Discover Bank just announced that there won’t be any fees on all deposit products. Specifically, they are eliminating the following fees on checking, savings, money market and CD accounts:
- Insufficient fund fees.
- Excessive withdrawal fees.
- Stop-payment fees.
- Minimum balance fee on money market accounts.
They already offer accounts with no fees for monthly maintenance, checkbook orders or replacement debit cards. Therefore, this won’t be a big benefit for most savers with Discover Bank accounts.
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Discover Bank News Release
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.
No Money Market Minimum Balance Fee
If you have the Discover Bank’s Money Market Account, then you no longer have to pay the $10 monthly fee for balances under $2,500.
Starting today, there is no minimum balance fee. You will still need a minimum deposit of $2,500 to open a Money Market Account.
No Excessive Withdrawal Fee- Savings & Money Market
Previously, Discover Bank would charge a $15 excess withdrawal fee when you go over six withdrawals (excluding ATM withdrawals) per month.
They have eliminated this $15 excessive withdrawal fee. However, you can’t just go beyond the six withdrawals per month. That limit is governed by federal regulation.
According to Discover Bank’s Deposit Account Agreement, if you exceed the withdrawals 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.
No NSF Fee and Stop Payment Order Fee
All of Discover Bank’s liquid accounts (Savings, Money Market and Checking) will no longer have a $30 Nonsufficient Funds (NSF) fee.
The NSF fee has been eliminated. If you overdraw your account and there are insufficient funds, they tell you:
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.
Of course, Discover Bank still offer overdraft protection to cover transactions that overdraw an account. You do need to enroll in overdraft protection when opening a Discover account.
Finally, the stop payment order is now free.
Fees That Still Exist
Discover still need to make money. Hence, not all fees have been eliminated. There is still an outgoing wire transfer fee of $30. Incoming wire transfers continue to be free.
Your CDs will still have early withdrawal penalties (EWPs).
They don’t charge a fee for using any out-of-network ATM. This doesn’t mean the ATM operator won’t assess a fee for ATMs usage.
Top Discover Bank Products & Benefits
- Discover Cashback Debit offers customers 1% cash back on up to $3,000 in debit card purchases each month.
- Discover offers the option to automatically deposit customer’s Debit Card Cashback Bonus into an eligible Discover Online Savings account each month, allowing them to grow their savings with a high interest rate.
- All Discover Deposits products are accessible via an award winning mobile app and come with 24/7, 100% U.S.-based customer service
- Discover Online Savings Accounts have an interest rate over 5x the national savings average.
My guess is Discover Bank wants to compete with Ally Bank and other fee-friendly online banks. Fees are one of the biggest moneymakers for banks, so this is positive news for a lot of people.
Please note there are still some fees such as wire transfers, breaking CD early, and using ATMs out of the network.
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