An In-Depth Review of Discover’s Banking Products

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Reviewed By

Updated on Wednesday, July 1, 2020

Discover Bank Online Savings Account

A completely fee-free online savings account, with no minimum balance requirements and a competitive annual percentage yield (APY).

APY

Minimum Deposit to Open

1.01%

$0

There is no minimum balance required to open a Discover Bank Online Savings Account, nor any monthly maintenance fees. While account holders do not have the ability to withdraw money from their savings account via an ATM, they are able to access and manage their account online and via a mobile app. That lets users deposit and transfer money to and from Discover Bank and third-party bank accounts.

This account doesn’t come with any fees. Even if you exceed Federal Reserve’s Regulation D, which mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle, Discover Bank will not charge an excessive withdrawal fee.

If you exceed six specific transactions more than once, however, your account may be closed. Discover Bank will only do this if you exceed the limit “more than on an occasional basis.” Be sure to read the Deposit Account Agreement for specifics about this limit.

You can earn a respectable APY with this account, compounded daily and deposited into your savings account every month. As soon as you deposit any money in your account, you’ll begin earning interest.

This is a solid savings account product. It stands out for its competitive APY, zero fees, and having no minimum balance requirement to earn the APY or minimum opening deposit. There are no eligibility requirements to open the account, which can be done online or by phone.

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How Discover Bank’s Online Savings Account compares

Compared with the best online savings accounts in our listing, Discover Bank’s Online Savings Account offers a pretty decent rate, but not the best. With a little research, you can find better interest rates out there at other institutions that also don’t charge fees or have minimum balance requirements.

Discover Bank CDs

A minimum deposit of $2,500 gives you competitive CD rates among online banks, but higher rates can be found.

Term

APY

Minimum Deposit to Open

3 months

0.25%

$2,500

6 months

0.45%

$2,500

9 months

0.55%

$2,500

12 months

0.90%

$2,500

18 months

0.90%

$2,500

24 months

1.01%

$2,500

30 months

1.05%

$2,500

3 years

1.05%

$2,500

4 years

1.10%

$2,500

5 years

1.15%

$2,500

7 years

1.15%

$2,500

10 years

1.15%

$2,500

Discover Bank offers CDs with terms ranging from 3 months to 10 years. Interest is compounded daily and is deposited each month. All of its current CDs require an initial opening deposit of $2,500.

Interest is compounded daily and deposited into the account every month. As with most CD rates, the longer the term of the CD, the higher the rate you will receive. To lock in the highest possible rate for your CD, make sure you fund your account within ten days of applying.

There are early withdrawal penalties for taking your money out before the end of the term. The penalty amount varies, depending on how far you are into your CD’s term.

Term

Less than 1 year

1 year to 4 years

4 years to 5 yrs

5 years to 7 years

7 years or greater

Penalty

3 months’ simple interest

6 months’ simple interest

9 months’ simple interest

18 months’ simple interest

24 months’ simple interest

You do have the option to withdraw any interest earned on your CD and transfer it to another Discover Bank account without penalty. This interest amount can also be left in your CD to compound throughout its life.

Account holders receive notice of CD maturity 30 days before the end of the term. Once a term has ended, account holders have a nine-day grace period to make a change to their CD before incurring penalties. If no action is taken, the CD will automatically renew at the same rate and term.

You can open a Discover Bank CD online or by phone. The only eligibility requirement is the $2,500 minimum deposit, which can be paid via phone, check or an online transfer from your bank. Discover Bank provides the option of opening your CD in the form of a trust, guardian, estate or custodial account. In order to do so, you must call customer service.

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How Discover Bank’s CD rates compare

Overall, Discover Bank CD rates are competitive. They certainly beat out most of the major banks seen in our roundup of the best CDs when it comes to APY. However, if you do some digging, there are better rates out there for CDs, both in terms of minimum deposit and interest rate earned. Discover Bank’s minimum deposit of $2,500 is the biggest downside to this product. Investors without large amounts of capital will find this restrictive.

Discover Bank CashBack Debit checking account

An online checking account with no monthly fees and pays decent cashback rewards.

Discover Bank’s CashBack Debit account is appealing because it doesn’t carry any fees — that means no monthly maintenance fee, no minimum balance requirements and no fees for check ordering or debit card replacement.

It offers free online and mobile banking features, such as bill pay, wire transfers and account management.

