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Basque Bank and American Airlines have a partnership that allows AAdvantage members to earn interest in the form of miles, meaning members will earn travel rewards instead of interest on their money. This can be beneficial if you value AAdvantage miles highly – especially given the relatively low rate of return on many savings accounts.

Unfortunately, after increasing his AAdvantage mile earning rate on it Mileage savings account As has been the case in recent years, the Basques are now reducing it. Starting November 1, the rate is dropping from 2.5 miles to 2 miles for every dollar saved each year. Depending on how much you keep in a Basque bank account, this could mean losing thousands of AAdvantage miles each year.

Let’s take a closer look at Basque Bank’s new Mileage Savings Account rates and how you can use this account to earn miles on your cash savings.

Related: Best Uses of American Airlines AAdvantage Miles

Basque Bank’s new AA Advantage Earning Rate

As of November 1, Basque Bank has reduced the earning rate on its Mileage Savings Account from 2.5 miles to 2 miles per dollar saved per year. This new earning rate applies to new and existing Basque Bank accounts. “The adjustment is based on economic factors and current market conditions,” according to the bank’s statement.

Mileage savings account members won’t be thrilled with this news, but still, 2 miles per dollar is nothing to sneeze at. From October 2024 of TPG At 1.6 cents per valuation peg AA Advantage mile, that’s a return of 3.2% (though in practice, this could be much higher or lower depending on how you redeem your AA miles). This rate is higher than what you’ll find with many savings accounts, such as Chase’s Standard Savings Account, which yields just 0.01% annual percentage rate on deposited funds. However, at the time of writing, some High yield savings accounts Offer 4.00% APY or more.

Ultimately, the value you get from a Basque Mileage Savings Account — and whether it’s the right choice for you — will depend on how you redeem your miles. Do the math and see if it makes more sense to earn cash or miles on your savings. Sometimes, it may be worth splitting your savings between a Basque Mileage Savings Account and a traditional savings account to diversify your earnings.

Related: How to Earn Miles in the American Airlines AAdvantage Program

What is Basque Bank Mileage Savings Account?

of the Basque Bank Mileage savings account A savings account that earns AAdvantage miles instead of interest on deposited funds. Texas Capital Bank owns and operates the bank, so the Federal Deposit Insurance Corporation insures all funds. There are no monthly account fees to keep your Mileage Savings account open, no matter how much you deposit.

Miles earned with a Mileage Savings Account are earned daily and then credited to your AAdvantage account monthly. Your monthly payment is based on your average monthly account balance. These miles are the interest you earn on your savings, so no cash interest is earned on deposited funds.

For example, if you keep $50,000 in your Mileage Savings account for one year, you’ll earn 100,000 AAdvantage miles based on a new earning rate of 2 miles per $1 saved. This works out to around 8,333 AA Advantage miles per month — although the daily accrual process means you’ll earn slightly more for months with 31 days and slightly less in other months.

To put this into perspective, 100,000 AAdvantage miles is potentially enough to book a business-class seat to Europe or even a first-class flight from Los Angeles to Japan.

It’s also worth noting that Basque Bank sometimes offers bonuses for new members. Right now, you can earn 10,000 AA Advantage bonus miles if you open a Basque Mileage Savings Account by November 30, fund your account within 15 business days and maintain a minimum daily account balance of $50,000 for 180 consecutive days out of the first 210 days.

If you have cash in a savings account and want to earn miles instead, Basque Bank can be a good option. Just note that you don’t earn loyalty points with Basque Bank unless there is a special offer. So, if you’re chasing AAdvantage elite status this year, check out TPG’s complete guide to earning loyalty points for other options.

Finally, it’s worth noting that these miles are considered income for tax purposes. Per Basque Bank FAQ page:

“AA Advantage miles awarded by Basque Bank to maintain a deposit balance are treated as interest income. This income is reportable to the IRS and to you for the year in which the miles were posted to your AAdvantage account.”

As a result, you will receive a 1099 for these earnings.

Related: Why I Qualified for American’s Top-Level Status Without Planning to Fly the Airline

The bottom line

Basque Bank has reduced its mileage savings account from 2.5 miles per dollar saved annually to 2 miles. Depending on how much you value AAdvantage miles, this can still be a great way to earn miles on your savings. Just be sure to crunch the numbers (and check with a financial advisor) to see if earning miles instead of interest on your savings makes sense. As with anything in the points and miles world, AAdvantage miles can be depreciated without notice, effectively depreciating the mileage interest you earn on your savings.

If you’re considering opening a Basque Mileage Savings Account, you can earn a new customer bonus of 10,000 AA Advantage miles when you do so by November 30 and meet the offer criteria.