Advertising Disclosure


Popular Posts

Discover Bank Eliminates Fees on Deposit Products

POSTED ON BY

Earlier this week, Discover Bank announced that it has ended fees on all deposit products. This won’t be a big benefit for most savers with Discover Bank accounts since its deposit products already had few fees. This appears to be a way Discover Bank is trying to compete with Ally Bank and other online banks which promote fee friendly policies. I think for most savers, interest rates are more important than fees, unless there are unusual fees.

Below are excerpts of the Discover’s press release which announced this change:

Discover announced today the elimination of deposit account fees, promising to help customers keep more of what they earn and save. Customers with a checking, savings, money market or CD account from Discover Bank now can rest easy knowing their money will stay where they put it without fees for an occasional oversight or pressing need.

[...]

In addition to offering deposit accounts with no fees for monthly maintenance, checkbook orders or replacement debit cards, going forward, Discover is eliminating fees for insufficient funds, excessive withdrawals, falling below minimum balances and stop-payment requests. Discover banking customers also have access to 60,000 fee-free ATMs across the country.

Elimination of the Money Market Minimum Balance Fee

This change will be most beneficial for those who have Discover Bank’s Money Market Account. Before this change, the Money Market Account had a $10 fee when the balance fell below $2,500 after the third statement cycle. Now, there is no minimum balance fee. However, there still is a minimum deposit of $2,500 to open a Money Market Account.

Elimination of the Excessive Withdrawal Fee for the Savings and Money Market

Before this change, if you had more than six withdrawals (excluding ATM withdrawals) within a calendar month from your Savings or Money Market Account, Discover Bank would charge a $15 excessive withdrawal fee for each withdrawal over the six. That fee has been eliminated. However, that doesn’t mean you can now go beyond the six withdrawals per month. That limit is governed by federal regulation. Discover Bank’s Deposit Account Agreement describes what they may do if your withdrawals exceed the limit:

If during any calendar month you exceed these transaction limitations, we may refuse to pay each transaction in excess of the limitations. [...] If you exceed these transaction limitations on more than an occasional basis, we reserve the right to close your Money Market or Savings Account or change the Account to a Checking Account.

Elimination of NSF Fee and Stop Payment Order Fee

Before this change, all of Discover Bank’s liquid accounts (Savings, Money Market and Checking) had a $30 Nonsufficient Funds (NSF) fee, but Discover charged a maximum of one NSF fee per day. The NSF fee has been eliminated. Thus, if you happen to overdraw from your account, you won’t have to worry about this fee. The Deposit Account Agreement describes what happens where there are insufficient funds:

Generally, we will not pay or honor any withdrawal or transfer against your Account if there are insufficient available funds to satisfy the full amount. In this case the transactions will be returned unpaid.

Discover Bank does offer overdraft protection which provides free overdraft transfers to cover transactions that overdraw an account. It requires that you first enroll in overdraft protection. This will link an eligible account (like the checking account) to another eligible account (like the savings account). According to Discover’s FAQs, “Overdraft Protection is used to cover transactions like checks, online bill payments and ACH transfers initiated at another bank. It does not apply to ATM, debit card transactions or transfers initiated at Discover.”

Before this change, a stop payment order for Discover’s liquid accounts was “$15 per order to stop payment for 6 months.” Now the stop payment order is free.

Fees That Still Exist

Not all fees have been eliminated. Discover’s Account Guides list what has no fees and what has fees.

Discover Bank still has an outgoing wire transfer fee of $30. There continues to be no fee for incoming wire transfers.

CDs still have early withdrawal penalties (EWPs). The EWPs are harsh for the long-term CDs (18 months of interest for the 5-year CD and 24 months of interest for the 7- and 10-year CDs).

Discover Bank doesn’t charge a fee for using any out-of-network ATM. However, the ATM operator may assess a fee for ATMs outside of Discover’s no-fee network. Discover Bank does not offer any reimbursements for these fees. There are no foreign transaction fees for those who travel outside the U.S.

Related Pages: nationwide deals, Internet banks
Comments
willy12
willy12   |     |   Comment #1
I thought they already had first fee forgiveness or something like that, didn't they?

