Are you hoping to start travel hacking, but you aren’t into credit cards? Bask Bank offers a savings account that awards savers miles instead of interest. The more you save, the more miles you earn from Bask Bank.
Should you switch your savings and start earning miles? We give you the rundown on Bask Bank’s unique twist on a high-yield savings account.
See how Bask Bank compares to other banks on our list of high yield savings account.
- Earn airline miles instead of cash on your savings account
- Depending on mileage value, could be a great deal
- If you have $20,000 or more, this can be a good value
Bask Bank Details
What Is Bask Bank?
Bask Bank is an FDIC-insured division of a bank that offers a high-yield savings account with a twist. Instead of offering money as interest, Bask Bank offers airline miles good on American Airlines.
You’ll earn one mile per year per dollar you have in the account. For example, if you have $12,000 deposited into the account, you’ll earn 1,000 miles per month.
In addition to the typical miles as interest payments, accountholders can also earn 1,000 miles for providing feedback on the account. This is a one-time bonus only.
The deposits in Bask Bank are FDIC-insured up to $250,000, and airline miles are deposited directly to your American Airlines miles account.
Are Airline Miles Better Than Interest?
When you earn interest on your money, it’s easy to say that a 1.9% APY is worth $190 per year when you have $10,000 saved. So are airline miles worth more or less than interest in a high-yield savings account? In my opinion, the answer depends a lot on how much you value travel; in particular, how much you value business class flight travel.
A round-trip, domestic flight (lower 48 states only) typically costs 25,000 miles for economy fare. Assuming a flight value of $300, the value of each mile is just 1.2 cents. A 1.2% APY is pathetic. You can find much better rates on high-yield bank accounts.
But let’s say your goal is to travel in business class to Amsterdam. A first-class ticket starts at $2,600. The total cost of your ticket will be 115,000 miles. That’s a value of 2.26 cents per mile. Further flights and bigger upgrades mean the miles become a lot more valuable.
That said, even if you can exchange your miles for flights that are in the range of four to five cents per dollar, you need to watch out for a few gotchas with Bask Bank’s AAdvantage® miles. First, the miles are taxed as interest. The site doesn’t give a specific exchange rate, but assume it will be in the neighborhood of one cent per mile.
Second, and perhaps crushing for real travel hackers, the AAdvantage® miles awarded through Bask Bank do not apply toward boosting your elite status on American Airlines.
Can Bask Bank Help Me Travel-Hack?
If you’re someone who has less than $10,000 in savings, Bask Bank is probably not a great bank for you. For example, if you’ve got $5,000, it will take five years to earn enough points to pay for one round-trip domestic flight. With so many possible changes in the next five years, it seems like money would come in more handy than points.
By contrast, if you’ve got a ton of money in savings (say $50,000 or more), Bask Bank could provide a lot of value, especially if you want to travel internationally (or even to Hawaii or Alaska). With a $60,000 balance, you can earn a round-trip to Europe in just one year. And you can do that without having to open another credit card.
Should I Switch My Savings to Bask Bank?
Over the past two or so years, rates on savings accounts have ever so slowly started to climb upwards, and banks are finally starting to compete for deposits. The miles as interest that Bask Bank is offering are compelling, especially if you highly value travel.
In my opinion, people who already fly at least once per year, and have at least $20,000 in savings, could see a lot of value from Bask Bank. Those who fly less frequently, only travel in the lower 48 states, or have less than $20,000 in savings, won’t earn valuable flights fast enough. For people in that camp, a conventional high-yield savings account makes more sense than Bask Bank.
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Hannah is a wife, mom, and described personal finance geek. She excels with spreadsheets (and puns)! She regularly explores in-depth financial topics and enjoys looking at the latest tools and trends with money.