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California Credit Union Review: Checking, Savings, CD, Money Market and IRA Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

California Credit Union’s checking account options

Personal Checking

An extremely low interest rate with an extremely high minimum balance requirement.
APYMinimum Balance to Earn APY
0.05%$10,000
  • Minimum opening deposit: $0.01
  • Monthly account maintenance fee: $2, though it is waivable.
  • ATM fee: $1.50 at non-CO-OP ATMs; may be charged surcharge
  • ATM fee refund: None
  • Overdraft fee: $27

California Credit Union’s Personal Checking Account leaves a lot to be desired. While it comes with no minimum opening deposit, the minimum balance required to earn its extremely low APY is astonishingly high. It also comes with a monthly maintenance fee, though it can be waived in one of three ways. First, if you are under the age of 18 or over the age of 64, you will not be subject to this fee. Otherwise, the fee can be waived by either setting up a direct deposit of $400 or more per month or by opting for eStatements only, forgoing the paper option.

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eChecking

You won’t be able to mess up and get charged a monthly maintenance fee, but you also won’t be earn any interest.
  • Minimum opening deposit: $25
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 at non-CO-OP ATMs
  • ATM fee refund: None
  • Overdraft fee: $27

Should you opt for eChecking over Personal Checking, you will be giving up any dividends and subject to a higher minimum opening deposit, though the amount required is still extremely reasonable. Because eStatements are a mandatory aspect of this account, you won’t have to worry about a monthly maintenance fee.

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Student Checking

Free paper statements, but no dividends with this account for 13- to 25-year-olds.
  • Minimum opening deposit: $0.01
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 at non-CO-OP ATMs
  • ATM fee refund: None
  • Overdraft fee: $27

Student Checking is available to students who are aged 13-25. This account comes with no monthly maintenance fee, even if you choose to get paper statements every month. While the absence of this fee is great, it does come at the cost of accruing any interest. You will be able to transition your account at age 26 with no headaches; it will be automatically converted to a Personal Checking account.

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HSA Checking

Save for your healthcare expenses while sheltering your money from taxes.
APYMinimum Balance to Earn APY
0.10% $50
0.20%$25,000
  • Minimum opening deposit: $50
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: $27

If you have a high-deductible health plan, you may qualify to open a Health Savings Account (HSA). This account is tax-advantaged, which means that the money you stash away is tax deductible, and when you spend money from this account on qualified healthcare costs, the withdrawals won’t be taxed, either.

Notably, while this account is an HSA, it is otherwise treated as a checking account would be, without limitations on transactions.

You cannot use an ATM with this account, but you will be given a debit card which you can use to pay your healthcare providers.

How to get California Credit Union’s Checking Accounts

You can open Personal Checking and eChecking online or in person at your local branch. Be prepared with your government-issued ID, current address, Social Security number and date of birth. If you are 18 or older, you can also open your Student Checking account in this way. However, if you are younger than 18, you will need to visit a branch with the adult with whom you’d like to share joint ownership.

The HSA checking account must be opened in person or via mail. If you’d prefer to do it via postal mail, you can obtain the necessary paperwork here.

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How California Credit Union’s checking accounts compare

Half of California Credit Union’s checking accounts pay no dividends. HSA dividends will concern only a select group of consumers, while the low dividends and high minimum balance requirements on Personal Checking affect a much larger group.

There are much more lucrative offers out there. You can secure dramatically higher rates and lower minimum balance requirements by shopping the best online checking accounts.

California Credit Union’s savings account options

Share Savings

A savings account that carries the same APY as its checking account counterpart.
APYMinimum Balance to Earn APY
0.05%$100
  • Minimum opening deposit: $0.01
  • Minimum balance to earn APY: $100
  • Monthly account maintenance fee: $2.50, though it can be waived.
  • ATM fee: $1.50 at non-CO-OP ATMs
  • ATM fee refund: None
  • Overdraft fee: $27

While Share Savings has a much lower minimum balance requirement to earn the APY when compared to Personal Checking, it also has the exact same APY offering. This is abnormal; typically savings accounts pay more than checking.

