Lindsy

I've only heard of Citi threatening... not of BD (or anyone else) actually reporting. So I wondered if this was part of the recent tax bill.

rajuabju

Well, I confirmed the 0.42% rate is correct, as of now-

https://www.baskbank.com/sites/defau...isclosures.pdf
Page 18

Now it just becomes a matter of calculations for value I guess. at 0.42%, I think for most people, still ends up being better than most MM/Savings Accounts, depending on usage of miles of course.

EmAAx

This sucks, but I still think BankDirect checking is an ok deal. If you have $50k in a checking account, you'll get a 1099 for $210. Correct me if I'm wrong, but you only pay taxes on whatever your tax bracket is. Let's say you are at a 33% bracket, you pay $70 in tax and $144 for the account fee which is $214 for 60,000 miles. Your cost is $0.0035/mile, well below the assumed value of $0.014/mile. In this scenario, I calculate about a 1% return on your money. You can do better with 4 week Treasury Bills or something like Capital One 360 savings which they are advertising at 1.8%, but these also aren't checking accounts.

With that said, the continued devaluation is getting worse and may well go the DL/UA direction and get really bad.

josephstern

It's definitely about your personal valuation of the miles. For me, not worthwhile as rates are pretty close to 2% in Money Markets:

https://www.bankrate.com/banking/money-market/rates/

rfrost

Since I generally only redeem AAwards when I consider the mileage cost to be reasonable, I think my current stash will last me for quite a long time. For me, it's not worth it--I don't use the checking capability on my BD accounts, and I think I'll get a better return with T-bills. I also have doubts about the motivations here and whether the "good faith" valuation quoted will stick in 13 months. So I'll be closing my BD accounts. And not opening a Bash one.

lairdb

Close, except you need to keep it enough above $50,000 to prevent the fees dropping you to 4,900 miles/month. Call it $50,145 deposit, minus $144 in fees, plus $5.04 in interest paid, yields 60,000 miles and your $70 tax liability. Ignore time value of money, and not paying tax until April, and etc. etc.: 70+144-5 = $209 for 60,000 miles = $0.00348/mile.

But that's not the best way to look at it, since it doesn't factor opportunity cost.

I could put that $50,000 at Fidelity or another high yield CMA; let's assume 1.9% APY; that's $950. So, at BankDirect or Bask, regardless, I put $50,145 for a year and get 60,000 miles, which at your (imo generous) $0.014 is $840 of value, minus $209 out of my pocket (at BankDirect) or $65 out of my pocket at Bask -- or I could have $950 of cash.

Run that backwards, and at $0.014/mile valuation, APY on cash would have to be below 1.55% for Bask to make sense, and below 1.26% for BankDirect to make sense. I'm going to wait for my next mile deposit (about a week) and then close the BankDirect.

Edit: yuck; I didn't account for tax on the interest. That makes it a lot tighter: $950 of cash minus $313 of tax = $637 for the CMA option. Still debatable, but closer.

schistosomiasis

At 1.5 cents a mile, this is still worth 2% to me: 60000 miles is $900, subtract $144 in monthly fees (until account dormant), as well as 1099 for $252 at 33% bracket is another $84; $228 total deducted from $900 is $672 post tax, which would be $1008 pretax. 1000/50000 is 2%.

Can someone enlighten me or tell me which post to look at for Bask bank earning rates and opening bonuses? I carefully read the posts above and can't quite figure it out. My understanding is you can keep up to $250,000 FDIC insured in this account (or $200,000 plus $50,0000 already in Bank Direct?). And there is no monthly fee but there is a 5000 mile open bonus? The earning rates are slightly lower than Bank Direct? Thanks in advance.

MilesTalk

It�s 1,000 miles per $1,000 per year now, slightly less than with BD checking.

There�s also a 20k bonus for keeping $50,000 in for a year I haven�t seen mentioned here. FDIC limit would be shared between BD and Bask as they are both Texas Capital Bank.

I ran some math and have more details on the bonuses in this post.

schistosomiasis

Thanks for this excellent post- isn't it kinda funny how none of the other points bloggers have any information on this? Oh yeah they can't earn a buck off this.

Would be helpful if in your post you mentioned if there was a $12/month fee like Bank Direct? Or please reply here too

MilesTalk

No fees with Bask...

mia

Scroll back:

https://www.flyertalk.com/forum/31765549-post2113.html

dldkjones

I'm unclear whether Bank Direct mileage checking accounts will continue under Bank Direct or be transferred over to Bask Bank after 12/31/19. The website says Bank Direct no longer offers the product but does not say if they will still service the accounts already opened.

MilesTalk

There's been no communication so far about BD accounts being moved, just that you can't open new ones. Not sure about the future but my sense is for now they will maintain both products.

sam007

has anybody moved money to bask or simply waiting for BD to automatically do it? I have 100k and do want to take benefit of the 20k additional AA points

mia

At this point there is no evidence that BankDirect will automatically transfer any funds or accounts. Instead, they have sent existing account holders a letter explaining that a 1099 will be issued by BankDirect for miles awarded in 2020.