EDIT: The terms of this deal have changed. Cycling funds through is no longer an option, though you still qualify for up to 50,000 miles with your choice of airlines if you can deposit $100,000+ of new funds into a new or existing Fidelity brokerage account and leave it there for six months. One bonus per account per 12 months.
Last month, a few bloggers had great posts about how to open and fund an investment account in order to earn airline miles. I didn’t jump on the chance to do so, since the deal was set to expire on December 31 and there was no way I could get my act together in the week between Christmas and New Years in order to do research on whether or not this was a good personal decision. Well, I’m ready now, so I was excited to see the original offers have been extended, giving me (and you!) a second chance to get onboard. If anyone else is in the same boat, let this be a friendly reminder that any idle cash you currently have can be working for you!
Essentially, you can open a new brokerage account with Fidelity in order to earn airline miles with your favorite programs. The amount of miles you earn is based on the size of your deposit(s). In order to maximize the amount of bonus miles, you can
- Open a new account with Fidelity (your choice of United or American Airlines miles) and complete the requirements for the bonus offer
- As an existing customer, add new funds through the Delta offer to earn even more miles
- Open separate individual accounts instead of a joint account if you are married to earn twice the amount of miles
Earning returns on your investments in this market environment is not easy and may not come quick, but earning bonus miles is a simple and guaranteed way to earn value from your investments. Of course, you can still choose your investments wisely to earn monetary gains as well
Before proceeding, I’d like to highly recommend you put in your due diligence to look at what other investment options you have to make sure this is the best choice for you and your family.
Here’s a short summary of your options, in case you choose to proceed. These are only the “highlights” of the offer, and you’ll want to read the fine print before opening and funding accounts.
Only new customers are eligible to earn miles with American Airlines or United Airlines so you’ll want to choose one of those programs for your new brokerage account. After you’ve successfully fulfilled all parts of the promotion to earn your AA/UA miles, you are still eligible for the Delta offer as an existing customer as long as you add new funds to your existing account.
Regardless of airline program, you’ll earn:
15,000 miles with $25,000 in funding
25,000 miles with $50,000 in funding
50,000 miles with $100,000 in funding
A Few Stand-Outs from the Fine Print:
- Only brokerage accounts are eligible (not IRAs, etc.). You’ll choose from a standard brokerage account or a cash management/brokerage account
- Accounts must be funded within 90 days of opening
- Funding must come from an external, non-Fidelity source (such as an electronic funds transfer from your checking account or a securities transfer from a different brokerage firm)
- Your account must remain open with funding for six months from the date that the qualifying assets are first received
- Bonus miles will be received in 8 weeks after funding
- You are only eligible once per lifetime (the reason you can get both AA/UA and Delta is because one offer is for new customers and the other is for existing customers)
Things to Keep in Mind:
- Your Fidelity account will be the same as any other Fidelity account – meaning you’ll still be able to trade any type of investment you normally would, including stocks, bonds, mutual funds, ETFs, CDs, annuities, and more.
- There are no fees to open an account, but standard fees for trades will apply. Check them out ahead of time.
- There is a $2500 minimum to open the account. Officially there is no minimum going forward, though certain types of investments might require minimums.
- There may be fees from your existing accounts with other financial institutions in order to deposit funding to your new Fidelity account.
I know what you’re thinking…”Okay, Becky, where on earth am I going to get $100,000 from?!“ And it’s a valid point! Last I checked, $100,000 is a ton of money! However, many people have reported that you can
- Fund your account with a smaller amount of money
- Withdraw the funds back into your checking account
- Re-fund your account with the same money
So if you fund $50,000 on Day 1 and then re-cycle that money through on Day 15, your account will still show a total of $100,000 in overall new funding and you’ll still qualify for the full bonus. If you’re like me and don’t have $50,000 lying around either, never fear – you have a total of 90 days to cycle your money through up to a total of $100K. Since it takes about 7-10 days for each 3-step cycle and you have a maximum of 90 days available, you’ll need to cycle a minimum of about $10,000 each time. If you have more funds available, you can do it in larger chunks to ensure you don’t accidentally miss the deadline (and to get your bonus miles a little sooner).
Among other opportunity costs, remember you won’t be earning any interest on the funds you are funneling in and out of this account during your cycling timeframe. If you choose to cycle $8000 at a time over 90 days which would normally earn you 1% in a savings account, this equates to about $20 in interest that you are forfeiting. (Not a big deal compared to the 50,000 miles you are earning) However, if you are funneling in something other than extra cash, the opportunity costs could be much, much higher.
The Points Guy has a great summary of an alternate offer through TD Ameritrade, but if you qualify for the Fidelity promotion, here’s why I think it’s a better offer. For one thing, you get twice the amount of miles (50,000 per account rather than 25,000 through TD Ameritrade). You also get the miles faster (8 weeks vs. 6 months) and you don’t need to have the account open as long (6 months vs 9 months).
More importantly, the Fidelity offer allows cycling in of deposits, meaning you only need about $8,000 in available funds – TD Ameritrade requires the full amount of funding at one time, so you’d need $25,000 on hand. That being said, your investments should take more into account than just a mileage bonus, so for some people, TD Ameritrade might be a better fit. You can always do one promotion now and another one in the future, taking advantage of bonuses from both firms.