BankDirect is a small bank which is unique in the sense that it offers accounts that give American Airlines miles in lieu of interest.
I have talked about their Mileage Checking Account which offers 100 American Airlines miles for every $1000 balance in the account, up to max of $200,000. This comes at the expense of a $12 monthly fee. For a lot of people, the fee is a deal breaker because their monthly balance is small and the amount of miles earned is not worth the monthly fee.
Enter the BankDirect Mileage Money Market Account. It offers half the miles (50 American Airlines miles per $1000 average collected daily balance, up to max of $200,000) compared to the checking account, but does not have a monthly fee if your balance is more than $10,000 every month. There is a fee of $10 per month if your balance is less than $10,000 in a month.
BankDirect Mileage Money Market Account (Highlights)
- $500.00 minimum opening balance
- Interest compounded (credit method) daily
- Interest paid on collected balances of $500.00 and greater
- MMA Transaction Limitations: Six (6) transactions per month, three (3) of which can be withdrawals (check, draft, debit card or similar – including POS transactions – made by the depositor and payable to third parties)
- There will be a $10.00 fee per transaction for excess transactions
- First order of checks free (50-pack)
- Free ATM card upon request
- Four (4) reimbursed ATM withdrawals per statement cycle (up to $2.50 per transaction)
- Unlimited ATM withdrawals without penalty (ATM withdrawals do not count against the six transaction limit)
- Earn 1,000 miles for opening a Mileage MMA
- Earn 50 AAdvantage® miles per month for every $1,000.00 of the average daily collected balance in your Mileage MMA Account up to the first $200,000 on deposit. Average daily balances above $200,000 earn 25 AAdvantage® miles per $1,000 on deposit, WITH NO CAP!
Of Note: There is a $15 fee for closing your account within 90 days of opening.
Comparing the BankDirect Mileage Checking and the BankDirect Mileage Money Market Accounts
Let’s compare the checking account vs this money market account. Below is a table that shows how many miles one would earn vs. the fees paid.
| Checking Account | Money Market Account | |||
|---|---|---|---|---|
| Monthly Balance | Annual Miles Earned | Annual Fee | Annual Miles Earned | Annual Fee |
| $200,000 | 240,000 | $144 | 120,000 | None |
| $150,000 | 180,000 | $144 | 90,000 | None |
| $100,000 | 120,000 | $144 | 60,000 | None |
| $75,000 | 90,000 | $144 | 45,000 | None |
| $50,000 | 60,000 | $144 | 30,000 | None |
| $25,000 | 30,000 | $144 | 15,000 | None |
| $15,000 | 18,000 | $144 | 9,000 | None |
| $10,000 | 12,000 | $144 | 6,000 | None |
As you can see, it is better to have the checking account instead of the money market account if you carry large monthly balances, even despite the fee. For instance, if you have $200,000 in the checking account vs the money market account, you are paying $144 for an extra 120,000 miles which is totally worth it. However, on the lower end of the spectrum, if you only have a $10,000 balance, it doesn’t make sense to pay $144 for the checking account and earn 12,000 miles. It might be better to only earn 6,000 miles in the money market account and not pay any fee.
Is the Mileage Money Market Account worth it?
The Mileage Money Market may be worth it if you do not put a large amount of money into the account. For example, suppose you put $15,000 in another bank with a 1% APY (a high assumption), you would have $150 which you will pay taxes on. Let’s assume you paid 25% tax on that which leaves you with $112.50. With BankDirect Money Market, you would earn 9,000 miles instead. So, you are essentially getting 9000 miles for $112.50 which comes out to 1.25 cents per mile. That is not a steal, but it is certainly not a bad deal, especially if those miles can help you redeem a premium cabin award on American’s partners such as Cathay Pacific or Qantas.
Of course, the real answer to if its worth it is going to vary by the individual. It will depend on one’s valuation of an American Airlines mile, their tax bracket, what kind of investor they are, and what kind of interest they can earn in other bank accounts.
The BankDirect Mileage Money Market account is just another source to earn American Airlines Miles which are going to become much more valuable with the merger with US Airways. A great example of how far 50,000 American Airlines miles can take you is this recent post from the Loyalty Traveler.
Visit the BankDirect Mileage Money Market Account page on the bank’s website for complete details.