Is Discover Bank safe/reliable and FDIC insured?

All about Discover & Diners Club - talk about their credit card deals such as the More, Miles, Escape, and others.
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jlk82
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Is Discover Bank safe/reliable and FDIC insured?

Postby jlk82 » Sun Jun 05, 2011 11:51 am

My bank gives me a really bad rate on savings and I saw a banner ad for Discover Bank savings accounts. I guess you can get more than credit cards from them but I am really concerned about my money being safe and FDIC insured. A few years ago when the banks got their bailouts was Discover ever in danger of going bust? I should probably ask first if they were even offering bank accounts back then?


AmanteDecor
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Postby AmanteDecor » Mon Jun 06, 2011 2:29 am

As far as I'm aware, Discover only starting banking very recently and thus was never in a position to be bailed out. Discover accounts are all FDIC insured, so there's no need to worry about it being safe--it will be. Also, if you're interested in alternative online savings accounts with higher APYs than traditional brick and mortar banks, American Express Savings is another great option! I myself went with American Express over Discover because at the time I had an Amex card but no Discover card, so I decided to go with the company that I knew and trusted. I hope this helps you in your decision!

jlk82
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Postby jlk82 » Mon Jun 06, 2011 6:03 pm

I am totally open to either Amex or Discover bank if their rates are comparable but do you find that Amex bank has foreign customer service when you call?

AmanteDecor
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Postby AmanteDecor » Tue Jun 07, 2011 9:15 pm

I've only talked to their customer service representatives once, but the woman whom I talked to had an american accent and was very helpful in addressing my concerns, so I assume the quality is generally quite good. American Express is known for their wonderful customer service for their cards as well, so I don't think you have anything to worry about in terms of getting a representative that is difficult to communicate with--in fact, I think you'll find the opposite!

Iroquois
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Yes Discover did take bailout money and yes it too was under stress

Postby Iroquois » Thu Jun 09, 2011 1:00 pm

A simple Google search easily reveals that Discover chose to convert to a bank charter so it could qualify for TARP funding and then took $1.2 billlion in capital from that program (which it has since paid back as have most financial institutions).

Unlike some banks that took the funding reluctantly, Discover took overt actions on its own to get the capital.

At the time charge off rates were going "vertical" and tremdous uncertainty on many fronts prevailed. TARP funding was also cheap capital, but more importantly available capital in extremely tight markets.

A number of "banks" panicked (in my view) and there were very loud and visible actions in particular by card issuers such as AMEX to close accounts, reduce credit lines and in some cases even pay customers to pay AMEX first before other creditors.

When its all said and done credit card lending is their primary business and savings accounts aren't. That doesn't mean that you can't get a good APY though. If they are paying above market, always ask yourself why they are doing that.



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