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Should you earn American Airlines AAdvantage® miles instead of cash on your savings?

Oct. 14, 2020
6 min read
Should you earn American Airlines AAdvantage® miles instead of cash on your savings?
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With savings accounts currently paying little-to-no interest, you might be considering other ways to make the most of the money you have stashed away. And if you're a miles enthusiast in this situation, you may be thinking about earning American Airlines AAdvantage® miles instead of interest.

If you're not yet familiar with Bask Bank, the digital bank, which launched in January 2020, awards its customers with one AAdvantage® mile for every dollar saved, annually. So, if you deposit $60,000 over the course of a year, you'd earn 60,000 AAdvantage® miles. There's no limit to the number of miles you can earn.

Earning AAdvantage® miles for your savings is potentially very lucrative, especially if you're strategic about how you redeem your miles. Plus, miles can often provide more options than cash, especially in this age of low interest rates. When you have a big miles balance, the opportunity to book a flight without spending money is always available. You can take a trip whenever you want without worrying about the financial impact.

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At the end of the day, the AAdvantage® miles you earn from a Bask Savings Account may be worth more to you than the interest you'd earn from a savings account at another institution.

Most banks are paying less than 1.00% Annual Percentage Yield in interest right now. Let's say you're earning a respectable .08% APY on $60,000 in your current savings account. Over the course of a year, that yields $48 in interest. If you were to save $60,000 with Bask Bank instead, you'd earn 60,000 miles. One AAdvantage® mile is worth 1.4 cents at TPG's current valuation, making those miles worth $840 for a future vacation. Bask Bank will report the value of the miles to the IRS and you are responsible for any federal, state or local taxes on this offer. Bask Bank is currently reporting the value at just 0.42 cents per mile. At TPG, we find most travelers get much more value out them.

For instance those 60,000 miles are enough for a round-trip economy ticket to Europe or a one-way business class ticket to Japan or Korea.

This is the perfect time to start saving for your next trip. If you're interested in racking up AAdvantage® miles, there's a good chance you'll get more long-term value out of earning one mile per dollar annually than earning a paltry interest rate on your savings.

Plus, Bask Bank doesn't charge any fees, which means you won't be paying anything to earn miles this way. With some savings accounts, you'll find annual and minimum balance fees or other costs that eat away at your return.

Keep in mind as well that American Airlines is one of the largest airlines in the world. It has an extensive route network, with more than a dozen airline partners. It's also part of the growing oneworld alliance®. That means you can do a lot with the miles that you accumulate.

Of course, the most straightforward way to redeem miles is to book an American Airlines flight. 60,000 AAdvantage® miles are enough for a round-trip ticket to Europe. Within the U.S., you can score a domestic round-trip flight for just 15,000 miles, or fly business class from coast to coast for 50,000.

Here are a few additional things to consider if you're thinking about earning AAdvantage® miles instead of interest:

Miles provide more option value than cash

Bask Bank offers real worth for life maximizers. These are the financially savvy points and mileage enthusiasts who are often thinking about how to maximize the return they get.

If that describes you, then you probably enjoy the optionality that miles offer. You understand that while it's sometimes better to spend cash over miles, there's real value to having a stash of miles to use in your portfolio. That's because the more your mileage balance grows, the more access you have to new and exciting experiences.

In other words, if you have a large accumulation of miles, you always have the option to travel without dipping into your cash reserves. For instance, you can book a business or first-class flight to Europe and travel in luxury, or you can be more strategic with your miles and take several economy trips. Either way, there's no cash spending involved.

There's a bonus

The Bask Savings Account comes with an enticing incentive.

For customers who have not previously opened a Bask Savings Account, if you fund an account and hold a minimum balance of $5,000 for 90 consecutive days within 120 days of opening it, you will get 1,000 bonus miles. This offer is valid until 12/31/2020*.

You're encouraged to save more

Saving can be discouraging when all you get in return is low interest earnings. But if you're a frequent traveler looking for a way to inspire yourself to save more, earning miles for saving could be a way to do just that.

If you already use credit cards to earn miles, and you're looking to supplement the miles you earn each year without spending more, Bask Bank may be a great addition to your financial toolbelt.

Of course, this doesn't have to serve as your primary or secondary savings account. Instead, it can simply be a place you keep savings in order to top off the miles you earn from your travel-rewards cards each year.

It's a safe way to earn miles

Bask Bank is a division of Texas Capital Bank, N.A., which is an established institution that boasts a 20-year relationship with American Airlines. It's also insured by the FDIC, so you can rest assured that your money, and your miles, are safe.

Bottom line

Earning miles instead of interest for your savings can be a lucrative proposition. If you're looking for an easy way to earn miles, consider opening an account at Bask Bank. It's the only savings account that earns AAdvantage® miles instead of interest, providing savvy travelers with a valuable option for building their miles balance alongside their travel rewards credit cards.

Get rewarded with miles that grow as your savings does and open an account at Bask Bank today.

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.

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.

*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.

Featured image by An American Airlines 777-200ER (Photo by Alberto Riva / The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023