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Update 12/1/22: Bask Bank Mileage Savings Accounts now offer 2 American AAdvantage® miles per $1 saved annually.
Update 5/1/23: The Bask Bank Mileage Savings Account now earns 2.5 Miles per $1 Saved Annually.
Update 11/1/24: The Bask Bank Mileage Savings account now earns 2 miles per $1 saved annually.
I first wrote about Bask Bank and the Bask Savings Account at the beginning of 2020. I’ve been saving and earning with them for a year and the mileage-earning strategy has proven-out.
That’s not really a surprise. I’ve been a customer of Bask Bank’s parent, Texas Capital Bank, since July 2003. But it’s great to see that the value proposition has remained constant throughout the past year’s turmoil, and even looks more attractive compared to today’s alternatives.
A Consistent, Strong Value Proposition In A Changing World
The world is a lot different than it was when Bask Bank launched. Even with the pandemic, a global recession, and lower interest rates the Bask Savings Account value proposition has remained the same, awarding 1 American Airlines AAdvantage® mile per dollar saved annually. The account has no fees. Earning the same miles as a year ago, in a world of lower interest rates, makes even more sense than it did when I started saving.
What’s more, American Airlines AAdvantage® miles have maintained value, even with a ton of changes across the industry. While other airlines have changed their award pricing, American has maintained its award chart. And they’ve made the huge move to eliminate mileage redeposit fees. You can book an award ticket, and if you decide to cancel your trip you can get the miles back with no fee – just cancel before your first flight is scheduled to depart.
While Bask Bank‘s value proposition has remained the same, the miles earned with them have become more flexible. That’s great for planning travel in an uncertain world.
America Airlines Airbus A321T First Class
The Most Transparent Tax Treatment I’ve Seen For Miles
When I’ve won miles as a prize I’ve sometimes had the contest sponsor value those miles based on the full retail price at which the loyalty program sells miles, even though that’s not the best price a consumer can often get nor is it how much miles are earned. In those cases I’ve recommended disputing the value reported on the 1099.
In contrast, Bask Bank did a good job determining how they should be reporting the miles earned as a return on accounts. Bask Bank’s terms and conditions say “[m]iles are currently valued at 0.42 cents per mile, the equivalent of 0.42% annual percentage yield.” So for every 10,000 miles earned on deposits they reported a value of $42.
Now that I’ve had my Bask Savings Account for a year I’ve gotten my first 1099-INT form from the bank. I don’t just appreciate the thoughtful approach to valuing the miles for tax reporting, but also that they are really transparent about it. I don’t recall seeing anybody else state up front the value of miles to expect for tax reporting.
Get An Account Opening Bonus
Something else that hasn’t changed recently is the Bask Savings Account opening bonus, which has been extended through June 30, 2021: you earn an extra 1,000 bonus miles when you hold a minimum daily balance of $5,000 for 90 consecutive days within 120 days of opening an account.
How Saving With Bask Bank Gives You A Superior Return
Let’s take that $10,000 deposit example. If you placed the funds in your account immediately upon opening and left them for a year, you’d earn 11,000 miles (10,000 miles for the account balance plus 1000 miles account opening bonus).
I have valued American AAdvantage miles at 1.4 cents apiece. So I consider 11,000 miles to be worth $154.
In contrast, if you managed to earn 0.5% in a competitor’s savings account, that would generate $50 after a year. The return from a Bask Savings Account in this case is three times as high.
And things get even better when we look at net after tax. Let’s say you’re in the 24% federal tax bracket and live in a state with no income tax. Your net on that 0.5% savings account would be just $38.
The 1099 you’d get from Bask Bank for 11,000 miles would report $46.20. Your tax liability on the miles in the 24% bracket would be $11.09. I’d consider your net value, then, to be $142.91. That’s nearly 3.8 times the return of the other hypothetical savings account paying half a percent.
Earn As Many Miles As You Choose, Without Spending Any Money
Earning just one mile with a Bask Savings Account keeps your AAdvantage® miles from expiring. Choose how much money to deposit and you choose how many miles to earn. And unlike other ways to earn large amounts of miles, this doesn’t involve spending any money. You can deposit money when you need miles, and take money out of the account when you want to spend it (“new customers can make up to three online transfers per month for a maximum total of $100,000”).
My travel spending has been way down over the last year, and know the same is true for many readers. You can take your travel budget and put it into a Bask Savings Account, and earn the miles for your trip while you set aside cash to cover costs beside air.
Bask Bank and BankDirect are divisions of Texas Capital Bank, N.A. Member FDIC. The sum of your total deposits with (i) Bask Bank; (ii) BankDirect; and (iii) Texas Capital Bank, N.A. are insured up to $250,000. Additional coverage may be available depending on how your assets are held.
Account Opening Award valid through June 30, 2021. Accounts must be funded within 90 days of opening. 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 offer will be reported to the IRS and the recipient is responsible for any federal, state or local taxes on this offer.
NO! It has not proven out! My family has 2 accounts with Bask. We followed all the rules. Bask has not put in the promotion miles at all. Plain and simple Bask sucks as a bank! Poor customer service, no attention to detail, and total lack of caring for customers. Never again will I deal with such an unknown!
@JohnB – I’ve received my promotion bonus miles, what miles are you missing – are you sure you earned the bonus and waited the specified time? Yours is the first and only such complaint like this that I’ve heard. I’d be happy to get help following up on this if you’ll email me.
