In talking about our financial network map, I mentioned that we’re receiving 1.50% APY from Discover Bank. A reader named Alan asked about this, pointing out that Discover lists 1.35% APY on their website.
Upon noticing this discrepancy a week or so ago, I was likewise confused. A bit of Googling, however, pointed to a possible answer… It appears that Discover recently upgraded the savings accounts of some former E*Trade Bank customers whose accounts were transitioned over to Discover when E*Trade got out of the banking business.
It’s not entirely clear to me why some people got upgraded and others didn’t, but I suspect that it was due to account inactivity and a desire to convert these people into active Discover Bank customers. In our case, we’d had $1.02 sitting in our account since the transition, so we were likely part of their target audience.
Anyways… While going through the mail this afternoon, I ran across a letter from Discover Bank explaining the change, but not providing an explanation as to why. Here’s what they had to say:
Your Discover Online Savings Account was upgraded to a Premium Savings Account on 7/19/10 and is now earning an exceptional 1.50% APY! That’s more than 1.35% APY the current yield for Online Savings Accounts – and significantly better than the nation average of 0.24% APY. Take advantage of your new Premium Savings Account rate and see how much more valuable your money can become when you save with Discover.
So, if you have a Discover Bank savings account, you might want to log in and check to see if you’ve been upgraded. The 0.15% difference in APY isn’t a huge deal, but it’s better than nothing.