Earn miles for investment account funding and for your checking account.
While BankDirect reduced mileage-earning for checking accounts that hold over $50,000, I’ve been a BankDirect checking account customer since July 2003, and I use it as a checking account.
It is not an investment account that pays a rate of return in miles rather than money (and which doesn’t report earnings to the IRS). Well, in a world of low interest rates it is that. But it isn’t primarily that.
BankDirect awards 100 American Airlines miles per every $1000 average balance every month. Depositing $50,000 at the bank generates 60,000 miles per year. If you value those miles at 1.5 cents apiece that’s a $900 return. If your rate of return on that cash would otherwise be somewhere less than 2.5% you’re probably coming out ahead (depending on your marginal tax rate of course).
With declining profits to banks for holding checking account cash, they instituted a $12 per month fee — that you can not get out of with minimum account balances or with payroll direct deposit. And so I no longer think the account makes sense for people that don’t carry ~ $5000+ average balances.
Miles for Checking Accounts
Other checking account products earn miles for signup, but I don’t know any others that reward you on an ongoing basis for the balances you keep in your account. Two banks that offer mileage signup bonuses for checking accounts are:
- UFB Direct offers 1000 American Airlies miles for direct deposit and they offer an American Airlines mileage-earning debit card that gives 1 mile per $2 in spending, not to exceed 120,000 miles per year.
- Citibank often offers American Airlines bonuses for new checking accounts – these offers usually include a requirement of spending on their debit card and also direct deposits. I wouldn’t take their 30,000 mile offers, though, given the possibility of 1099 forms reporting the miles awarded on their banking products to the IRS. If you’re paying taxes on those miles you’re not really coming out ahead, as the reported values tend to be rather inflated.
Miles for Investing
Years ago I opened a TD Ameritrade account and earned Starwood points for my initial deposit, though it appears TD Ameritrade no longer has any mileage offers that I can find.
The big mileage earning comes from Fidelity.
Fidelity offers up to 50,000 miles from your choice of American, United, or Delta with a deposit of $100,000. You used to be able to ‘cycle’ the same money in and out to get up to that $100,000 mile threshold, but it no longer seems to be possible.
(Hat tip that the Delta offer was extended to December 31, which prompted this post, to Free Frequent Flyer Miles)
With each of these offers, Fidelity will give you up to 50,000 miles based on the amount you deposit into your account within 90 days of opening.
- 15,000 miles for a $25,000 deposit
- 25,000 miles for a $50,000 deposit
- 50,000 miles for a $100,000 deposit
And while Fidelity doesn’t give you an ongoing bonus for your balance the way that BankDirect does, you can earn one bonus per 12 month period. So get the 50,000 American miles if you can park that much cash or move in that big an investment, wait 12 months, and get a bonus through another airline offer. And these three mileage-earning bonus offers have not, to date, been 1099’d.