BankDirect vs Bask

[SlowMovingInvestor]

Those who have BankDirect ('BD') AA mileage accounts with Texas Capital know that Texas Capital has stopped opening new BankDirect accounts, and instead has a new brand called Bask. The difference is that Bask will get you less miles, but no fees (BankDirect has fees of $12/month = $144/year). In addition, BankDirect mileage earning rates fall off dramatically after $50K deposit, but Bask's remain constant, so you could go to the limit of FDIC coverage if you wanted. But in BD's case, the fees mean that 50K is the 'sweet' spot.

I find AA mileage to be valuable and useful for international biz class reimbursements, so I am going to keep at least one Texas Capital mileage earning account open. I'm wondering whether it make sense to keep the BankDirect account active in the future or just to move the money ($50K) to Bask. [If I were to close the BankDirect account, there would be no way to open a BD account again]

BD costs around $144 for 10K extra miles for $50K deposit. If I put an extra $10K in Bask, I get those 10K miles, and I lose around $200 in interest. At my tax bracket, I lose around $140 post tax. So my conclusion is that it's largely a wash, so I am probably better of going to Bask since it's more flexible (I don't have to put 50K in Bask to get maximum benefit since there is no monthly fee).

[In addition, Texas Capital is going to 1099 the mileage, possibly at .42 c/mile, but it would be the same in either case so that's not a distinguishing factor. ]

Am I right in how I'm comparing BD and Bask ?

[tj]

When you say .42 c per mile are you saying 4/10th of a penny or 42 cents? If the latter, yikes.


Didn't AA miles get highly devalued recently?

[SlowMovingInvestor]

When you say .42 c per mile are you saying 4/10th of a penny or 42 cents? If the latter, yikes.

Didn't AA miles get highly devalued recently?

.42c/mile, not 42 cents. Guessing that's the rate at which they buy from AA.

AA has instituted dynamic pricing on it's own metal, but their partners (and they have some great ones for international biz class such as Etihad and Qatar) are still available at very good rates. It's not like Delta, which is pretty much useless now for international biz class.

But that would be an argument for going with Bask since it's easier to tamp down or tamp up Bask account balances depending on your perception of the worth of AA miles, without concern about fees or the $50K sweet spot …

[HEDGEFUNDIE]

1 mile per dollar deposited per year.

If you believe TPG’s valuations that’s a 1.4% interest rate. Not as good as a regular high yield savings account.

[tj]

That's intriguing - I guess if you are going to hold that much in a savings account anyway, might as well go with Bask and avoid the fees.

I would assume that you would generate far more miles by signing up for the Barclays and Citi credit cards every few years.

[SlowMovingInvestor]

That's intriguing - I guess if you are going to hold that much in a savings account anyway, might as well go with Bask and avoid the fees.

I would assume that you would generate far more miles by signing up for the Barclays and Citi credit cards every few years.

Barclays has made it awfully hard to sign up for their cards if you have recent signups for other cards (even non Barclays) and Citi requires 24 (or maybe 48 months) from the time you were last a card holder. So churning possibilities are very limited and the only real viable transfer partner is Marriott/Starwood, but earning on that card was devalued as part of the Marriott/Starwood merger.

[SlowMovingInvestor]

1 mile per dollar deposited per year.

If you believe TPG’s valuations that’s a 1.4% interest rate. Not as good as a regular high yield savings account.

You can get better reimbursements for international biz class, and it's being 1099ed for less.

[the way]

Interest rates have dropped so much that Bask Bank is viable again. Eg. $100k there gets you 100k AA miles per year.

BankDirect is closing their Mileage accounts and asking you to go to Bask or just to their regular interest accounts by the end of Aug.

[cantabtim]

The uncertainty around the future of any airline and the ability for them to alter the terms of or even cancel their frequent flyer program, not to mention my own reduced appetite for air travel makes me question the validity of comparing air miles to any amount of cash interest right now. AAdvantage miles in the "bank" at AA are certainly not like USD in an FDIC insured acccount.

[SlowMovingInvestor]

The uncertainty around the future of any airline and the ability for them to alter the terms of or even cancel their frequent flyer program, not to mention my own reduced appetite for air travel makes me question the validity of comparing air miles to any amount of cash interest right now. AAdvantage miles in the "bank" at AA are certainly not like USD in an FDIC insured acccount.

This is exactly my POV. I'm also concerned about AA bankruptcy.

I'm thinking of dropping my Bask holdings by at least 50% (after I get a bonus for 6 months, due soon). I do have a 2% deal until the end of the year on my savings account, which is a good deal.

[gobel]

Bask has a regular interest savings account now, paying 1.25% https://www.baskbank.com/products/inter ... gs-account

[itispossible]

Is Bask customer service good?
1.25% is a good rate. Ally is 0.5%. Might switch.

[BuddyJet]

Is Bask customer service good?
1.25% is a good rate. Ally is 0.5%. Might switch.

I’ve only had to call them a couple times with some simple stuff but my experience was good.

[itispossible]

Is Bask customer service good?
1.25% is a good rate. Ally is 0.5%. Might switch.

I’ve only had to call them a couple times with some simple stuff but my experience was good.

Thanks for the response. I opened an account with them.

[gobel]

Bask has a regular interest savings account now, paying 1.25% https://www.baskbank.com/products/inter ... gs-account

now 1.5%

[gobel]

Today it's at 1.61% APY. Probably when it gets above 2-2.5% the AA mileage account doesn't make sense anymore and plain interest is better.