<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Bourne:
Though Bankdirect gives miles, it's APR is about a 1% less than comparable products.
With a $100K CD purchase, you are technically paying...
$1K(the 1% spread) for 100K miles on a 2Yr CD
$1K(the 1% spread) for 50K miles on a 1Yr CD
$1K(the 1% spread) for 25K miles on a 6month CD
As you can see, it makes sense only if you buy the 2Yr CD. And within the two year term, your "cost" is going to increase as the "spread" increases because of rate hikes.
IMHO, its a Catch 22 situation. If you are a highly conservative investor, go for it. Otherwise, take a higher APR on a 1Yr CD somewhere else.
[This message has been edited by Bourne (edited 03-12-2003).]</font>
You might want to take tax considerations into account when computing the cost of miles. It would be more appropriate to consider the after-tax spread over bankdirect when making a decision.