at – yahoo.com and let me know the preferred email address to use for the referral.
How can I set up direct deposit from a checking account or set up an account with paypal?
for the visa checkcard, is that like applying for a credit cars? Will it affect my credit score?
anyone still need a referral for the mileage bonus email me at hiijacker at yahoo.com
referral
anyone still need a referral for the mileage bonus email me at doctorsmile @gmail
Can I get a referral from you?
this is my address ihelen123@gmail.com
would like a referral, TIA!!