Discover is doing away with fees of any kind on its checking, savings, money market and certificate of deposit accounts.
The move would be a first for a large bank and comes as smaller online fintechs offer no-fee options and high-yield savings to woo younger and more price-conscious Americans.
Going forward, Discover won’t charge fees for monthly maintenance, checkbook orders, replacement debit cards, insufficient funds, excessive withdrawals, falling below minimum balances and stop-payment requests.
The change will affect the bank’s 1 million customers who have a Discover deposit account and comes after the bank piloted a program that forgave the first fee a customer incurred.
“What we keep hearing resoundingly – and not just from Millennials and Gen Z – is that there’s been a fundamental change in how people think about fees,” said Arijit Roy, vice president of deposits at Discover. “They create a very negative emotion, so we thought we take the next step to eliminate all fees.”
The average fee banks charge to maintain a checking account is $13.58 per month, or $162.96 a year, according to a February MoneyRates.com survey. The percentage of checking accounts without monthly fees dipped to 30.40 percent, down from 31.78 percent six months ago, the survey also found.
Online banks are more likely to offer free checking.
Almost two-thirds of online checking accounts have no monthly fees compared with just a quarter of traditional, branch-based accounts. When online checking accounts charge monthly maintenance fees, they are often lower than those charged by branch-based accounts, MoneyRates found.
Discover, which re-launched its checking account a year and a half ago, helps to change the free banking landscape. Bigger banks typically waive checking or other fees if a customer has more than one account at the institution or meets a minimum balance threshold, said Michael Moebs, CEO of Moebs Services, a bank consulting firm.
“It would be the only bank, thrift or credit union I know of that has eliminated fees on all its deposit accounts,” Moebs said.