Where you bank can also have a huge influence on your frequent flyer miles balances. The main sources of miles accrual are initial account bonuses and monthly miles earnings for balances held.
New account bonuses are the mainstay of this sector of points earnings. Larger banks and brokerage houses offer an initial sign-up bonus based on the size of the initial deposit. Smaller initial balance requirements typically yield lower miles bonuses. The two principal players from the brokerage houses are TD Ameritrade and Fidelity.
TD Ameritrade and Fidelity offer sign-up bonuses of up to 50,000 frequent flyer miles, but require initial deposits of up to $100,000 to achieve that type of award. Before investing your hard earned cash with these institutions it is important to compare the rate of return earned with these companies to the rates offered by firms that do not deliver miles. If you have a value of the miles you’ll earn in mind, the comparison becomes quite simple.
Another important factor is the length of time you must leave your funds on deposit.
Banks, typically the national brands (Citi, US Bank, Chase, etc), will offer sign-up bonuses for opening either a new checking or savings account. It seems there is always a promotion available. Some of the promotions require you, as a new depositor, to set up a direct deposit into the account, pay a bill electronically from the account or use an associated debit card a minimum of times per month. The idea behind these requirements is to accustom you to using the account, hopefully keeping it open after you receive your sign-up bonus. At present, Citibank seems to offer the most promotions in this arena.
One bank I continue to use is Bank Direct located in Texas, the home of American Airlines. Bank Direct has a variation on the typical sign-up bonus. They will give you a small miles sign up bonus for opening an account, another bonus for setting up a direct deposit, another for using their bill pay system and one more for referring customers to the bank. Lastly, the best of the bonuses is earning miles for the dollars you have on deposit each month in your checking account. The interest paid by Bank Direct for the Mileage Earning checking account is .05% (virtually nothing) but you earn 100 American Airlines miles for every $1000 you have on deposit, each month. If you calculate the value of 1200 AA miles at 1.5 cents each, your earnings are $18 per year or 1.8%. When you take into account that the earning of miles is typically a non taxable event (check with your tax expert) the yield is pretty good for a checking account. There is a $12 monthly fee for this account so you’ll need a significant deposit to make the play payoff.