Discover Bank Discontinues Fees For Deposit Accounts
To say that Americans don’t tend to harbor great feelings toward large banks would be a bit of an understatement. Thus, while too-big-to-fail institutions continue to be known for increasing fees and decreasing services, online banks and FinTech startups have sought to offer an alternative. Now one major online-only bank is making another push to attract customers, doing away with several account fees.
On Monday, Discover Bank announced it was dropping fees from its checking and savings account products. Prior to this the bank did charge for infractions such as insufficient fees and returned items. However, as of last year, they did waive these fees if a customer was triggering them for the first time. According to CNBC, that feature is partially responsible for inspiring Discover to pursue a fee-free structure.
In a statement regarding the change, Discover’s VP of deposits Arijit Roy said, “Helping our customers lead better financial lives, is at the heart of everything we do, whether that’s removing fees, offering industry-leading rewards or consistently delivering distinctive customer experience. Removing all deposit account fees was an easy decision for us based on our commitment to offer the most rewarding banking products in the industry.” He went on to say, “We consider it a privilege when customers trust us with their money, which is why we put them first by eliminating fees,” Roy said. “We’re promising that if you bank with us, we’re committed to finding you ways to save more of your money. Very few large or direct banks can make that same promise.”
By discontinuing its fees, Discover is now in direct competition with FinTech offerings like SoFi Money that have made their lack of fees part of their main pitch to consumers. Discover is also on par with these products in terms of perks, currently offering 2.10% APY on savings. Additionally Discover’s Cashback Checking enables users to earn 1% cash back on up to $3,000 in debit card purchases.
Overall Discover’s decision to do away with fees on its accounts could be a big deal for consumers. With Roy calling Discover “the first major bank to eliminate all fees from deposit products,” it begs the question as to whether some of its brick and mortar contemporaries could eventually follow suit. Regardless of what happens on that front, surely more customers in search of banking services without the hassle of fees will begin turning their sights to Discover.