This account does come with a monthly fee — however, you can avoid it by maintaining a daily balance of $100 or more, or by setting up a direct deposit of at least $400 per month.

You will also need to keep in mind that you cannot make more than six transfers or withdrawals per month without penalty from the credit union. This rule, known as Regulation D, is governed by federal authorities. If you make more than six withdrawals per month from your savings account, you will be charged an excessive withdrawal fee.

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Student Savings

Low fees and minimum balance requirements are offset by a low APY.
APYMinimum Balance to Earn APY
0.05%$0.01
  • Minimum opening deposit: $0.01
  • Minimum balance to earn APY: $0.01
  • Monthly account maintenance fee: None
  • ATM fee: None
  • ATM fee refund: None
  • Overdraft fee: $27

Your eyes aren’t deceiving you: The APY on this student account is also the same as Personal Checking. However, you’ll be able to earn that low APY on any balance you keep in your account. You’re also able to dodge ATM fees at out-of-network ATMs — well, you’ll be able to dodge the ones charged by California Credit Union. Fees charged by outside ATM-owners may still be applied and are not refunded.

There is no minimum age on this account, but the max age is 25. When you turn 26, this account will be converted into Share Savings.

This account is also subject to a $10 excessive withdrawal fee after the sixth per month.

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Summer Savings

An account that helps educators get through the summer months when paychecks are slim to nonexistent.
APYMinimum Balance to Earn APY
0.10%$100
  • Minimum opening deposit: $100
  • Minimum balance to earn APY: $100
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 at non-CO-OP ATMs
  • ATM fee refund: None
  • Overdraft fee: $27

Summer Savings is an account built especially for people who work in the education system. After you get it set up with your initial deposit, you will be able to put money in directly from your paycheck via direct deposit. By saving a little each month, you’ll have enough money to go around during the summer months when your paychecks stop coming in.

While it’s likely best to keep this money untouched until disbursement in July, you can make withdrawals at any time without penalty as long as you stay under the six-withdrawals-per-month limit. It is worth noting that the APY on this account is double that of other savings accounts offered by California Credit Union, but it’s still not very high when you compare it to offers from outside competitors.

How to get California Credit Union’s Savings Accounts

You can open any of California Credit Union’s savings accounts account in person or online with your Social Security number, a government-issued ID, current address and date of birth. However, if you’re under the age of 18, you will need to visit a branch in person with the adult who will share ownership of the account with you.

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How California Credit Union’s savings accounts compare

The dividends offered on California Credit Union’s savings products are extremely low. It is highly recommended that you shop around for a significantly more competitive account on our list of the best online savings accounts. If you work in the education system, know that California Credit Union isn’t the only financial institution offering a product like Summer Savings. Sometimes these accounts will go under the label of “club” accounts, but many credit unions offer them, and they sometimes offer them with higher dividend rates.

California Credit Union’s CD rates

Share Certificates

Penalties for early withdrawal are heavier than they might seem at first glance.
TermAPYBalance Requirements
3 Months1.00%$1,000
3 Months1.00%$10,000
3 Months1.00%$100,000
6 Months1.40%$1,000
6 Months1.40%$10,000
6 Months1.40%$100,000
12 Months1.75%$1,000
12 Months1.75%$10,000
12 Months1.75%$100,000
18 Months2.00%$1,000
18 Months2.00%$10,000
18 Months2.00%$100,000
24 Months2.20%$1,000
24 Months2.20%$10,000
24 Months2.20%$100,000
36 Months2.30%$1,000
36 Months2.30%$10,000
36 Months2.30%$100,000
60 Month2.50%$1,000
60 Months2.50%$10,000
60 Months2.50%$100,000
  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: Varies
  • Early withdrawal penalty: 90 days’ worth of dividends on certificates with terms of 12 months or less; 180 days’ worth of dividends on certificates with terms of more than 12 months.

