Discover Card Adds E*Trade Savings Accounts to its Online Bank
March 1, 2010
By: Joe Taylor Jr.
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In the days leading up to the enactment of the Credit CARD Act, Discover Card secured additional capital by acquiring a portfolio of online savings accounts from stock brokerage E*Trade. Both companies hope to solidify their product offerings through the transaction. E*Trade officials told reporters that the brokerage divested savings accounts from customers with no stock or securities holdings with the company. The move nets E*Trade a small amount of cash, and the ability to focus on more strategic customer service.
The transaction carries bigger implications for Discover Card. Like other credit card issuers, Discover has faced the challenge of diversifying its product offerings to offset reduced finance charges and service fees. Growing its online savings account portfolio grows Discover's lending pool while enhancing its ability to attract new credit card customers. Discover officials recently reported that the company's online bank now holds more than $12.6 billion in deposits.
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About the Author
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.
