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Looking for a way to boost your American Airlines AAdvantage® balance? You can now put your savings to work earning miles instead of interest with a Bask Bank Savings Account.
Traditional methods of earning frequent flyer miles have grown harder to capitalize on in recent years, and the need to diversify your rewards earning strategy is more important than ever before. This means looking outside of conventional points and miles earning techniques at strategies you may not have used in the past.
This week, we want to introduce a way of leveraging your savings to earn AAdvantage® miles from a Bask Savings Account. You can earn unlimited miles, there are no fees, it’s quick to set up, and you’ll get 5,000 bonus AAdvantage® miles when you open an account and fund it with $1,000 for at least 30 days.
Key Features and Highlights of the Bask Bank AAdvantage® Offer
A Bask Savings Account earns miles instead of interest. Every dollar you save earns one AAdvantage® mile annually, paid in monthly installments into your AAdvantage® account. On top of the annual earnings, Bask Bank is currently offering a one-time account opening bonus, a feedback bonus, and a tiered balance bonus if you maintain a balance of between $25,000 and $100,000 for 12 consecutive months.
These are the details for each of the bonuses:
Account Opening Bonus
- Deposit $1,000 in your Bask Savings Account and earn 5,000 bonus miles.
- Must open an account by February 29, 2020. Must maintain a minimum account balance of $1,000 for 30 consecutive days within 60 days of opening an account. Valid through February 29, 2020
- Help Bask Bank perfect their program and earn 1,000 bonus miles.
- Must provide feedback through the online banking portal or mobile app. Offer valid through June 30, 2020.
$25,000 Balance Bonus
- Maintain a $25,000 balance in your Bask Savings Account and earn 10,000 bonus miles.
- Fund your account within 60 days of opening and maintain a minimum account balance of $25,000 for 12 consecutive months. 5,000 miles paid after six consecutive months of a $25,000 balance, 5,000 miles paid after 12 consecutive months of a $25,000 balance. Valid December 1, 2019 through March 31, 2020.
$50,000 Balance Bonus
- Maintain a $50,000 balance in your Bask Savings Account and earn 20,000 bonus miles.
- Fund your account within 60 days of opening and maintain a minimum account balance of $50,000 for 12 consecutive months. 10,000 miles paid after six consecutive months of a $50,000 balance, 10,000 miles paid after 12 consecutive months of a $50,000 balance. Valid December 1, 2019 through March 31, 2020.
$100,000 Balance Bonus
- Maintain a $100,000 balance in your Bask Savings Account and earn 40,000 bonus miles.
- Fund your account within 60 days of opening and maintain a minimum account balance of $100,000 for 12 consecutive months. 20,000 miles paid after six consecutive months of a $100,000 balance, 20,000 miles paid after 12 consecutive months of a $100,000 balance. Valid December 1, 2019 through March 31, 2020.
The name on the savings account must match the name on your AAdvantage® account, so you need to be the primary account holder to transfer the miles into your account.
How to Maximize the Bask Bank AAdvantage® Partnership
With the average savings account fetching an interest rate of ~1%, earning miles allows you to leverage your savings for travel experiences you couldn’t otherwise afford with the interest garnered from your account balance. Let’s crunch some numbers to see how earning AA miles instead of interest rolls out over the first year if you moved $100,000 into a Bask Savings Account:
Savings account earning 1%
- $100,000 x 0.01 = $1,000
- Total: $1,000
Bask Bank Savings Account
- $100,000 x 1 mile = 100,000 miles
- + 5,000 Opening Account Bonus
- + 1,000 Feedback Bonus
- + 40,000 Balance Bonus
- Total: 146,000 AA miles
What is 146,000 AAdvantage® miles worth? That depends on how you redeem them. But they are potentially worth a lot more than $1,000 if you use them to book international premium cabin flights on American or partners like Cathay Pacific, British Airways, and Etihad.
For example, 140,000 AA miles will land you round-trip business-class flights from New York to Hong Kong on Cathay Pacific, paying minimal fees and taxes.
The nearest cash equivalent business-class tickets will set you back $3,098, much higher than the $1,000 you would receive as interest over the course of a year.
And if you were to book the exact same flight on Cathay Pacific, it would cost roughly $17,000! While it is not likely you would pay $17,000 for a flight in any class of service, the miles earned on your savings can buy you adventures you wouldn’t otherwise get to experience.
Are There Any Potential Downsides?
While you won’t pay any account fees for a Bask Savings Account, you do need to factor in that the IRS treats miles as taxable when they are earned from a bonus like this one; Bask Bank will send you a 1099 at the end of the year based on the miles earned with your account. Fortunately, Bask Bank values AA miles at a much more conservative value than we attribute them here at AwardWallet.
According to Bask Bank's terms and conditions, “Miles are currently valued at 0.42 cents per mile, the equivalent of 0.42% annual percentage yield.” While this value is subject to change, it gives us a good point of reference for how taxes could be affected.
If you maximize this offer and earn 146,000 miles, the taxable value at 0.42 cents per mile would be $613.20. At a 30% marginal tax rate, you’d be looking at a cost of ~$185, which is quite modest when compared with the potential value of the flights you could book with your miles.
It's worth keeping in mind that gains from any high-interest savings account are also subject to taxes, so the real question is whether you can get substantially more value from the AAdvantage® miles you can earn with Bask Bank. And the answer should be a resounding yes. Since Bask Bank doesn't charge any monthly fees, you can think of the tax liability as the out-of-pocket cost for collecting miles.
Please Note: This material has been prepared for informational purposes only and should not be relied on for tax, legal, or accounting advice.
Most frequent flyer programs allow you to supplement the miles earned by flying and spending on co-brand credit cards with points transferred from flexible rewards programs like Ultimate Rewards or Membership Rewards, providing an easy way to boost your account balance without increasing your everyday spending. The ability to supplement your current miles earning strategies by earning AAdvantage® miles on your savings could provide a significant boost to your balance at the end of the year.
While it’s common to earn miles via credit card spending, flying, shopping portals, and dining programs, the one thing that’s been missing is earning airline miles on your savings. We don’t see the Bask Savings Accounts as replacing the traditional methods of collecting frequent flyer miles, but it's a great way to supplement the miles earned via credit card bonuses, and it enhances your earning options. In the 48 months you now have to wait between signup bonuses on the Citi AAdvantage® cards, you could potentially earn tens or even hundreds of thousands of AA miles by banking your savings in a Bask Bank online savings account.
Miles awarded to you are subject solely to the terms and conditions of the AAdvantage® program. Please refer to these disclosures for additional questions regarding miles. Bask Bank is not liable for lost or expiring miles.
Bask Bank, a division of Texas Capital Bank, N.A. Member FDIC
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