Share Certificates at California Credit Union have a reasonable opening deposit requirement and early withdrawal penalties, but that’s about where the positives end. First of all, if you do make a withdrawal, not only will you be charged those penalty fees, but your APY will drop to whatever is currently being offered on Share Savings — a miniscule amount.

The number one thing you’d like to see in a certificate is a competitive APY offering, but this product simply falls short. You can find better rates elsewhere; if you’re going to lock your money up for a period of time, make sure it’s earning as much in dividends as possible.

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Accelerator Certificate

The ability to take advantage of a rate bump isn’t worth the low APY.
TermAPYBalance Requirements
25 Months2.10%$10,000
25 Months2.10%$100,000
  • Minimum opening deposit: $10,000
  • Minimum balance amount to earn APY: Varies depending on desired APY
  • Early withdrawal penalty: 180 days’ worth of dividends

The primary reason to open an Accelerator Certificate is to take advantage of its rate bump option. At any one point during the term of your certificate, you can opt to request a rate bump. That means if the rates California Credit Union is offering go up over the term of your certificate, you’ll be able to take advantage of them.

However, the ability to request a rate bump may not be worth it. The minimum required opening deposit for this certificate is markedly higher than that of California Credit Union’s Share Certificates, and the initial rate itself is nothing to write home about. In fact, you could score a higher rate by opening a 24-month Share Certificate, even though the term is shorter.

How to get California Credit Union’s Certificates

Certificates can be opened online or in person with your government-issued ID, current address, date of birth and Social Security number.

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How California Credit Union’s CD rates compare

The APY offered by California Credit Union on its certificate products is just not competitive. The best offers on the market are often over an entire percentage point higher, which means your money could be earning more in dividends elsewhere. The ability to bump your rate up to take advantage of future rates via the Accelerator Certificate is negated by the fact that its offered APY is significantly lower than what you’d find elsewhere. You can hope that rates rise in the future, or you can seek out higher rates that actually exist in this very moment on our list of the best CD rates.

California Credit Union’s money market account options

Money Market Account

Relatively low minimum balance requirements are countered by extremely low APY offerings.
APYMinimum Balance to Earn APY
0.05%$0.01
0.15%$2,500
0.20%$10,000
0.25%$50,000
0.30%$100,000
0.30%$500,000
  • Minimum opening deposit: $2,500
  • Minimum balance to earn APY: $0.01
  • Monthly account maintenance fee: $5, if your balance falls below $2,500
  • ATM fee: $1.50 at non-CO-OP ATMs
  • ATM fee refund: None
  • Overdraft fee: $27

Money market accounts used to be known for having higher interest rates than your standard savings. That has changed in recent years, though, and some savings accounts have started to keep pace with money market accounts.

Unfortunately, California Credit Union’s money market account does not offer a competitive APY. At its lowest tier, it offers the same rate as the credit union’s savings account which, lest you forget, is the same rate as its checking account. The fact that these rates don’t even get close to breaking 1.00% means you should probably look elsewhere for your money market needs.

If you do choose to open this account, remember to keep a close eye on your balance so you won’t be charged the monthly maintenance fee. You’ll also want to bear in mind that money market accounts are also subject to Regulation D, so you won’t be able to make more than six withdrawals per month from this account without incurring excessive withdrawal fees imposed by the credit union.

How to get California Credit Union’s Money Market Account

This account can be opened in person or online with your government-issued ID, Social Security number, birthdate and current address.

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How California Credit Union’s money market accounts compare

California Credit Union’s APY offerings on money market accounts are not remotely competitive. While minimum balance requirements are minimal to low when compared to other financial institutions, that doesn’t much matter when you can find significantly better rates on savings accounts, not to mention on our list of the best money market accounts.

