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ETrade Complete Savings Accounts to Become Discover Bank Online Savings Accounts

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ETrade Bank just sent an email to its Complete Savings Account customers informing them that their accounts will be transferred to Discover Bank, and become a Discover Online Savings Account. Here's an excerpt from the email

We are writing to let you know that your E*TRADE Bank account referenced above will soon be transferred to Discover Bank, and become a Discover Online Savings Account. This follows our plan to focus more exclusively on providing optimal investing solutions to our customers. We expect the transfer to occur on or about March 7, 2010.

As I mentioned yesterday about ETrades's Super Bowl commercials, ETrade is trying to shrink its banking business. I guess slashing rates wasn't enough.

For those who may be concerned about Discover Bank and its online savings account, you'll be happy to know that Discover Bank will be soon releasing a major upgrade to their online banking system. It's scheduled to go live February 14th. I was recently given an overview of their new system. Also, I've been able to give their system a try with my own Discover account. It's definitely a major improvement, and it puts them on par with Ally and ING Direct. I'll have a review of Discover Bank's new online system in the next couple of days.

Discover Bank has long had an online money market account. However, the online savings account was only added last summer. The rate had remained very competitive until last week when the rate dropped for new customers from 1.60% to 1.35% APY.

Thanks to the readers who commented on this news and sent me emails.


  Tags: E*TRADE Bank, Discover Bank, savings account

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Comments
22 Comments.
Comment #1 by Anonymous posted on
Anonymous
I find it interesting that you can still open a savings account with eTrade right now.  It looks like what they are really trying to do is get rid of everyone that doesn't have a brokerage account and trade through them.

2
Comment #2 by MK (anonymous) posted on
MK
Best thing about the E-trade account is the Unlimited ATM Fee Refunds.  Thats the only reason I've kept it.  Never understood how they could afford to do that.

2
Comment #3 by flagator posted on
flagator
They are going keep the Max-Rate checking. I hope Discover improves the OnLine Savings because it sucks right now.

2
Comment #4 by Anonymous posted on
Anonymous
I haven't received this e-mail.  When did it go out?

2
Comment #5 by Anonymous posted on
Anonymous
The best thing I like about etrade account is the super fast ACH transfer.  Unless Discover can match it I'll probably abandon the account...

3
Comment #6 by Anonymous posted on
Anonymous
I had a dispute with Discover years ago that took me a while to get it dealt with. I closed my etrade account as soon as I got the email. Those SOB's at Discover will never ever get another peeny of my money. Thanks a lot  Etrade!!

2
Comment #7 by Matt (anonymous) posted on
Matt
I got a letter from Disccover bank stating my rate has not changed and will stay at 1.6% becuase I opened the account in October 2009.

1
Comment #8 by Anonymous posted on
Anonymous
Is there a limit on ACH Transfers?  The review of Discover Bank said the limit is 100k in/out, but one of the comments said that their MoneyHQ program imposes a  limit of 35k/month.  Which one is correct?

2
Comment #10 by Anonymous posted on
Anonymous
No email yet

 

But for those who love eTrade ACH, you may want to open a broker account with them. and use it as relay for free pull and push ACH. Plus you can get ATM card and refunds linked to the broker account. I only suggest this since i hear they are removing account activity fees next quarter.

1
Comment #11 by Anonymous posted on
Anonymous
Today

1
Comment #12 by older/wiser (anonymous) posted on
older/wiser
just spoke to Etrade rep. I have a brokerage account, savings and checking.

The date for savings transfer to Discover Bank is March 7, 2010.

I got the distinct impression from what the rep said, that the checking may be

next. We will see.

1
Comment #13 by Donald (anonymous) posted on
Donald
How do you avoid the junk mail barrage from Discover once they have you as a customer?

2
Comment #14 by jerome (anonymous) posted on
jerome
it's a bad deal

-4
Comment #15 by John C (anonymous) posted on
John C
Interesting... I have both the Max-Rate Checking, Complete Savings and brokerage account with E*Trade, and am a reasonably happy customer of theirs... As said above, the unlimited ATM refunds is a great feature, as are the speedy ACH transfers and high number of external bank accounts that can be linked.

As of this post, I've yet to receive any email notice from E*Trade or notice of any secure message in my E*Trade account inbox, re the Discover Bank change.

But assuming it will show up soon, I never really used the Complete Savings account much after rates plummeted. So as long as they keep the Max-Rate checking and its handy ACH and ATM features, I could pretty much care less whether or not they ditch the Complete Savings account.

Discover Bank would have to offer something pretty compelling to generate any interest from me... and 1% ain't going to do it. E*Trade's own online banking set-up is pretty darned good, efficient and effective. I can't imagine what Discover could do that would make it a better alternative.

 

5
Comment #16 by Anonymous posted on
Anonymous
It sounds like they're only getting rid of folks without other accounts with them, i.e., those who are least profitable.  At least some of these folks are rate-chasers or opened the account only for the bonus, and aren't going to be putting anything on ETrade's bottom line.

