Discover Bank Review

Discover Bank’s Online Savings Account offers a smooth banking experience. There’s a lot to like about it: It’s got a high rate, almost no fees, no minimum balance requirements and a handy app that lets you do just about all of your banking right from the palm of your hand. Plus, if you’re already using any of Discover’s other products, like credit cards or loans, you’ll probably find its interface especially easy to use.

The bank does charge a $30 fee for outgoing wire transfers. However, most people generally rely on ACH transfers, so it’s unlikely you’ll come across this fee often.

Unlike the Online Savings Account, Discover Bank’s Money Market Account requires a $2,500 minimum opening balance. Practically speaking, however, there’s not really much of a difference between the two accounts. The only major difference is that the money market account offers a lower rate in return for the ability to write checks from the account, similar to a checking account.

You are still limited to six withdrawals per month from money market accounts because of Federal Regulation D, however, so you can’t really use it as a de facto way to earn interest on your checking account. And although that limit isn’t being enforced right now due to COVID-19 relief provisions, it is still better to plan for how things will operate over the long run rather than just right now.

Keep in mind that financial experts recommend that most people invest their money where it will earn a higher rate over time. That way, you won’t miss out on better earnings than this IRA Savings Account can provide.

But if you’re still interested in this IRA Savings Account, it offers a decent rate — though it doesn’t compete when compared to the best IRA savings account rates currently offered. It also provides the ability to choose which type of IRA to use, a traditional IRA or a Roth IRA.

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Discover Bank’s Checking Account doesn’t offer interest, but it does offer another carrot. You can receive 1% cash back on all of your purchases made with the debit card that comes with the account, up to $3,000 per month — that means you could earn up to $360 a year. Keep in mind, though, that unlike a true interest-bearing checking account, you’ll need to spend that money to earn the rewards, rather than save it in your account to earn interest.

There are no fees associated with this account aside from a $30 wire transfer fee, which you probably won’t encounter often. You can also easily manage your account right from the app, including depositing checks by photo or finding one of 60,000-plus fee-free ATMs around the country through the Allpoint and MoneyPass networks. Note that while Discover won’t charge a fee for using ATMs that are out-of-network, you may still incur third-party charges from that ATM.

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Discover Bank offers an impressive amount of CD term lengths to choose from — 12 in all — ranging from three months to 10 years. Aside from IRA CDs, though, Discover Bank doesn’t offer any special CD options, like no-penalty CDs or jumbo CDs.

However, you will earn a rate that’s on par with some of the best CD rates currently offered. The only thing that could be better about these CDs is if they had a lower minimum deposit requirement — setting aside $2,500 may be a high barrier for some.

If you withdraw your money from your CD before your term is up, you’ll face an early withdrawal penalty. Penalties range from 3 months’ simple interest for terms of less than one year to as much as 24 months’ simple interest for terms of 7 to 10 years.

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As an online bank, you won’t find any branches with Discover Bank. Instead, you’ll access your account through Discover Bank’s robust mobile app or its website. You’ll also have access to over 60,000 fee-free ATMs through Discover’s network. If you run into any problems, you can call a live customer support rep at any time — 24/7/365. There is also the option to reach out via live chat once you log into your account.

These factors have helped to rank Discover Bank as the third-best online bank in the country, according to a 2020 survey from J.D. Power. So if good customer service, competitive rates and a well-rated app are important to you, Discover Bank could be an option worth exploring.

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