With 40% marginal tax rate and 200k in BD you are getting a better value when you value miles at 1.56cpm or more.

I am managing more than 8 accounts. Its not really that big a deal once you do the initial setup. You use technology for the grunt work. What's the extra work during tax time? Is there anything more than looking at the 1099's and adding up a dozen numbers?

it is sad, but i think i am going to stay with this for now... but i dont have close to 200K in the account. so i will try to find a way to push more money in that account to lower the cost of the miles obtained.

Thank you!

I forgot about that

Where can we move the money & earn miles, even if it's one time? I already got Delta points with Fidelity. Anything else?

AA miles yield far more than 1.56 cpm for us, even in coach just fyi. It all depends on your travel pattern and how well-versed you are when using the miles. Our last 4 coach redemption each would yield at least 3 to 5 cpm if we purchased those tickets. 2 of them actually out of necessity - one-way home from Europe, literally May of each the past 2 years - 20K off peak coach award that would cost over $1,500 to purchase.

Needless to say, many who put $200K or more at BD are not just for redeeming a coach award, even to international destinations. How about a J OneWorld award to fly 25K miles up to 16 stopovers sounds to you? That would cost 150K AA miles. Or, 130K to fly only 20K miles. Some folks actually pay to fly these kind of itineraries - just check out the OneWorld Forum - a great way to earn miles when combined it with an award to get you to the origination point where the fare would be the cheapest. Inevitably such origination points would be outside US. There are many ways to value AA miles, and one would yield a very wide range, all depends on how one uses it, naturally.

Just to make sure all financial institutions to send you the 1099 in time is a task that not many are willing to pay attention to. lol.

You are allowed to have two BankDirect accounts. With 120,000 miles for no fee and 240,000 AAdvantage miles for $144, you will end up with 360,000 miles per year for $144.00.

Where did you find this info on BD website?

Are you talking about the Money Market Account that earns 1 mile per $20 balance? (I forget the exact rate but it is inferior to the checking account.)

Good for you. I value them around 1.5cpm.

It seems ceieoc is referring to one checking account and one MM account, each with an average balance of $200,000 thus 240,000 miles and $144 fees for the checking account and 120,000 miles and no fees for the MM account for a total of 360,000 miles.

In my quote (� for many of us 120,000 miles for no fee, or 240,000 miles for $144, even with the lost opportunity cost, is VERY well worth it.) I was referring to a single account with an average balance of $200,000 thus 240,000 miles and $144 fees for a checking account or 120,000 and no fees for a MM account.

(I�ll not muddy the waters and state the fact that people with 2 checking accounts prior to BD changes last spring were �grandfathered� and allowed to keep the 2 checking accounts.)

That is the reality for the majority of folks who did not have the foresight to open 2 checking accounts before last year's change. An additional $144 for an additional 120K AA miles is a no-brainer - because in order to earn the 120K AA miles no fee using the MMA, you would need to deposit the $200K anyway. I could not imagine anyone who feels the BD account is worth it, would opt for the MMA just to save the $144 fee but get only 50% of the miles earned.

Like I said, it is not just the CX F redemption that warrants such, but also other types of awards including off peak one-way International award between Europe/South America and North America. It is a matter of knowing how to maximize one's award redemption based on one's travel pattern. AA miles worth far more than that mechanical calculation of 1.56 cpm - the value varies between as high as almost 10 cpm to as low as 4cpm but never has value below that. Furthermore, it is actually for some trips we would need to buy tickets had we not had the miles to redeem. Of course if one's idea of redemption is a domestic r/t in coach, or even to Hawaii - then it would be hard to get above 2 cpm.

To illustrate, I just ticketed a one-way MIA-LAX-NRT-HKG in J for 55K AA miles. Husband wants to spend Chinese New Year in HKG as well as has needs to be there in around that time frame. The cheapest ticket to fly J to HKG is on AC via YYZ and a fuel stop at YVR, for approx $4,100. If one wants to use JL via NRT or CX direct flight, the cost jumps to $6600 and up. At a minimum, the 55K AA miles saves us $4,100 which we would be reluctant to pay but would be willing to pay if needed to. The yield in this case is 7.45 cpm. A very well worth spending on miles for our travel need.

Actually it was because of the miserable experience in trying to find a J award using UA/CO miles for the above trip that skewed me to up our BD account balance to the full amount so we can get the maximum AA miles. In fact if husband is willing to connect at either YYZ or JFK, he could get the CX direct flight on his dates but he does not want to chance the January weather in Northeast so we opted for the TPAC from West Coast.

UA wants 150K for its TPAC to HKG as a starter. Other options would all be via either Japan or Korea but in order to get to the West Coast gateways, he has to connect somewhere domestically if using UA/CO award. The AA award allows him to have direct Transcon flight, with 5K LESS miles, plus free changes versus the change fees charged by UA/CO. CO has 0 availability from its EWR hub to HKG by the way.

I always find those mechanical of cpm calculation is too academic and too narrow-minded - sometimes it hurts by biasing a person's idea on how the miles can do for him. But of course this is a highly YMMV topic.

If you are willing to pay $4100 if you didn't have the 55k miles you are of course getting 7.45cpm. I would personally not be willing to pay such a huge premium. I put in some random dates and came up with round-trip MIA-HKG coach fares for $1100 in Jan which would otherwise cost 70k AA miles. If one neglects to count the 18,000 EQMs one would lose by getting an award ticket one is getting ~1.57cpm. If you include the EQMs, you are only getting 1.25cpm.

The point is that everyone would have their own valuation of AA miles given their travel patterns and the premiums they are willing to pay for premium cabin seats. One should use that number and see if BD is really giving them a good value.

I don't think finding a string of accessible banks that pay 3% on open checking is that easy, since many require you to come into the bank and a lot of them have limits less than $25,000.

But let's assume all that away and just see what this gets you. 3% on 200k is $6,000 taxable, which nets me about $3,900 after tax. You value miles at 1.5 cents each which means the 240,000 miles BD would pay you are worth $3,600.

My time is worth a lot and I'm not going to run around finding, opening and dealing with what is likely to be 10 or more different banks for a year to make $300. Or $600 either.

While I agree completely that cash is better than miles, the values here are skewed heavily in favor of BD in today's climate. If you value your time otherwise, then you should proceed in pursuing all those banks.

The poster already has done so. But obviously this is not something you and I would care to spend our time for. It is still a chore no matter how technology has helped. All this work for a tiny extra. The incremental gain is simply too poor.

EQM has no meaning to us - after all when most your long haul flights are in premium cabins you get the perks by way of class of service. As AA LT GLD, we have enough program perks that help us to have a more comfortable coach flight even on the Transcon. It is very nice AA has LT program and we do appreciate the fact that we dont have to fly a single pay ticket and can still enjoy the benefits which even for lowly GLD, are still quite generous and adequate for our domestic travel needs.

No way he would fly coach for that 15 hours TPAC flight. That is why miles worth a whole not more for our travel pattern. That is why pegging a FIXED valuation on mile is meaningless as how much the mile worth, all depends on how you use it - one of the many ways actually involves saving loads of out of pocket cash. It isn't too strange a concept, isn't it?

I am confused about what we are even arguing about. I don't find AA miles that valuable and so I don't think BD is useful for me. You value them enough to continue using BD. I never said BD is useless for everyone and I am not trying to convince anyone that RCA's are the superior product. I know that is subjective and never said otherwise.