You say there is no limit–is this true? We keep a mid 6-figures in Chase savings (!) because that’s the “safe” of our portfolio allocated to Cash. [Note: Our other assets are all in stocks, ETFs, high yield bond funds, and trusts, so it’s not like we are ill-informed geezers who are hoarding cash.]
I’ll be happy to earn a half million miles each year, if it’s possible.
I received the bonus miles… but also a 1099
Except American miles are increasingly worthless and hard to use. Every dummy miles booking I’ve tried over the next few months- domestic, international, economy, premium class- returns mile values substantially below 1¢ per mile. You’ve astutely commented on this counterintuitive phenomenon of airlines/hotels jacking up points pricing during the pandemic instead of using reasonably priced fares/rooms to induce loyal travelers out of their homes. I appreciate you shining a light on that practice, but the necessary corollary is that it substantially eroded the value proposition of collecting points, including through credit cards and a Bask account. Hard for earning miles to have “proven out” when airlines are working feverishly to devalue them (not to mention the out-of-pocket hit of paying a 1099 on Bask’s miles).
@Kimmie A — If you have $500K sitting around, yes it’s possible. If it’s a joint account, it’ll be FDIC insured to $500K.
I would double check if there is a limit on large balances for mileage earning before opening the account, but I have not seen anything about a limit.
We’ve received very friendly, professional service every time we’ve spoken to the bank.
@Gary – I agree with your analysis and that this beats most of the current alternatives. Given that all the major “high yield” savings accounts (Ally, Amex, etc.) are down to about 0.50%, how long/how can Bask can keep paying 1 mile per dollar? Presumably they are buying these miles at well over a penny each.
No problems with them here as well. I signed up last year when the initial bonus was bigger. Have only kept $1,000 in the account due to not really having anywhere to go with the pandemic.
There’s no limit. I have 1.4m in bask bank and now trying to find ways to spend the miles. However, without international travel, I’m getting barely 1c per mile on redemption.
I leave $20 in my Bask account. It gives me 2 miles/month. This is an easy way to not have to worry about keeping my AA account alive.
I’ve gotten all of the promotional miles promised. No issues
And I can always get better value using miles than the .6 cents available in a high yield savings account
I’ve earned over 86K miles with this promotion. Looks like my 110K AA biz class round trip to CDG will become a reality in 2021 with little to no effort on my part. Very satisfied with the 1099-INT and with this return as compared to an interest-bearing savings account.
Add me to list of Bask Bank fans. I just wished they worked out a deal with AA to award lifetime miles for the miles earned (similar to the promotion from last year where you could earn lifetime miles with credit card spend).
Gary – why don’t you pitch that to the Bask team? Ideally, you could earn both redeemable and elite or lifetime miles and if not both, then maybe give people the option between choosing redeemable miles and elite/lifetime miles.
We recieved very good services from bask bank.
I’ve been very happy with Bask Bank. I received the promotional bonus and get 10,000 miles per month. They have deposited the miles into my account like clockwork. Yes it can be hard to find flights on American that are worth over 1.4 cents per mile so I use them for last minute domestic trips that would have cost a lot more to book with money. I was able to get the exact flight I wanted from Roanoke to Charleston for 7500 miles one way the night before. That same trip would have cost $385! They are out there you just have to look harder sometimes.
Bask Bank did not meet the January 31 deadline to mail the 2020 Tax forms to customers. My 1099 arrived in mid February, long after I had filed my taxes. So I just had to amend my federal tax return to stay honest and clean. Poor planning and execution on Bask’s part.
Edit to my above comment: Just used 70K of the 86K to book Etihad business to the Maldives next month. Thanks Bask!
I expect like me, most people keep their money in a Trust and Bask Bank doesn’t support trusts. So doesn’t work.
Classy People
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The IRS reported that they were depositing my refund into my account at Texas Capital Bank yesterday. The problem for me, the account was closed. Today, I asked TCB if they could intercept the incoming ACH and redirect it into my other account there, expecting that it couldn’t be done. Not so. They did stop it being returned to the black hole of the IRS and sent it to my new account.
Appreciated and will not be forgotten.
Gary—I too have been a very long-time customer of Bank Direct/Bask Bank. Since you have contacts there, can you find out when (if ever) their IT can handle a joint account (with spouse)? Seems pretty basic for a bank, especially since Bask was built on a new platform.
No issues with bask. A few years ago I would passed on this. Interest rates being near zero it makes sense for me. When I book tickets to London at 62.5 or so one way business class I feel I have good value I have found space and booked it. Time will tell if I can go this winter
Contrary to what others have said, I believe that when I opened a Bask account recently, I was told there was a maximum of $100,000 that could be deposited in an AA miles account. Maybe I’m mistaken, but that’s what I recall.
Juergen Heise – everybody and their cousin missed that date. I didn’t get JPM until 2/17. I didn’t get etrade until 2/5.
Besides, wasn’t filling closed until 2/15?
@ Juergen Heise — Sounds like poor planning on your part, especially since it was made very clear that a 1099 would be forthcoming.
@ Lan Sluder — There is NOT a $100,000 cap on earning miles with Bask. There is a $250,000 cap on FDIC coverage.
@ MT — Most people do not keep their money in a trust.
If AA takes all your points, can you make a tax deduction?
I think Bask Bank is terrific. If you add two beneficiaries to your account you can get $500,000 FDIC insurance per account, so two people can earn 1 million miles per year with full FDIC insurance.
I’ve been a customer for over a year.