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.