high yield savings or MM and miles?
 

I just learned that Capital One now has a MM product earning 4.66% and 1 mile for every $20 of average balance for the month in your Rewards Money Market account. http://www.capitalone.com/directbank...L_R1_01_T_SP25

It does not seem that Cap One has a stellar record as far as FT'ers are concerned. But, are there other banks that are doing this with the more standard mileage programs most of us FT'ers are familiar with?

I have a chunk of change in Countrywide earning 5.5% right now.

Thoughts?

With respect to the valuation of the offer, it looks quite favourable. Customer Service may tilt it against.

Let's take our $10,000 balance, and compare. You can choose $550 (fully taxable) or $466 + 6000 miles (miles not taxable?). Opportunity cost for the miles is therefore the $84*(1-your marginal tax rate) for 6000 miles. That means you're paying at most 1.4 cents per mile, and more likely 1.1 cents per mile.

Of course, I would request that you not ask taxpayers to subsidize your miles. :p

its capone's miles isnt it? those are worthless..

Yeah, most don't like the Cap One miles product.

Are there other (high yield) accounts that let you earn miles on "normal" FF programs?

Good luck with this after the recent Fed rate cut...

If you want real miles, instead of Capital One "miles," you can get 9500+ just in bonuses fairly easily.

1k AA miles for being referred, 5k for direct deposit, 2k for bill pay for a year, 1k for opening the account. You can put $500 initial funding on visa/mc as a purchase. Also earn 100 miles per month per $1000 balance. -- I still have referrals available.