Given the low interest rates, one of the better “risk-free” places to park money has been with Bank Direct in a mileage checking account. You earn 100 miles per month for every $1,000 of the monthly average collected balance in your account. That means you earn 1,200 miles per year, and at 1.5 cents per mile that’s about a 1.8% return tax free, so to many that’s the equivalent of ~2.5% interest.
I’ve been late to the game and only opened a Bank Direct account earlier this week, though the funding went through and I received my welcome kit. While browsing FlyerTalk this morning I came across this post, where a FlyerTalk member posts a letter he received from Bank Direct stating that as of January 2012 mileage checking accounts will be charged a monthly service fee of $12. Oddly no one else has posted saying they received the same letter, so as of now I wouldn’t quite put this in the “confirmed” category yet.
Well, that would royally suck, though might just be my luck. While this probably won’t change the strategy for those with $100K+ parked in a Bank Direct account, for those with smaller balances this may be a reason to reconsider. This is especially true since a lot of people accrued AAdvantage miles through Bank Direct for lifetime status with American, and the ability to do that ends on December 1.