In an era of low interest rates, it is hard to find a place to park your money and get anything in return. However, for those looking for an alternative to buying an airline ticket to Ecuador, there may be a solution. Bank Direct (www.bankdirect.com) offers a mileage checking account that allows clients to earn American Airlines frequent flyer miles in addition to a small amount of interest. You earn 1,200 miles annually for every $1,000 that is held in the account up to a maximum of $50,000. Round trip flights from the U.S. to Quito, Ecuador, can be found for 30,000 frequent flyer miles. So, if you have $25,000 sitting around earning little or no interest, you can earn a round trip ticket in one year. There is one catch. Bank Direct charges a $12.00 monthly fee, so it is a much better deal if you keep a larger balance in the account. The advantage is that frequent flyer mile bonuses are not taxable, unlike interest earned in a regular checking or savings account..
Here's an example. If a round trip ticket to Quito from your home airport costs $800 and your $25,000 earns that ticket in a year, that means that you can earn a 2.6% return paid in frequent flyer miles even after accounting for the $144 per year fee: ($800 - $144 = $656, $656/$25,000 = 2.6%). If you like to travel, this is a much better deal than letting your money languish in a checking or savings account earning a tenth of a percent.
There are some other ways to earn additional miles by signing up for direct deposit, online bill pay, or opening a credit card. You can also earn 1,000 miles by signing up through a referral email. If you would like a referral link, just click on the "Feedback" link on the far right side of this page and enter your email address and "Bank Direct Referral" in the subject line. I'll then send the link to you. You can also request a referral email on the Flyer Talk forums. This deal is not for everyone, but may be an option if you have some spare cash and are waiting for higher interest rates or lower stock market prices.
In the next newsletter, we'll update you on the most efficient and cost effective way to get from the new Quito airport to Cotacachi.