California Credit Union’s IRA account options

IRA CD rates

IRA Share Certificates

These rates weren’t great outside of an IRA, and they don’t get more attractive within one.
Term  APYBalance Requirements
3 Months1.00%$1,000
3 Months1.00%$10,000
3 Months1.00%$100,000
6 Months1.40%$1,000
6 Months1.40%$10,000
6 Months1.40%$100,000
12 Months1.75%$1,000
12 Months1.75%$10,000
12 Months1.75%$100,000
18 Months2.00%$1,000
18 Months2.00%$10,000
18 Months2.00%$100,000
24 Months2.30%$1,000
24 Months2.30%$10,000
24 Months2.30%$100,000
36 Months2.30%$1,000
36 Months2.30%$10,000
36 Months2.30%$100,000
60 Month2.50%$1,000
60 Months2.50%$10,000
60 Months2.50%$100,000
  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: Varies
  • Early withdrawal penalty: 90 days’ worth of dividends on certificates with terms of 12 months or less; 180 days’ worth of dividends on certificates with terms greater than 12 months.

Some financial institutions will offer higher rates on certificates when they are found inside of an IRA — California Credit Union does not. The offered APY is identical to that offered on Share Certificates outside of an IRA, and we already know those rates were low.

An IRA is meant to help you build wealth for your retirement. Holding a certificate inside an IRA is a notably conservative investment option. It’s not worth hindering your money’s growth further by stunting it with low dividend rates. Instead, shop around for higher rates elsewhere.

How to get California Credit Union’s IRA Share Certificates

This account must be opened in person. Call your local branch to schedule an appointment.

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How California Credit Union’s IRA CD rates compare

While minimum deposit requirements are par for the course with this product, the rates offered by California Credit Union on its IRA certificate products are very low. You’re going to want to shop our list of the best IRA CD rates to ensure you’re getting the highest return possible on this already conservative portfolio holding.

IRA Savings Account

Low returns cripple this already conservative portfolio holding.
APYMinimum Balance to Earn APY
0.10%$50
0.15%$50,000
  • Minimum opening deposit: $50
  • Minimum balance to earn APY: $50
  • Monthly account maintenance fee: None

Once again, California Credit Union presents an account with a disappointingly low APY offering. Other financial institutions offer rates over or nearly two entire percentage points higher than what you will find here. If the IRA Certificate was a conservative portfolio holding, an IRA savings account is even moreso. Make sure you’re getting the highest rate possible if you’re already going to be making conservative money moves with your retirement savings.

How to get California Credit Union’s IRA Savings Account

Visit your local branch to open this account, as you cannot cdo so online.

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Overall review of California Credit Union’s banking products

When you look at the big picture, California Credit Union offers a menial amount in dividends. That holds true whether you’re looking at IRA Savings, Personal Checking, Accelerator Certificates or Student Savings. No matter how agreeable other terms on the account may be, it doesn’t help much in light of such small returns.

There are other financial institutions out there. If you have your heart set on a credit union, know that there are credit unions out there offering significantly more competitive rates. You don’t necessarily have to live around the block to take advantage of these rates. Some credit unions are open for national membership, some operate at a statewide level and others still are open to those in certain professions. You can find a good match. Unfortunately, California Credit Union probably isn’t one of them.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brynne Conroy
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Brynne Conroy is a writer at MagnifyMoney. You can email Brynne here

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Credit Cards, Reviews

American Express Gold Card: Good Travel Rewards for a Fee

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners. This site may be compensated through a credit card partnership.

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The American Express® Gold Card is an upgraded American Express charge card without a pre-set spending limit. It’s also a card that rewards cardholders with American Express Membership Rewards® Points for airfare, dining, gas, and grocery spending.

A charge card is one that you need to pay off completely each billing cycle, so there’s no interest. However, since there’s no pre-set spending limit either, you need to keep an eagle eye on spending activity to make sure you can pay off the statement in full at month’s end. Making a late payment can cause you to forfeit Membership Reward points earned during that billing cycle.