5
Comment #17 by Anonymous posted on
Anonymous
The headline is a little misleading.  Etrade savings is still continuing.  Only those Etrade savings accounts that are not linked to Etrade brokerage are being transfered to Discover.  Otherwise, they would lose a lot of brokerage accounts.  The only point of having the Etrade savings is because of the very convenient link to their brokerage (it's an instant transfer) so you can bank and trade stocks at one place.  So I'm not sure why someone would open an Etrade savings account without a brokerage account in the first place.  

3
Comment #18 by ET (anonymous) posted on
ET
I have several etrade brockerage accounts and the complete line of bank accounts

(Checking, Savings, and Money Market).  I've not received any notice that any of

my etrade accounts are shifting to Discover.  I really like Etrade's overall mix of

services and use it as my primary financial hub.

 

Since Discover has been offering much better rates I opened a Discover Savings

account several months ago and moved most of the money I had been keeping

in etrade's banking accounts over to Discover.

 

Discover's current banking site *sucks* ... for example;

 

- disposits credit days late and reflect in the account balance screens at three

  different times, so depending on which page you view there could be

  three different balances of funds available "now".

 

- the replies from customer service are post-dated to appear to have been

  sent the same day the question was asked.  Each time I've asked customer

  service questions and checked back for a reply each day for a week.  When

  the reply finally appears the "reply sent date" shows as the same day I

  asked my question.

 

On the plus side, their phone based customer service has been helpful,

their rates are good given the horrible interest rate environment.

2
Comment #19 by Brett (anonymous) posted on
Brett
Just to let you know, it's actually only people who have no brokerage account with eTrade who will be moved to Discover.  If you have a brokerage account as well as a complete savings account with eTrade you will be unaffected by the switch and your money will remain at eTrade.  The people who only have a bank account or checking account with eTrade will be moved.

1
Comment #20 by John C (anonymous) posted on
John C
This is the John C. from post #15 above. It's now Feb. 15 and still no communication from E*Trade about any change...

So, I've got to presume their announced switch to Discover Bank for SOME of their savings accounts is indeed selective. As mentioned above, I've got both a brokerage account and Max-Rate checking with them...in addition to the savings.

So I don't know whether it's having the brokerage account, or multiple accounts, or some level of account balances that keeps one out of the Discover move... I'm guessing it's having a brokerage account at least, since no one has posted here saying they have a brokerage account with E*Trade and also was informed their Complete Savings account was being moved.

I too use E*Trade as my financial hub.... I don't keep my interest earning bank deposits with them because their deposit rates are so low. But I do manage my IRA investments thru them (very nicely thru their very good online banking/market trading setup), and as noted above, it's very easy and fast to move money between different E*Trade accounts or to do ACHs in or out to other banks.

 

 

2
Comment #21 by Charles Bloodworth Jr (anonymous) posted on
Charles Bloodworth Jr
Where is my $100. 

I had $100 in a Complete savings account.  I log onto ETRADE and its gone.

My ETrade password does NOT WORK on DiscoverBank.com   and How are they going to know who I am to give me my MONEY BACK.??

Please reply with help.

0
Comment #22 by Anonymous posted on
Anonymous
So what comes next they move my money I have in CD to a commodities future traders without my knowledge and without my consent to gamble in the market?
I am done with this bank and closing all my accounts, same with Discover, who assisted Etrade in this scam. In case they broke the law then I will let you know, we can file a class action lawsuit is unheard of and outrageous. I called Discover Bank in the meantime and they told me they would call back, now 3 days later I still haven't gotten a call and I have no idea on how to get my assets back. I requested my funds back and they told me I have to take care about this on myself to get my assets back. I am close to hiring a lawyer to file a lawsuit after figuring out if they broke the law. I never got any information about this neither from Etrade nor from Discover. I never consented to a transfer of my assets. If I wouldn’t have missed 9,000 dollars I would have probably never recognized that funds are missing if the sum would have been much smaller. So how many customers who have multiple accounts and CD’s don’t even know that their money is missing. If you have an old address on file you might never get a notification and your assets are lost forever. There is no note, no nothing on their website or in your account overview that assets have been move. As far as I know a bank cannot move customer funds without consent. They gave up custody of funds as they cannot access those funds anymore. I would call that breach of fiduciary duty.

2
Comment #23 by Anonymous posted on
Anonymous
Discover Bank forwarded a new account welcome kit containing documents indicating our name, address, SS#, DOB, email, beneficiary information and current account information in an UNSEALED ENVELOPE WITH DOCUMENTATION MISSING.

The INEPT (non) customer service personnel had no idea what action to take; the security/fraud department will only handle the situation AFTER you are a victim.

No one above the level of moron would talk to us. No SUPERVISORS will take customer calls; no MANAGERS will take customer calls.

This is an FDIC insured Bank.  Notification was made regarding Discover Bank's violation of their charter. 

Contact was also made to the FBI inasmuch as bank accounts (for possible terrorist activity and/or money laundering) may now be opened WITHOUT our knowledge due to Discover Bank's DISREGARD for the protection of their customer's private information.

Discover Bank REFUSED to absorb the cost of identity protection (even through Discover Card) thus causing TREMENDOUS financial strain due to DISCOVER BANK'S ERROR.

1