UPDATE: This change will not affect current depositors; E-Trade has removed CD accounts from their website and will not be accepting new deposits.

E-Trade has continued to cut back on its banking services, after announcing last week that it will transferring its Complete Savings Accounts to Discover Bank in March.

Moving Away From Banking

This follows a series of actions taken by E-Trade to cut back on its retail banking business so that it can focus more of its resources on investment and brokerage solutions. This could be a result of talks on Capitol Hill about restricting the ability of larger banks to engage in both retail and investment banking within the same institutions. Closely related to the Glass-Steagall Act that was passed in the 30’s to control speculation by bank holding companies, the new regulations could prevent single financial institutions from spanning both retail and investment banking.

Difficulties Staying Competitive

E-Trade has had trouble keeping up with the CD rates being offered by other online banks such as Ally, and after dropping its APY three times in the past few months, the bank has finally decided to exit the market.

Last weeks decision to transfer its Complete Savings accounts to Discover Bank was due to the bank wanting to be able to offer “optimal investing solutions to our customers,” according to an email sent to E-Trade customers. E-Trade will continue to offer the Complete Savings account until March 7th, and has not yet made any announcements about changes to its MoneyMarket, Checking or Mortgage accounts, which appear to still be available.

If you are an E-Trade customer who has been affected by these moves, please comment below and let us and other E-Trade customers know what to expect.

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Ask a Question

  • sadaztec

    So where do the CDs go?

  • etradecustone

    It's really too bad. I've been a customer of e*trade bank since it was Telebank, which it acquired to enter the banking business. My relationship with them grew into brokerage, mortgages (I paid all of mine), retirement accts. etc. Kind of sad to see e*trade self-destruct. And it will have its hands full on the brokerage side alone. A lot of competition from the big boys.

  • Harry

    I don't see E*Trade self destructing, but becomming more competitive in the online broker market. E*Trade needs to dump the businesses that are not adding value to the company. As an investor, I'm happy they are making this move. If the housing market doesn't get worse, then E*Trade will make it and become either side-by-side with TD-Ameritrade, or be aquired by them.

  • Paul

    Is this legit? I have accounts at eTrade and no mention of this. Checked spam mail and everything – no official communication from them.

  • jfaliveno

    I have no confirmation either…..?

  • Eric

    Are we going to hear from Etrade? I've had accounts with them for years, not a word about this move…

  • Awesome22

    I don't see TD buying Etrade…maybe Schwab to gain foothold in the online business. I have an Etrade Savings account and did not get a communication from them either.

  • FM

    Same here. I've heard nothing about it from them. WTF?

  • ebbwith

    This shouldn't effect current accounts, it just means that Etrade is not allowing customers to open up new CDs.

  • Cantbelieveit

    I received a letter from Discover today. Nothing from Etrade, pretty sad way to treat your customers.

  • Anonymous

    I would call that breach of fiduciary duty.
    I never got any information about this neither from Etrade nor from Discover. I never consented to a transfer of my assets. If I wouldn’t have missed 9,000 dollars I would have probably never recognized that funds are missing if the sum would have been much smaller. So how many customers who have multiple accounts and CD’s don’t even know that their money is missing. If you have an old address on file you might never get a notification and your assets are lost forever. There is no note, no nothing on their website or in your account overview that assets have been move. As far as I know a bank cannot move customer funds without consent. They gave up custody of funds as they cannot access those funds anymore.
    I requested my funds back and they told me I have to take care about this on myself to get my assets back. I am close to hiring a lawyer to file a lawsuit after figuring out if they broke the law.
    In case they broke the law then I will let you know, we can file a class action lawsuit is unheard of and outrageous. I called Discover Bank in the meantime and they told me they would call back, now 3 days later I still haven't gotten a call and I have no idea on how to get my assets back.
    I am done with this bank and closing all my accounts, same with Discover, who assisted Etrade in this scam.

    So what comes next they move my money I have in CD to a commodities future traders without my knowledge and without my consent to gamble in the market?

  • dissapointed customer

    This whole process has been handled very poorly. I am an avid online banker. I only got an email telling me welcome to discover bank. I had no idea this was going to happen. So I contacted discover, they wanted to know my ETRADE account numbers to get me set up online. Guess what, my ETRADE accounts were no longer accessible online, so how was I going to get the account number? After hours on the phone, and after I convinced both parties that I was not an Afganistan based terrorist, I was finally able to access my money again. Then comes setting up the routine transfers I use to transfer from my local bank to my online bank. Guess what….the transfers from my local bank to my children's online savings account will not work because discover never offered these types of accounts before. They were terrible sorry about it and were willing to transfer the money right then over the phone (after all, they do want your money in their accounts). Guess what? My transfer amount did not meet the minimum requirements, so now I am just freaking sitting here waiting for discover to figure out wtf they need to to so I can use my accounts. I am really thinking about finding another online bank. I use capital one as well, and they have been very easy to deal with. Maybe they can help. Stay away from discover bank.

  • dissapointed customer

    This whole process has been handled very poorly. I am an avid online banker. I only got an email telling me welcome to discover bank. I had no idea this was going to happen. So I contacted discover, they wanted to know my ETRADE account numbers to get me set up online. Guess what, my ETRADE accounts were no longer accessible online, so how was I going to get the account number? After hours on the phone, and after I convinced both parties that I was not an Afganistan based terrorist, I was finally able to access my money again. Then comes setting up the routine transfers I use to transfer from my local bank to my online bank. Guess what….the transfers from my local bank to my children's online savings account will not work because discover never offered these types of accounts before. They were terrible sorry about it and were willing to transfer the money right then over the phone (after all, they do want your money in their accounts). Guess what? My transfer amount did not meet the minimum requirements, so now I am just freaking sitting here waiting for discover to figure out wtf they need to to so I can use my accounts. I am really thinking about finding another online bank. I use capital one as well, and they have been very easy to deal with. Maybe they can help. Stay away from discover bank.

  • j-e customer

    For my CDs, Etrade has just mailed me a check (old address) when they matured. I found one check at my parents’ house a month after they’d sent it. A nice surprise, but still no notice online (which is the only place I check my accounts). Also, I have a complete savings account with them but there is no mention of Discover having taking it over. I think it’s still in etrade. At any rate, I’m taking out all my cash from etrade to put a downpayment on a house, so I guess I’ll open future bank accounts with other banks, but keep my roth IRA with etrade.

  • Anonymous

    Before my CD matured, I got a letter saying it wasn’t going to auto renew. Then got a check.

  • Roger4252

    I found out during a IRS audit that I have a discover bank account with funds in it. I have never opened a Discover Bank account. When I called customer service I was told that E Trade had financial trouble and they sold my bank account to Discover. I requested the account closed. No such luck. Discover has my birthdate wrong, which they blame on E Trade. So they sent me a signature card to correct it and then I can close the account and collect my funds. As of today I am on my third signature card via mail and they still claim not to receive them. I would just write the money off, however I have to keep filing interest on it to the IRS. If any one knows how to close one of these accounts I would really like your imput.