Originally Posted by
webazoid
so w/ a brokerage cash account, u put in $100,000, you get out 100,000 six months later? Assuming 0.5%-1% interest rate if u were to put in a CD (optimistically), that'd be like not getting $500-1,000/year or $250-500 for 6 months in order to get 50,000 miles?
That was an excellent question and the answer is "yes". As to the no-risk interest bearing accounts I keep reading about, lol, Fidelity Cash pays about .02% or so at the moment. Their 3rd party deposit accounts, which can pay a bit more, are not available outside of IRAs. Money markets that can be purchased through Fidelity pay about the same as cash right (maybe .03%), and add a tiny but real element of risk. Short term CDs are uncompetitive at Fidelity but you might get .3% for a year CD at the Bank of China. Unless you want to take on significant risk by purchasing a bond or a stock, you will be losing out on cash income by doing this deal. If you already are an investor, no big deal. But if you're doing it just for the miles, something to consider.