In 2020 we saw the introduction of Bask Bank, which I now use as my primary savings account. Rather than earning interest, you can earn valuable American Airlines AAdvantage® miles at an attractive rate.
I’ve now had a Bask Bank account for over a year, so I wanted to reflect on the value I’ve received from this.
How many miles I’ve earned with Bask Bank
I opened a Bask Mileage Savings Account a bit over a year ago, so I wanted to share a bit more about the miles I’ve earned. If you ask me, the ongoing value of a Bask Mileage Savings Account has improved even more since launch:
- Interest rates are even lower than they were when Bask Bank launched, yet the awards structure has remained the same
- At the start of the pandemic many people weren’t thinking about travel, while now a lot more people feel comfortable starting to plan international travel, so earning miles is more on their mind
The timing of Bask Bank launching worked out well for me, as I was in the process of buying a home, so needed to keep some additional cash on hand beyond my usual emergency fund.
I put $100,000 into my Bask Mileage Savings Account, and at the time there was a bonus offering 40,000 bonus AAdvantage® miles if I kept the account funded with that amount for at least 12 months (this bonus is no longer available). I’ve earned that full award because all that money has stayed in the account for the past year (we still haven’t closed on our new place, so I’m no further along than I was a year ago in that regard, but that’s a whole different story).
So over the past year, I’ve earned 140,000 AAdvantage® miles from holding onto that balance — that includes one mile per dollar kept in the account annually, plus the initial bonus of 40,000 miles.
Factoring in the new account bonus, I’ve essentially earned 1.4 AAdvantage® miles for each dollar in my account. By my valuation that’s a 2.1% return, and that’s not even factoring in the advantageous way that these awards are taxed, which increases the rate of return even further.
Note that the introductory bonus that’s currently available offers 1,000 bonus AAdvantage® miles when you deposit $5,000 and maintain that as a minimum daily account balance for at least 90 consecutive days within 120 days of opening the account.
AAdvantage® bonus miles are awarded within 10 business days upon meeting offer qualifications and may take 6-8 weeks to post to your AAdvantage® account. The value of this bonus/offer will be reported to the IRS and the recipient is responsible for any federal, state or local taxes on this offer.
If you ask me, in the current interest rate environment you won’t find a better return on an account that allows you to keep your cash fluid. That’s especially true for those of us who know how to get maximum value out of our miles.
Basics of earning miles with Bask Bank
With Bask Bank, you can earn miles for saving rather than spending, all with a no-fee account. Specifically, you earn one AAdvantage® mile for every dollar deposited annually. That means if you put $10,000 in your Bask Mileage Savings Account for a year, you’ll earn 10,000 miles.
With interest rates as low as they are, I’ve found this to be a phenomenal value. Personally I value AAdvantage® miles at 1.5 cents each, so by my valuation that’s the equivalent of a 1.5% Annual Percentage Yield (APY).
But there’s a further benefit — when you earn cash with a savings account, you pay taxes on the amount of cash you’re earning in interest. Meanwhile Bask Bank issues 1099s for the AAdvantage® miles you earn, though it’s at the conservative valuation of 0.42 cents each, so that’s the equivalent of a 0.42% APY.
The benefit of that lower valuation of miles varies based on your tax bracket. The highest marginal tax bracket is 37%, so at absolute most you’d be paying taxes in the amount of 37% of that 0.42% APY, which is ~0.15 cents per mile, which is about a tenth of what I’d value them. Not only can earning AAdvantage® miles in lieu of interest be lucrative to begin with, but the fact that you can get outsized value way above the taxable value of these miles potentially makes this even better.
It’s probably also worth mentioning that while Bask Bank is fairly new, its parent company, Texas Capital Bank, has been around for a long time. For years I used BankDirect as one of my primary savings accounts, but the value proposition and user experience has been improved significantly with the introduction of Bask Bank.
How I’m redeeming the miles I’ve earned with Bask Bank
Earning miles is one thing, but what did I actually do with the 140,000 AAdvantage® miles I’ve earned so far? There are lots of great uses of AAdvantage® miles, both for travel on American Airlines and oneworld® partners. I recently decided to book a trip to Oman with my dad (it’s a gorgeous country, and there are some resorts there I’ve been looking forward to checking out).
I found award availability for travel on Qatar Airways through Doha, and business class award tickets cost just 70,000 AAdvantage® miles per person for our flights, plus $15.70 in taxes & fees.
That’s an incredible deal.
As a point of comparison, if paying cash, those tickets would have cost nearly $6,000 per person (admittedly there are much better fares available in business class, but this is simply to illustrate the outsized value that’s possible when strategically redeeming miles).
I’d say two business class tickets to Oman are some pretty solid awards to earn for keeping $100,000 in an account, compared to other options that allow you to keep money easily accessible.
To give another recent example of a great use of AAdvantage® miles, over the summer I took my mom to Greece, and we had such a memorable time. I redeemed just 57,500 AAdvantage® miles for a ticket from Tampa to Athens on American and British Airways, which was a great value.
Even if you deposit a smaller amount of cash in a Bask Mileage Savings Account, there are still plenty of worthwhile redemption opportunities. For example, award tickets start at just 6,000 miles one-way, and there are often international award tickets to the Caribbean available for just 10,000 miles one-way.
Furthermore, there are lots of ways to earn AAdvantage® miles, so a Bask Mileage Savings Account could be part of a larger strategy for earning miles.
With a Bask Mileage Savings Account, you can earn one AAdvantage® mile for every dollar deposited annually. With the current interest rate environment, I consider this to be an unbeatable yield. I value AAdvantage® miles at 1.5 cents each, and then there’s the further benefit of how the miles are taxed.
I’ve now had a Bask Mileage Savings Account for about a year, and I earned the bonus of 40,000 miles, plus 100,000 miles just for having that balance for a year. I was able to redeem those miles for two Qatar Airways business class tickets to the Middle East, which is a bit more fun and valuable of an award than I would have otherwise earned for keeping this money liquid, if you ask me.
I don’t think there’s a better option out there for those who are looking to keep some amount of cash in a savings account.
If you don’t yet have a Bask Mileage Savings Account, I’d highly recommend signing up — you can even earn 1,000 bonus AAdvantage® miles when depositing $5,000 and maintaining that balance for at least 90 days.