Bask Bank Increases Mileage Earning 25%: Now Earn 1.5 AAdvantage Miles Per Dollar On Savings

by Gary Leff

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Update 5/1/23: The Bask Bank Mileage Savings Account now earns 2.5 Miles per $1 Saved Annually.

Update 12/1/22: Bask Bank Mileage Savings Accounts now offer 2 American AAdvantage miles per $1 saved annually.

Effective today Bask Bank is now awarding 1.5 American AAdvantage miles per dollar annually on its Bask Mileage Savings Account, an increase of 25% over the previous 1.2 miles per dollar. And that rate had only gone into effect on August 1. From the time of product inception (about two and a half years ago) until that point, the account had earned 1 mile per dollar. So that’s a 50% increase in earn rate in just over two months.

Regular earn is now 1.5 AAdvantage miles per dollar annually. I value American Airlines AAdvantage® miles at 1.3 cents apiece so earning 1.5 miles per dollar on deposit per year is equivalent in my view to ~ 2% APY. And of course I can get a lot more value out of the miles than that. American Airlines AAdvantage miles are the currency I’ve redeemed the most, for premium cabin awards on Etihad; Qantas; Cathay Pacific; Japan Airlines; British Airways and more.

It’s even better on a tax-adjusted basis. 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 report a value of $42. Net of taxes at a 39% marginal rate the return is roughly equivalent to a savings account that pays 3%. And that’s before the value of the account opening bonus.

Bask Bank Mileage Savings Account

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  3. Gayry, Very helpful that you added the tax comment (0.42 cpm assumption). I remember I looked all over but couldn’t find it. Being in NYC where the total marginal tax rate is 50% the highest savings now 2.5-3% needs to be divided by 2.

  7. But you can ern 2.75% on their interest bearing account. You can buy 150,000 miles on AA.com for $3668.44 or earn $4125 by keeping the money in their interest bearing account. They were probably even run a special to buy them for less. You also earn miles on the purchase of the miles as well.

  8. 1.5%/1.25% -1 = 20% increase, not 25% increase.

    Love the blog and sorry to nit-pick, but I could not help myself

  9. @TrvlGuru:
    (1) For $10,000, with 2.75% cash interest rate, the interest is $275, taxes are $137.5 (50% marginal rate), and the after-tax net proceeds are $137.5
    (2) With 1.5 miles, the “interest” is 15,000 miles, taxes are $0.42/100*15,000*50%= $31.5, and the after-tax proceeds are 15,000 miles – $31.5.

    If you value 1 AAdvantage mile >= 1.06 CPM, you come out ahead for #2. And this is not even taking into consideration the 5000 bonus miles and the fact that these miles will be elite-qualifying Loyalty Points.

  10. @CMX
    You calculations are fine but there are two other things to consider:
    1) AA miles do not accumulate interest when in your AA account and only have value if you redeem them. So if you do not need miles right away it is like spending money on something that you are not going to use. Cash, on the other hand you can use for investing. So even if you buy AA miles at 1.06 CPM but not use them for 5-10 years, your actual cost over other forms of investments is higher. In other words, you can invest your $10k and buy more miles in a few years or not buy any miles at all.
    2) You only need LPs if you are short of your goals for qualification.

  11. Check your accounts – looks like Bask only awarded 1.12 miles/dollar instead of 1.20 for September (in October). File a ticket with them if so.

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