In this post, we’ll discuss the American Express® Gold Card terms and how to redeem points. Keep reading for an overview on:

  • American Express® Gold Card basics
  • How to redeem Membership Rewards points earned
  • The fine print details
  • The benefits and protections
  • The pros and cons

The basics of the American Express® Gold Card

3X Membership Rewards® points for flights booked directly with airlines or on amextravel.com and 4X points at restaurants worldwide and U.S. supermarkets (on up to $25,000 per year in purchases, then 1X).

$100 airline fee credit.

You can get up to $100 airline fee credit on your statement each calendar year to cover incidentals charged by an airline of your choosing. Qualifying incidentals are charges separate from your airline ticket like baggage fees and not ticket upgrades.

American Express® Gold Card

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American Express® Gold Card

Annual fee
$250
Rewards Rate
3X Membership Rewards® points for flights booked directly with airlines or on amextravel.com and 4X points at restaurants worldwide and U.S. supermarkets (on up to $25,000 per year in purchases, then 1X).
Credit required
good-credit
Excellent/Good

How to redeem Membership Rewards® Points earned

Through Membership Rewards®, cardholders can transfer points to participating travel and lodging loyalty programs or redeem points for travel bookings, gift cards, statement credits, and other rewards. The value of your points varies depending on how you choose to use them.

Flights, hotels, and vacations

You can pay with points for flights, hotels, and vacations on the American Express Travel site. Using points for flights offers excellent value.

Here’s the point value breakdown on travel and accommodations:

  • Flights: $10 per 1,000 points
  • Hotels, cruises, and vacation packages: $7 per 1,000 points

Transferring your Membership Rewards® Points

If you choose to transfer your points to another program, generally, 1,000 Membership Rewards® Points will transfer as 1,000 miles, points, or credits.

However, transfers that have a different value include (as of the publication date of this article):

  • British Airways and Iberia: 250 Membership Rewards points = 200 Avios
  • El AL Israel Airlines: 1,000 Membership Rewards points = 20 Matmid points
  • Hilton: 1,000 Membership Rewards points = 1,500 HHonors points
  • JetBlue Airways: 250 Membership Rewards points = 200 JetBlue TrueBlue points
  • Starwood Preferred Guest: 1,000 Membership Rewards points = 333 Starpoints
  • Virgin America: 200 Membership Rewards points = 100 Elevate points

Occasionally, there are transfer specials for participating loyalty programs.

Statement credit and gift cards

Using points to put a dent in your credit card bill won’t be the best use of your points. 1,000 points equals just $6 in a statement credit.

Several of the gift cards through Membership Rewards® will give you more in cash value. For example, 1,000 points can get you a $10 gift card at restaurants, retail stores, and hotels including:

  • Hyatt Hotels and Resorts
  • Mandalay Bay Resort & Casino
  • Maggiano’s Little Italy
  • Seasons 52
  • Banana Republic
  • Crate and Barrel

There’s an entire list of the redemption values for gift cards on the Membership Rewards® site.

Other rewards

Using points for shopping, charitable donations, and entertainment are other redemption options. But, again, these options won’t give you as much value for your points as redeeming for flights and gift cards.

The value of 1,000 points ranges from $5 to $7 when shopping at retailers through Membership Rewards® or at Ticketmaster, Amazon.com, BestBuy.com, or Newegg.com.

The fine print

The American Express® Gold Card has an annual fee of $250. If you spend a lot of money on the card, the fee can be worthwhile. However, if you don’t spend a lot, you might want to consider a no fee option.

In addition – when you transfer points to a U.S. frequent flyer program, there’s a $0.0006 fee charged per point to compensate for the federal excise tax. Although this fee has a lot of zeros in it, the cost may still be impactful if you’re transferring a lot of points. For instance, 100,000 points transferred will cost you $60.