Anyway, not much of a deal for most of us here but maybe those still using local banks who might be leery of online banks.
RichReg
RichReg   |     |   Comment #2
I'll now feel extremely confident about investing in Discover's UN-competitive deposit products (#45 in MM, #37 in Savings); simply because I now won't be charged unnecessary fees. Fees that many other local and online banks have never imposed in the first place. Wait....what?
willy12
willy12   |     |   Comment #11
The big boys, Ally, Discover & Amex want to draw customers based on well known names & their size. People who are earning little or nothing on their current savings. Not rate chasers like us.
I cannot remember exactly how long I have been using online banks, 20+ years, but when I started and would mention it to people, many would think they were scams. So the big boys seek those who thus far have never considered anything other than a down the street brick & mortar bank or credit union. Id imagine there are a ton of people who would make a lot more money at 2.20% than they currently are. Those people are not going to chase a small bank like Northern & jump thru all the hoops like many of us here do.
RichReg
RichReg   |     |   Comment #13
Jumping through hoops requires accelerating your circulatory system.
I like knowing I'm still alive, and not needing to have "Discover" guide my hand across an application to mark an "X" on the dotted line.
Mike
Mike   |     |   Comment #3
Keep the fees and add some more, just give us 3% saving accounts rates.
Jim
Jim   |     |   Comment #17
I agree with you Mike, give us high rates and put those fees for the fools and the ignorant savers. If you do not know how to avoid fees, you should not be saver at all.
buckeye61
buckeye61   |     |   Comment #4
I understand the comments about Discover Bank's savings rates not being competitive with the rate leaders, but most of these smaller/obscure online banks that offer higher rates are probably not considered serious competition to large online banks like Discover. Obviously, among the larger online banks there are some better options, but their Money Market account compares favorably to those at Ally Bank and Synchrony Bank(And others) in terms of rates. The no minimum balance requirement is a big improvement.
Boe
Boe   |     |   Comment #5
buckeye61, All those cancellations of fees are just gimmicks, very few people pay them, now, if you can not give good rates and be on the top, the rest is just irrelevant talk, people do not open accounts because of no fees, people open accounts because of great products and great interest rates.
buckeye61
buckeye61   |     |   Comment #6
Boe, everything you say is true, but you would probably be shocked by the difference in total accounts and dollar amounts on deposit between Discover Bank and any of the "Rate Leaders" in the Savings and Money Market list of top rates. Not everyone will chase a better rate if they feel less secure and confident in who they are trusting with their money.
Richardf42
Richardf42   |     |   Comment #7
I have used Discovery as my main Bank for years. It has a great mobile app that is dependable and always up to date. I’m glad to hear about their new fee structure.
DCGuy
DCGuy   |     |   Comment #8
And you don't have to speak to a rep based in India.
Go Navy
Go Navy   |     |   Comment #9
The ultra long-term Discover 10 yr CD @3.05% is looking bettter and better. Set it & (really) forget it. Just wish it had a lower EWP.
HARK!
HARK!   |     |   Comment #16
Don't lock in a rate for 10 years......especially with that huge EWP. Anything and everything can happen during that length of time.
Bretacgal
Bretacgal   |     |   Comment #21
Worst advice in the world, never works. People who say that stay liquid and then are caught with their pants down when rates continue to drop. We've seen the peak, I'm with Go Navy, lock-in long.
Mikey1
Mikey1   |     |   Comment #10
Since the opening bonus for savings is once in a lifetime I’ve kept my DISC account open with a small balance. If they ever decide to be a bit more competitive in their rates I’ll gladly give them the appropriate balance.
Berry
Berry   |     |   Comment #12
Mikey1, wrong thinking, the better rates, if ever announced, will go to the new customers and not the old ones with $1.00 balance in them.
AnnO
AnnO   |     |   Comment #18
Wrong. Discover has repeatedly increased rates on existing accounts.
solarado
solarado   |     |   Comment #14
Too late, I closed my long time Discover MMA last month because I was tired of keeping $2500 in there at their meager interest rate. Although I do like thinking that customers like me "voting with our feet" helped push them to this decision.
HARK!
HARK!   |     |   Comment #15
Discover must really think people are amazingly stupid........Nothing but a gimmick.
Joel
Joel   |     |   Comment #19
Discover, give us better saving rates, forget the gimmicks, fees and other distractions.
Josephine
Josephine   |     |   Comment #20
Just give us next day ACH transfer and better rates...

The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.