BankDirect Ending AAdvantage Checking Program

Filed Under: American AAdvantage, Great Deals
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I’ve had a BankDirect mileage-earning checking account for about as long as I’ve had a blog. It has been a stable place to keep my emergency fund savings, and even with the fees on the account, I was happy to earn AAdvantage miles for my account balance.

I recently closed my BankDirect account, and moved those funds to a Bask Savings account — both Bask and BankDirect are part of Texas Capital Bank, but the value proposition of Bask is much better, as is the user experience.

BankDirect Ending AAdvantage Checking Program

It seems others, including TCB, may feel similarly, as it has just been announced that all miles-earning BankDirect accounts will be closed by August 31st, 2020. Current BankDirect AAdvantage checking account holders have three options:

  1. Open a new Bask Savings account, so you can continue to earn miles (this is what I’ve done, and what I’d recommend others do)
  2. Keep your account at Texas Capital Bank, and have it automatically convert to an interest-bearing checking account in September
  3. Move your funds to another institution

Given the current low-interest rate environment, the earnings rates on the Bask accounts are a great value. Earning one AA mile (which I value at 1.5¢) for every dollar deposited is a terrific return. By my valuation that’s an annualized 1.5% return, versus the current national average interest rate on savings accounts of 0.06% (in fairness, there are some better options out there, but nothing that competes with the overall value proposition of Bask, in my opinion).

Bask sign-up bonuses

In addition to Bask offering no fees (while BankDirect did have account fees) and a great rate of return, Bask is also offering some impressive sign-up bonuses.

These are available to the general public through June 30th, though current BankDirect account holders can still receive the 5,000 mile sign-up bonus through August. There’s really no reason to wait until August however, and opening a Bask account now means you can grab the Feedback bonus, and start the clock on the tiered balance bonuses.

You can learn more about the Bask accounts, and how mileage is accrued instead of interest, in my review.

Opening a Bask Savings account

As mentioned above, Bask has a phenomenal website and app, which makes opening an account easy. When I opened my account a few weeks ago, it took less than five minutes.

You have the option to fund your account with an external bank transfer during the onboarding process. If you want to transfer funds from your BankDirect mileage account, you can send a secure message when logged in to your current BankDirect account, or call customer service at 833-260-4320.

Bottom line

BankDirect has been a great way to earn miles for the past decade, but the Bask Savings accounts are a better all-around product. I’m happy to continue earning miles instead of interest for my emergency fund, and there’s no reason not to switch ahead of the forced migration in September.

If you don’t yet have a Bask account, I’d recommend opening one.

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Comments
  1. When this partnership launched everyone received good value. It was a game changer IMO
    The bank got its customer and folks saw advantage currency as a highly desirable currency to take over interest accrued.
    Fast Forward I had little interest before the pandemic as American under Parker’s horrendous leadership destroyed the value proposition shooting AAs program in the foot their once golden goose
    Combined with the pandemic crushed travel desirability now its a double whammy
    Fast forward I am on cash back cards and the ability to transfer points as an option if the deal/redemption is good enough.Gone are my 12 plus years of AA Citi bank credit cards
    Added to that American has wrecked its search engine and the outrageous cost of their redemption’s keep rising
    This all can’t be surprising as American thinks its miles are still more valuable apparently then its customers and their business partners
    Partners and customers know better I would argue

  2. @Gene One for me, one in my wife’s name (and her AA mileage account). 2x (5,000 + 1,000) bonuses, plus the usual award miles.

  3. I made ~500k miles from them over the years, and even paid them $12/month for quite a while. But when they announced that starting in 2020, they would issue 1099s, it was the last straw. Like many others, I closed my account and went elsewhere.

  4. @JC It’s a moot point now, but to avoid the $12/mo fee you could have let your account go dormant. After a year, they stopped charging a fee. You just needed to make sure you had activity before 3 years or they would send the funds to the Texas Comptroller. I did this by accident, but caught it before the 3 years.

    @Apu If you google savings account rates there are a lot of banks that will pay up to 1.5% interest still. However, they will issue you a 1099-INT too. So you’ll be paying tax on 1.5% interest, but Bask Bank values AA miles at 0.42 cents for IRS purposes and you’ll only be paying tax on 0.42%. Assuming you eventually can use AA miles for at least 1.5 cents each (who knows?) Bask is the better deal. I’m taking the risk, but I’m bored and want to keep playing the travel hacking game.

  5. What’s the process if a bank goes under? How many months do you have to wait before the FDIC insurance kicks in and gives you back all your money?

  6. @Apu, google “What happens when your bank is seized by the FDIC?” It’s a great article that explains things well. Sometimes, your money is available in another bank the next morning (i.e. no interruption in funds availability). Sometimes, the FDIC has to cut you a check if the bank had no buyer.

  7. TPG published a similar article and I thought it was very poorly written. This one didn’t strike me as bad, but has the same issue.

    The title is Bank 1 is ending a bonus program. Stick with addressing that. If at the end you want to talk about Bank 2 as an alternative, go ahead, but don’t mix the two things. If you want to publish an article or link to a previous article about Bank 2, that would be better. Doesn’t help that the banks in the article have similar names.

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