In a letter sent to its members, BankDirect shared that it will be discontinuing its partnership with American Airlines on Aug. 31, 2020. Members are being offered a sign-up bonus of 5,000 AAdvantage miles (worth $70 based on TPG valuations) to switch to a Bask Savings Account by Aug. 31, 2020, and deposit at least $5,000. Those who don't switch will automatically have their BankDirect accounts converted into BankDirect interest-bearing accounts on Sept. 1, 2020. Customers also have the option to can close the account by calling customer service.
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BankDirect vs Bask Bank
BankDirect offered three types of mileage-earning accounts: Mileage Checking with Interest, Mileage Money Market Account (MMA) and Mileage Certificate of Deposit (CD). Each of these accounts offered a different earning structure with the potential to earn thousands of miles each year for saving with the online bank. But you can do much better now with a savings account offered by Bask Bank.
Launched in January 2020, Bask Bank is an online bank that offers savings accounts that earns AAdvantage miles instead of interest. Members earn one AAdvantage mile for every dollar deposited and there's no limit to the number of miles you can earn annually. That equates to a 1.4% return, based on TPG’s latest valuations.
There are no fees associated with Bask Savings Accounts, which is an improvement over BankDirect, which did have fees. There is also no minimum funding amount required in order to open an account. Like BankDirect, it's run by Texas Capital Bank, N.A., which boasts a 20-year relationship with the airline and is a member of the FDIC.
Related: Introducing Bask Bank, a new way to earn miles
Bonus opportunities
As previously mentioned, BankDirect customer are being offered 5,000 bonus miles for switching to a Bask Savings Account by Aug. 31, 2020 and depositing at least $5,000. This is the same as Bask Bank's publicly available offer, except that offer is only valid through June 30, 2020.
There are some other valuable bonus opportunities available as well, especially if you tend to carry a high balance and are ready to open your account before the end of the month. First, you can earn an easy 1,000 bonus miles by completing the Bask Bank online feedback survey by June 30, 2020. Second, you can earn extra miles for maintaining certain balance levels.
Savers who maintain a $25,000 balance for 12 consecutive months within the first 14 months of opening an account earn 10,000 bonus miles. That moves up to 20,000 bonus miles for maintaining a $50,000 balance for 12 consecutive months and 40,000 bonus miles for maintaining a $100,000 balance.
Bottom line
The discontinuation of BankDirect isn't much of a bummer, since there is an improved alternative. Bask Bank offers better earning potential, superior technology and doesn't have any fees. It's a nice supplement your travel rewards credit cards even if you weren't previously a BankDirect customer.
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