I like airline miles and fancy hotels just like everyone who has gotten themselves in this predicament. There are practical ways to redeem these perks (converting to cold hard cash), and highly luxurious ways of capitalizing on them (like flying in first class with your personal butler) that don’t actually save you money but simply allow you to travel and vacation in style.
In any case, those of us who are looking for low-fee ways to invest can choose low-fee funds from Fidelity while earning airline miles. If you are able to put $100,000 in a taxable investing account in Fidelity for at least 9 months, they will award you with 50,000 airline miles! They have offers for American, Delta, and United miles.
This can translate into at least one free domestic airline ticket (maybe $400) or something fancier if you are into that game (this may be a topic for future posts).
Fidelity lowered its index fund fees earlier this year to compete with Vanguard’s fees. The differences in savings are negligible over the long term, but worth noting:
For instance, Fidelity’s S&P 500 index fund has an expense ratio of 0.045%, compared to Vanguard’s at 0.05%.
You can still receive a certain number of miles if you put in a smaller amount. I typically keep my taxable investments inside a Vanguard account, but given the recent change of lower fees with similar funds and airline mile perks, I plan to roll in some uninvested funds over the next year into my Fidelity account.
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Note: I do not have any financial interest in Fidelity or any of the airline affiliates. All of the links in this post are public links.