On the plus side, this card has no foreign transaction fee.

Benefits and protections

Car Rental Loss and Damage Insurance

If you pay for a qualifying car rental with your American Express® Gold Card, the rental car is covered against damage and theft after declining the collision damage waiver. Rentals that won’t qualify for coverage are trucks, off-road vehicles, full-size sport vehicles, and exotic cars.

Purchase Protection

If an item you purchase is lost, stolen, or damaged within 90 days of purchase, you may be reimbursed for it.

Pros and cons

Pro: 3X points on travel. If you fly often for work or play, this card rewards you well each time you use it.

Con: The fee. The biggest con here is the annual fee. But, since there are several ways you can earn points in the 3X and 2X categories, you may be able to easily cover this fee throughout the year.

Pro: Membership Rewards. This card is enrolled in the Membership Rewards® Points program and gives you many options for point redemption. The Membership Rewards® site is also incredibly easy to navigate, and there’s no ambiguity in point value. The rewards portal shows examples of exactly what your points are worth for each redemption option.

Con: The fee to transfer points. The ability to transfer points to another program is a pro, but being charged for U.S. frequent flyer program transfers is a tiny gotcha in the fine print.

Pro: No foreign transaction fees. One area in the fees where you do catch a break is with foreign transaction fees. This aspect of the card is fitting since it’s one that rewards you for planning travel.

Who will benefit most from the American Express® Gold Card?

Your ability to earn enough points to surpass the fee will determine whether this is a good card for you.

And if you’re shopping around for a rewards program that will give you the most value for travel, Chase Ultimate Rewards® is an option you should compare to American Express Membership Rewards®.

The Chase Sapphire Preferred® Card*, in particular, is part of the Chase Ultimate Rewards® program and allows you to transfer points to other travel partners as well. Plus, it has an offer that gives 1.25 cents per point for travel. This is slightly more value than what you get for flights with American Express Membership Rewards® since 1,000 points per $10 works out to 1 cent per point.

Before signing up for any rewards card, you should do this type of comparison shopping to figure out which offer will give you the most value for your spending habits.

*The information related to Chase Sapphire Preferred® Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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Earning Interest, Reviews

Discover Bank CD Rates Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Discover Bank
Most people know Discover as a credit card company, but it also operates an online bank and offers some of the best rates and terms on checking and savings accounts and certificates of deposit (CDs).

Savings account bonus offer: Earn up to $200 on your first Discover savings account

As a bank, Discover offers some of the best products on the market. Currently, they’re offering a major deal on their online savings account, which currently earns 1.80% APY. If you apply for their savings account for the very first time by 12/02/19 and deposit a balance of at least $15,000 by 12/16/19, you can earn a $150 bonus. If you deposit a balance of at least $25,000 by the same date, you can earn a $200 bonus. Applying for the account is easy as you don’t need to go to a branch. Bonuses will be credited to your account by 12/30/19. You can apply online or over the phone. Just be sure to enter or mention the promo code MM1119 when you apply.

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If you’re looking for CDs in particular, Discover is currently considered to have some of the best CDs due to their customer service and digital tools.

Discover Bank CD rates

CD term

Annual Percentage Yield (APY)

3 months

0.35%

6 months

0.65%

9 months

0.70%

12 months

2.10%

18 months

2.10%

24 months

2.15%

30 months

2.15%

3 years

2.15%

4 years

2.15%

5 years

2.20%

7 years

2.25%

10 years

2.30%

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How do Discover Bank CD rates compare?

While Discover Bank CD rates aren’t always the highest available, they are consistently among the top offers across all terms. However, you may be able to find a similar or even better rate with a CD that has a lower minimum deposit than Discover’s $2,500 requirement. Currently, several nationwide banks offered a 12-month CD at a rate higher than Discover’s 12-month CD APY, while requiring a lower minimum deposit. For example, at the same time the above rates were available at Discover, there were 12-month CDs with rates as high as 2.10% APY with a lower minimum balance amount to earn the APY.

