Discover Bank Discontinues Fees For Deposit Accounts

Home » Money Management » Personal Finance » Discover Bank Discontinues Fees For Deposit Accounts

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.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Equifax Fined Up to $700 Million Due to Data Breach

Nearly two years after Equifax announced that a data breach had exposed the information of approximately 147 million customers, the credit bureau has reached a settlement deal. This morning the Federal Trade Commission (FTC) announced that Equifax had agreed to pay at least $575 million and as much as $700...

American Express Announces New Blue Business Cash Card

Over the past decade, credit card company American Express has worked to align themselves with small business owners. This includes founding the increasingly popular retail holiday Small Business Saturday, observed the weekend after Thanksgiving each year. Continuing that mission, this week the company announced the launch of a new small...

Mobile Bank Varo Money Refiles for FDIC Insurance

For years one of the big questions surrounding FinTech is whether startups could one day become their own independent banks. Although a few companies have attempted to obtain charters of their own, they've had varying levels of success — none of which have been overwhelmingly positive. However, as Crowdfund Insider...