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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.