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Update on ETrade Bank and the Transfer of Customers' Savings Accounts

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Not all of ETrade Bank's Complete Savings Account customers are being moved to Discover Bank. As I mentioned on February 9th, I and many others received an email from ETrade Bank informing us that our Complete Savings Accounts will be transferred to Discover Bank's Online Savings Accounts on March 7, 2010. I only have the Complete Savings Account, but many readers who also have ETrade's brokerage accounts have reported not being notified of this move. This Chicago Tribune article confirms that ETrade is "selling only accounts that have no ongoing brokerage relationship with the company." I just called ETrade Bank, and the CSR confirmed this. Only some Complete Savings Accounts are being transferred, and all Max-Rate Checking Accounts will remain at ETrade Bank.

As we've seen with ETrade Bank's very low deposit rates, ETrade Bank has been implementing a strategy to reduce its deposits. I just hope customers who have CDs at ETrade Bank don't let them automatically renew. A customer who lets his 1-year CD automatically renew may end up with a 1-year CD paying 0.10% (that's one-tenth of one percent).

I was just going to let my ETrade Complete Savings Account be transferred on March 7th. However, after seeing Jim's post at Bargaineering about how to close an ETrade account, I think I'll just close it before then. I plan to transfer out the remaining balance at ETrade Bank, and then send a secure message instructing them to close the Complete Savings Account.

For me there's no sense in having ETrade Bank transfer the little bit of money that I have in the account to Discover Bank. I don't need a new account there. I just recently opened the Discover Bank online savings account so that I could review Discover's new online banking center. Those who plan to let their accounts be transferred should be relatively happy about Discover Bank. From what I could see, Discover's new account center has all the functionality of ETrade's. The only downside appears to be slower ACH transfers.

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

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Comments
7 comments.
Comment #1 by Anonymous posted on
Anonymous
I received mailed notices (but no e-mail) for two accounts which I had opened solely for the bonuses that they had been handing out.  I had been using Etrade as something of a hub for transfers, and having three savings accounts gave me many more withdrawls with which to work.

I'm not sure why they're only moving those two, as I have no brokerage account.  I closed both of them this week, as I have no want for a Discover Bank account.

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Comment #2 by Anonymous posted on
Anonymous
I have both a savings account and a money market account.

I received email that the savings account is moving.  I received no snail mail and nothing about the money market account.

The money market account was convenient for check writing and there was no fee as long as I kept $5000 in all of my accounts combined.  But I realized that with the savings account moving, I would no longer have $5000 at E*Trade, so I am closing the money market account today.

Let that be a warning to anyone who is depending on combined balances to avoid a fee!

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Comment #3 by Anonymous posted on
Anonymous
I received no e-mail, snail mail, or account update on my account alerting me to the change.  Today they moved my money to Discover bank, and I guess I will have to wait for that account to open up before I can close both of those accounts and pick a new bank.

 

It's just as well, I suppose.  The interest rate had been in the tank for the last several months, and I was planning on moving the money when I got around to it.  Nonetheless, I am pretty perturbed by the situation and will not transact business with E*Trade in the future.

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Comment #4 by Terry Riegel (anonymous) posted on
Terry Riegel
I just discovered that all my stuff was transferred over and now apparently my account information can't be altered even though I didn't put it there.

SO APPARENTLY I WILL HAVE TO BE GREETED WITH Welcome TERRY RIEGEL, EVERY TIME I LOG IN. IT IS SO PERSONAL TO SEE THAT IN ALL CAPS.

I agree with the previous poster. "I am pretty perturbed by the situation "

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Comment #5 by Terry Riegel (anonymous) posted on
Terry Riegel
My stuff was just transferred from eTrade to Discover. So I decided to make sure everything looked normal, I logged onto eTrade to find that I was no longer allowed to view my account history.

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Comment #6 by Steven A (anonymous) posted on
Steven A
No QUICKEN support for Discover Bank. How retarded for an online banking institution. Discover get on your game, I haven't even recieved my Welcome Kit yet. I had to call 24/7 Banker to get me started.

1
Comment #7 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.

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