Bask Bank Is A Very Compelling Option For Anyone Looking to Travel in the Post-COVID-19 World

We are still in the midst of an horrific pandemic but we have vaccines going in arms now and that is a good time to look at how and when you are going to travel when this pandemic ends and it becomes easier to do so.

I last wrote in some detail about Bask Bank's proposition in February, having first written about it in December 2019.

I found Bask Bank very compelling when it was launched by Texas Capital Bank back then. It provided a chance to earn lots of American Airlines AAdvantage® miles instead of cash. Since I frequently have extracted 5 to 6 cents in value per mile when redeeming AAdvantage® miles for tickets to Hawaii or Europe, I advised folks to consider seriously stocking up on this AAdvantage currency with rates so low.

The comments to these two articles are full of analyses by readers comparing interest income with miles, both before and after considering tax consequences (Bask Bank will send you a 1099 that reports all miles earned at 0.42 cents per mile). While I found Bask Bank to be instantly compelling since I value AAdvantage® miles so highly and did not view a detailed pricing mechanism, these readers’ analyses showed that in many scenarios they were effectively purchasing AAdvantage® miles for under a cent a piece when compared to the prevailing interest rates at the time.

Since those articles were written, we went through a period where nobody was thinking about traveling or earning airline miles. But, as we come out of that period, it is clear that American is going to survive and AAdvantage® miles will again have value to those who want and need to travel by air.

At the same time, interest rates have come down dramatically and they aren’t about to rise any time soon. While the small promotions that Bask Bank offered earlier in the year are largely expired (you will still earn 1,000 AAdvantage® miles for a new account with over $5,000), Bask Bank is still offering 1 point per dollar on deposits annually. Since the best online savings rate is now 0.75% APY and most of the top online one-year CD rates are below that level (compare online CD rates here), those who crunch numbers will find that you can now effectively buy (or earn) AAdvantage® miles at well under 1 penny a point.

And, for anyone who travels or is familiar with the American AAdvantage® program, that is a no-brainer.