Bank Direct - Best Tax AIrline Mileage Deal?

Discussion in 'General Discussion | Miles/Points' started by euromannn, Apr 16, 2011.  |  Print Topic

  1. euromannn
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    euromannn Gold Member

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    I was considering the best airline mileage deals and it appears BankDirect offers the best option if you have a large amount of cash(ex: $200,000):
    1. Average balance pays 0.05 interest($100) annually based on $200k balance
    2. Transfers 20,000 AA miles monthly to AA account; annual total: 240,000
    3. Does not generate 1099-Misc for miles....so tax free

    Thus 240,000 points would be enough for 2 international AA business class tickets tax free($3000+ value).

    This deal seems better than Credit Card promos and brokerage deals.

    Curious what others think as I agree you need MONEY to play BankDirect but it's tax free and rewards are better than a normal bank interest like ING Direct 1% interest which would be $2000/annually but taxed.

    Sorry for post thread as bank Direct only taxes interest not miles.
     
  2. Gary Steiger
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    Gary Steiger Silver Member

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    I agree. Also, the bonus miles for the first year are well worthwhile, even if you deposit only the minimum $2,500 (to avoid fees). I compute the opportunity cost per mile at a bit over half a cent, a very good price indeed.

    You can read my computation and read about all the first year bonuses on my website below in the Finance > Banks section.
     
    slotownmomma likes this.
  3. Bluto
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    Bluto Silver Member

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    good thread going on over here about Bankdirect
     

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