It’s always great to go for the highest interest rates possible, but keep your CD investing strategy in mind. If you’re investing in CDs using the ladder strategy, it might be easier to keep everything in one bank since you’ll be switching in and out of CDs frequently.

Discover also stands out from its competition in the CD space with its mobile app and 24/7 U.S.-based customer service. If you value such features, keep those particulars in mind when weighing Discover CD rates against others’.

What you need to know about Discover Bank’s CDs

Discover Bank is very transparent in terms of fine print. It’s not difficult to understand what’ll happen with your money after you invest it. We’ll cover the basics here about what you need to know to invest in Discover Bank’s CDs.

How to open a CD

It’s very simple to open up a CD with Discover Bank. Go to their CD webpage and click on the orange “Open an Account” button near the top right of the page. You can then choose which accounts you’d like to open. Select “CD,” choose a CD term and enter how much you’d like to deposit.

You’ll then need to complete the application by providing your name, address, date of birth, phone number, Social Security number, employment status and possibly even your driver’s license. Once your application is complete and accepted, you’ll need to fund the account.

How to fund the CD

You’ll need to fund it within 45 days of submitting your application, which you can do in one of three ways:

  • Transfer funds from another bank account over the phone. (You can only do this when you first fund your account.)
  • Transfer funds from another bank via online transfer.
  • Write a check to yourself and send it to the following address:Discover Bank
    P.O. Box 30417
    Salt Lake City, UT 84130

The minimum deposit amount for each of Discover Bank’s CDs is $2,500. Once you open a CD, you can’t deposit more money later, so it’s a good idea to make sure you have all the cash you want to invest before you open the account.

Withdrawing funds from the CD

When you want to withdraw money from your CD, the biggest thing to consider is whether that CD has matured yet, or finished its term.

If your CD has not matured, you’ve got options: You can take the interest out penalty-free at any time, or you can withdraw the principal (or the money you deposited) at any time as long as you pay an early-withdrawal penalty. This penalty varies depending on the original term of your CD:

  • less than one year: three months’ worth of simple interest
  • one year to less than four years: six months’ worth of simple interest
  • four years: nine months’ worth of simple interest
  • five years to less than seven years: 18 months’ worth of simple interest
  • seven years or longer: 24 months’ worth of simple interest

If your CD has finished its term, you can withdraw your money penalty-free, allow the CD to renew or roll it into a CD of a different term length. (More on that in a bit).

Earning interest on a Discover CD

Your CD will start earning interest on the same business day that you fund the account. The interest will be added to your account once each month, however.

When it comes to what to do with your interest, you have two options: The default option is to allow it to compound within the CD (meaning you’ll earn interest on that interest), or you can have it automatically deposited each month into another Discover bank account.

What happens once the CD matures?

You’ll get a heads-up notice about a month before your CD matures so you can decide what to do with the money. You have two main options: Either reinvest it into another CD (of the same term length or a different term length), or withdraw the money from the CD and put it into another account (such as a checking or savings account, or perhaps a CD at a different institution).

If you don’t let Discover know what you want to do with the maturing CD, the CD will automatically renew into another one of the same term length. You have a nine-day grace period after your CD automatically rolls over to make any changes or withdrawals penalty-free.

The bottom line

As far as big-name banks go, Discover offers great CD products. Wells Fargo, for example, only offers interest rates as high as 1.55% APY on a $5,000 deposit for a 58-month CD. Chase Bank offers even lower maximum rates — an abysmal 1.05% APY, and only if you can commit a minimum of $100,000 for 10 years.

If you’re the kind of person who likes to keep your finances in one place, Discover also has great credit cards, as well as competitive online savings and checking accounts. No matter how long you’re considering putting money in a CD, Discover is worth a look. Even if it doesn’t have the best available rate, it’s usually within several basis points of the top offerings and well above the average APY.

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Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here