As a kid, I remember my parents explaining to me how savings accounts work. By keeping my money with the bank, they’d pay me a little something extra, allowing my account to grow. Yes, the concept of savings accounts hasn’t changed a whole heck of a lot since, well, ever — but now Bask Bank has a novel idea.
The recently-launched Bask Bank is introducing a unique twist on a saving account product: paying interest in airline miles instead of cash. More specifically, Bask account holders can earn American Airlines AAdvantage miles, allowing them to turn their parked cash into free flights.
So is Bask Bank a good idea and is it worth trying out? Let’s take a closer look at what they have to offer.
Getting Started with Bask Bank
To open an account with Bask Bank, you’ll need to provide some basic information. This includes your name, date of birth, physical address, Social Security number, and more. Additionally the bank warns that those who have frozen their credit reports will need to temporarily thaw before applying. Although opening a Bask account won’t impact your score (they don’t do a “hard pull”), they will apparently use the info to verify your identity. Incidentally, all of my credit reports are frozen and I’m pretty sure I didn’t submit lifts before opening my Bask account and I had no issues. Just the same be prepared for this request.
As part of the account-opening process, you’ll of course also need to set up an account username and password. Once that’s all set, you’ll be ready to fund your account.
In order to fund your account, you’ll need to link to another bank account so that you can initiate transfers. There are two main options for doing this: connecting via Plaid or adding manually.
Going the Plaid route, you’ll just need to log into the account you’re looking to connect and — voila — you’re done. If you prefer the manual option or Plaid doesn’t yet support your institution, you can also elect to link your account by providing Bask your routing and account number. Then, Bask will make microdeposits to confirm the connection.
Once your account is set up, you also have the option of depositing checks via the Bask Bank app. Like many other banking apps, to deposit checks in this manner, you’ll just need to submit photos of them. To be honest, I was slightly surprised to see Bask offered this functionality but it’s definitely nice to have.
Linking your AAdvantage
Since keeping money with Bask yields AAdvantage miles, you’ll also want to link an American Airlines account. When I joined Bask, I realized I didn’t actually have an AAdvantage account yet. If you find yourself in the same boat (or on the same plane, I suppose), just head to AA.com to complete that process. When you do, make sure to note your AAdvantage number because you’ll need to provide it to Bask. Then, it’s time to start racking up the miles.
The idea of earning airline miles instead of cash interest may seem straightforward enough. Yet the hard part is determining how the accrual of miles will correspond to your cash balance. So what did Bask decide?
Currently, for every dollar you hold in your account, you’ll earn one AAdvantage mile on an annual basis. Therefore, if you keep $10,000 in your account for a full year, you’ll accrue a total 10,000 miles throughout the year. On a month-to-month basis, the miles you earn will be based on the average monthly balance).
Current (and past) Bask Bank bonuses
When they first debuted, Bask Bank offered a number of bonuses to entice new customers and set them on their way towards earning miles. Since then, many of these offers have fallen by the wayside. However, there is still a current bonus for new customers.
As of April 28th, 2021, those who deposit $5,000 in their Bask Bank account and hold that balance for at least 90 days (within 120 days of opening the account) will earn a 1,000 AAdvantage mile bonus. Also interesting is that, unlike most credit card intro bonuses, Bask warns “The value of this bonus offer will be reported to the IRS and the recipient is responsible for any federal, state or local taxes on this offer.” Of course, with it only being 1,000 miles, this shouldn’t cause too big of a tax headache.
For the record, at the time that I joined Bask, I earned a 5,000-mile bonus for depositing just $1,000. Since then, I’ve also seen 5,000-mile bonuses for depositing at least $5,000. Unfortunately, not only has this welcome bonus continued to be reduced but Bask has also done away with some of its other bonuses. For example, the bank previously offered tiered bonuses, allowing customers to earn even larger point sums by making initial deposits of up to $100,000. On top of that, they also once had “feedback bonuses” where users could score an easy 1,000 AAdvantage miles just for answering a few questions about their experience with Bask.
I suspect that the reduction in bonuses has to do with the current state of interest rates and the fact that Bask’s model doesn’t allow for easy adjustments to their APY-equivalent mile payout . Therefore, if you’re not in a rush to start earning miles, it may be worth waiting until Bask (hopefully) rolls out a higher intro bonus in the future.
Fees and FDIC
Something important to note is that Bask Bank is a division of Texas Capital Bank. Thus, funds are FDIC insured up to $250,000 per depositor.
I should also mention that Bask Bank doesn’t charge any fees for their savings account. However their terms and disclosures page does warn that “external financial institutions and/or other third parties may charge fees for the use of their certain services or certain activities.” Still, there’s no need to worry about keeping a minimum balance or incurring maintenance fees with Bask.
My Experience with Bank Bank So Far
Slow incoming transfer
While the process of signing-up for and setting up my Bask Bank account was easy, I was a little worried when it took several days for my initial transfer to fully show up in my account. Although I could see that the money came out of my other bank account, it was still “pending” in Bask for nearly a week. At long last, my $1,000 fully posted to my account. Sure, I was never actually scared that my money would just disappear into the ether, but I feel like transfers shouldn’t take that long. It is possible that this being my first deposit was also a factor, so hopefully future fund transfers prove to be a bit speedier.
