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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 1.85% APY. If you apply for their savings account for the very first time by 11/04/19 and deposit a balance of at least $15,000 by 11/18/19, 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 12/02/19. You can apply online or over the phone. Just be sure to enter or mention the promo code MM1019 when you apply.
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
Annual Percentage Yield (APY)
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.