There are several ways to earn frequent flyer miles. Flying on a purchased flight with an airline, opening an airline-branded credit card, or making purchases with that branded card are at the top of the list.
However, there may be an easier way to earn frequent flyer miles while never having to leave your sofa.
Bask Bank, an innovative FDIC-insured financial institution, introduced a unique savings account earlier this year that earns frequent flyer miles instead of interest.
With average savings account annual interest rates currently at 0.06 % nationally according to the FDIC, the possibility of earning usable frequent flyer miles in lieu of interest may sound intriguing to travelers.
It’s piqued our interest, too (no pun intended), so we decided to find out how the Bask Bank savings account works. Our article today will look at how you earn miles with Bask Bank, what those miles might be worth, and any downsides to having the account.
Table of contents
Table of Contents
What Is Bask Bank?
It’s possible you haven’t yet heard of Bask Bank, but the institution does have some history. The bank is a division of Texas Capital Bank N.A. which is based in Dallas. Back in 1999, Texas Capital Bank was the first bank to offer an online savings account.
Texas Capital Bank is also an established member of the FDIC (Federal Deposit Insurance Corporation) which means your deposits are insured for up to $250,000, in total, across Bask Bank and other Texas Capital Bank affiliates.
Bask Bank does not currently offer other financial services, just the miles-earning savings account.
In a move that leverages the parent bank’s long-term relationship with American Airlines, it created the only savings account that earns American Airlines AAdvantage frequent flyer miles.
How to Earn Miles by Saving With Bask Bank
The Bask Bank savings account has a simple structure, so earning miles is easy. Deposit money and receive frequent flyer miles for leaving the money in the account.
Let’s look closer at how you can earn miles with a Bask Bank savings account.
Earning on Deposits
The amount of AAdvantage frequent flyer miles you earn is based on the average daily balance in your account. If your average daily balance for an entire year is $60,000, you would earn 60,000 miles.
Miles are calculated monthly by the fifth business day of the following month, then deposited into your American Airlines AAdvantage account. It can take 6 to 8 weeks before the miles are credited to your American Airlines AAdvantage frequent flyer account, however.
Account Opening Bonus
Deposit $5,000 within the first 120 days of opening your Bask Bank savings account (and hold $5,000 in the account for a minimum of 90 days), and you’ll receive 1,000 extra AAdvantage bonus miles. This offer is valid for new accounts opened by December 31, 2020. Bonus miles will be awarded within 10 days of meeting the requirements.
Bask Bank Refer-A-Friend Bonus
For a limited time, you can invite friends to open and fund a Bask Bank savings account and earn 5,000 AAdvantage bonus miles per qualifying referral.
To qualify for receiving a referral bonus you must keep your account funded with an average minimum daily balance of $10,000 over a period of 90 days between now and December 31, 2020.
Referrals who use your specific referral link will also receive 5,000 miles by opening a savings account by September 30, 2020, and keeping an average minimum daily balance of $10,000 over a period of 90 days within the first 120 days of account opening.
The last day to refer anyone is September 30, 2020. Terms and conditions apply.
Everything Else You Need to Know
Before you decide to open a Bask Bank savings account, consider this additional information.
- Mile Values Are Taxed — You will receive a 1099 interest statement for the value of the miles (calculated at 0.42 cents per mile) earned in a calendar year. This translates to $42 in taxable value for every 10,000 miles received.
- No Fees or Minimums — Bask Bank does not charge any account fees and there is no minimum deposit required to open an account.
- No Ongoing Interest To Compound — Since you are not receiving interest deposited into your account, there is no compounding as in a typical interest-bearing savings account. Over time, this factor could be significant, especially if interest rates on savings accounts increase.
- Miles Devaluations — It’s worth considering that the value of airline miles can also decline.
- Opening and Managing an Account Is Simple — Just complete the application, create a login, and transfer funds. Continue to manage your account via the Bask Bank app.
Is a Bask Bank Savings Account Worth It?
To determine whether the Bask Bank savings account is worth it, compared to earning interest in a standard savings account, let’s look at some sample math.
With the average annual savings account interest rate around 0.06%, you would earn $36 on your $60,000 deposit if left for 1 year. Or let’s say you do better on such a large deposit and can earn 0.10%, or $60.
With Bask Bank, a deposit of $60,000 that remained in your account for 12 months would earn 60,000 AAdvantage frequent flyer miles.
While you would be receiving 60,000 miles for the foregoing of $36 to $60 in interest, you will also receive a 1099 tax statement for the value of the 60,000 miles from Bask Bank. At the current stated rate of 0.42 cents per mile, 60,000 miles would generate a taxable interest income of $252. If you are in a 25% tax bracket, you would pay $63 tax on the miles.
Your net cost for the 60,000 miles would be the estimated $36 to $60 in interest you gave up + the taxes you would pay on the value of the miles. While valuations fluctuate and are subjective, we value American Airlines AAdvantage miles at around 1.45 cents each. This translates to a value of $870 for 60,000 miles.
Where Can 60,000 AAdvantage Frequent Flyer Miles Take You?
Business and first-class tickets for flights throughout the contiguous 48 U.S. states and Canada start at 15,000 miles for MileSAAver flights less than 500 miles. One-way flights within the contiguous 48 U.S. states, Canada, Mexico, Central America, and Northern South America start at 25,000 miles and can be as much as 90,000 miles depending on timing and availability.
Economy flights start at 7,500 miles for flights less than 500 miles throughout the contiguous 48 U.S. states and Canada to 50,000 miles for peak flights to Hawaii. Flights to the Caribbean, Mexico, Central America, and Northern South America range between 12,500 miles for MileSAAver flights to 50,000 miles for peak pricing.
For a long list of aspirational flight ideas using AAdvantage miles, we’ve done our homework and put together a collection of ways to use your AAdvantage miles with American and its partner airlines to receive the best possible value.
You don’t have to have a large stash of AAdvantage miles to receive good value either. Check out what you can do with just 10,000 AAdvantage miles.
If you frequently fly American Airlines, you’ll be interested in our breakdown of the best credit cards for earning miles, redeeming miles, receiving travel perks, and more. Access our article on the best credit cards for American Airlines loyalists here.
Earning miles for saving money sounds fun and productive. If you have a travel goal in mind and you have the funds to deposit in an account, do the math, and go for it.
Especially when saving accounts interest rates are very low, it can make sense to be earning miles in a Bask Bank savings account. Receiving a greater value for those miles than you would receive from the interest you would earn elsewhere would make the account worth it.