Earning my bonuses and accruing miles
So where will my accrued points take me? Apparently not very far. During some sample searches, I found that I could use my points for a flight to Chicago or Dallas… one-way. To be fair, though, the retail on these DFW flights was still around $250, which is not a bad sign-up bonus for an account that only required a $1,000 deposit (again, you’d now need to deposit at least $5,000 to earn a bonus of just 1,000 miles).
I now have more than 7,200 AAdvantage miles in my account after a year with Bask holding that same $1,000. With my intro bonus and (no longer offered) feedback bonus, this math means that Bask’s stated earnings rate was correct. Meanwhile, those miles still aren’t enough to actually get me anywhere, but they could come in handy in the future. Plus, with interest rates still so low, perhaps it’s time I move more money to Bask to hopefully accelerate this point accent.
Low-key site design
Lastly, I feel I should mention Bask Bank’s website and app design. While they’re not bad by any means, they are rather basic. Unlike the various personal finance apps I usually review that often have sleek aesthetics, Bask’s site and app are quite stripped down without many bells or whistles — and I might be crazy but I think the logo on their site is slightly pixelated.
At the end of the day, what’s important is functionality, which Bask seems to offer so far. So, while I wouldn’t hate it if the bank added some flair to its UI, I can’t really complain.
The Pros and Cons of Earning Miles
Pro: Accrual is unaffected by Fed rate cuts (so far)
I have to say that Bask Bank came around at a pretty good time (or bad time depending on how you look at it). The week I joined saw several of my online bank accounts cut their interest rates in connection with the Federal Reserve doing the same. Meanwhile my Bask account didn’t change its mileage accrual at all. Of course, as I noted, the bank has axed their bonuses since I joined — which may or may not be tied to rate cuts — but they have not altered their mile accrual rates. So kudos to them for staying strong on that one.
Con: Miles are susceptible to devaluation
Although the number of miles you earn might not be contingent on the Fed’s interest benchmarks, there is always the chance that those miles won’t be worth as much in the coming years as they are today. As frequent flier miles have grown in popularity, some have also fallen victim to devaluation, with airlines adjusting their award charts and redemptions. To be fair, any currency is technically susceptible to changes in value such as inflation — but, in these cases, there are far more factors at play than an airline’s whims and profits.
Pro: Keeps miles from expiring
One downside of AAdvantage miles in particular is that, compared to other airlines like Southwest and Delta that have since moved to miles that never expire, American’s do. In fact miles will expire 18 months after you earn them unless there is new activity in your account. That last note is actually pretty crucial here as, if you’re earning AAdvantage miles via Bask Bank, you’ll consistently be adding to your mileage account and, thus, preventing your miles from expiring. Come to think of it, this is actually a pretty major loophole that really ups Bask’s appeal overall.
Con: Mileage earnings don’t compound
With a traditional savings account, one of the largest benefits is that the interest you earn compounds. Put simply, this means that you start earning interest on the interest you’ve already received, further increasing your return. Unfortunately, that’s something the Bask Bank account doesn’t offer. Since miles earned are based on your cash balance — and interest paid doesn’t result in additional cash — there is no opportunity for compounding.
Mixed: Varying value depending on the redemption
As my tag of “mixed” suggests, this could be a pro or a con depending on your situation. For some users, earning cash (from other accounts) will be more beneficial and give them the best value. Meanwhile those who are adept at finding rewards flights and are willing to put in the research required to maximize their miles could possibly get a great deal. On a similar note, I should mention that AAdvantage miles may be redeemable for non-travel items such as gift cards, although these rewards typically come at far less favorable redemption rates.
To drive home this point, when I was looking at flights, I noticed that select flights to ORD and DFW were both 5K miles despite the latter set of flights retailing for nearly double (around $250 vs. $119). Oddly, some Chicago flights that were $206 — still less than the Dallas flights — cost 12.5K miles. As for the gift card option, my 7,000+ points would qualify me for… a $25 card! Now you can understand why the phrase “your mileage may vary” is so heavily used in the points and miles community.
Final Thoughts on Bask Bank
To be sure, Bask Bank is definitely an interesting idea whose time has come. Personally I could easily imagine points and miles enthusiasts flocking to the offering to further bulk up their award travel wallets. At the same time, I honestly don’t think I’m well-versed enough in that world to truly determine if the account is a good deal or not just yet — but I’m inclined to think it’s a pretty solid option given the super-low interest rates that are still sulking around.
Despite my hesitation, I definitely see a benefit in Bask Bank for those who are either frequent American Airlines flyers or for those who may have flown American in the not-too-distant past and who don’t want to let their accrued miles go to waste. As I mentioned earlier, the loophole of your Bask interest keeping your AAdvantage account active, preventing mileage expiration is pretty darn great. Of course that hole can always be plugged — although I feel like it would be difficult for American to single out Bask in any kind of policy change. In fact, I think the more likely scenario is the airline going to an expiration-free model like some of the competitors recently have.
Ultimately, while I’m happy with my Bask Bank experience so far and am excited about the handful of AAdvantage miles I now have at my disposal, I don’t foresee making the account a main fixture of my personal finance strategy. Instead, I’ll probably keep some funds in it to keep my American Airlines account active — and perhaps slowly save up for a return flight. But, if you’re a frequent traveler who puts more value in AAdvantage miles, I think Bask Bank could be a smart option.
Also published on Medium.