One of the account’s main selling points is the cashback reward, which pays 1.00% on debit card transactions, up to $3,000 of purchases each month. This 1% return is not an APY — it’s a straight-up cashback reward. There are no qualifications to earn the cashback rewards — when you spend with your debit card, you’re earning rewards. They can be redeemed as a credit to your checking account or transferred to a Discover Bank CashBack Bonus card account. Terms apply.

Discover Bank has partnered with AllPoint® and MoneyPass® to offer more than 60,000 in-network ATM locations. While Discover Bank does not charge ATM fees for going out of network, it does not reimburse fees charged by third-party ATMs.

How to get Discover Bank’s CashBack Debit checking account

You can open a Discover Bank CashBack Debit checking account online or by phone. There are no minimum deposit requirements, and the bank doesn’t require account holders to keep a minimum balance. Once you open your account, you’ll receive your debit card within 10 business days. Discover Bank offers free checks for account holders, although you must request them.

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How Discover Bank’s checking account compares

Discover Bank’s CashBack Debit checking account stacks up against other banks when it comes to offering a no-fee checking account. While it does boast a large ATM network, in part due to partnerships, it does not reimburse out-of-network ATM fees.

There are better rewards programs according to DepositAccounts list, as well as accounts that don’t require you to spend money to make money. If you spend a significant amount of money via your debit card every month, this rewards program might make sense. If not, there are other banks that offer better APYs on checking accounts for less effort on your end.

Discover Bank Money Market Account

Good withdrawal options, but with a high minimum balance requirement and interest rates that don’t stack up.

APY

Minimum Balance to Earn APY

Minimum Deposit to Open

0.85%

Less than $100,000

$2,500

0.90%

Greater than $100,000

$2,500

Opening a Discover Bank Money Market Account requires a minimum initial deposit of $2,500. There are a few account features worth noting, starting with the withdrawal options. Unlike in the bank’s online savings account, account holders of the money market account will receive checks and a free debit card. Your debit card can be used to withdraw money via ATMs and at stores.

Discover Bank does not charge ATM fees, but if you use an out-of-network ATM and incur a fee, the bank will not reimburse it. It’s important to note that your money market account is subject to the same Federal Reserve regulation, which mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. If you exceed the six withdrawals, you’ll be charged a $15 fee per item from Discover Bank, and Discover Bank may simply close your account. However, this doesn’t apply to withdrawals from ATMs or via official check that is mailed to you. This account also gives you the ability to sign up for online bill pay and overdraft protection.

How to get a Discover Bank Money Market account

The only eligibility requirements to open a Discover Bank Money Market Account is an initial minimum deposit of $2,500. You can open an account either online or by calling one of its banking specialists. To fund your account, you have the option of an online transfer, direct deposit or check, which can be mailed or deposited via Discover Bank’s Mobile Check Deposit app.

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How Discover Bank’s Money Market Account compares

Discover Bank Money Market accounts do not stack up to the other competing offerings listed on our round-up of the best money market accounts. Discover Bank’s competitive account features, like a large ATM network, free checks and a debit card, are nice but its rates do not compete.

Discover Bank IRA CD rates

Competitive rates with a higher-than-average minimum deposit for both traditional IRAs and Roth IRAs.

Term

APY

Minimum Deposit to Open & Earn APY

3 months

0.25%

$2,500

6 months

0.45%

$2,500

9 months

0.55%

$2,500

12 months

0.90%

$2,500

18 months

0.90%

$2,500

24 months

1.01%

$2,500

30 months

1.05%

$2,500

3 years

1.05%

$2,500

4 years

1.10%

$2,500

5 years

1.15%

$2,500

7 years

1.15%

$2,500

10 years

1.15%

$2,500

As in other Discover Bank CD products, the minimum deposit to open an IRA CD is $2,500. This is also the minimum balance required to earn APYs. Discover Bank offers both traditional IRA and Roth IRA CD options, with interest rates that vary depending on the CD term you choose. Terms can go from 3 months to up to 10 years. Early withdrawal penalties remain the same for both IRA and non-IRA CDs.

An IRA CD is a worthwhile investment if you don’t touch your savings and want to earn a higher APY than what’s being offered for your savings account. IRA CDs make the most sense if you’re looking for a long-term investment. While they don’t pay exceptionally high returns, they can be a good investment vehicle in your portfolio if you have extra capital.

How to get an IRA CD with Discover Bank

Opening a Discover Bank IRA CD account can be done by phone or online, and requires an initial minimum deposit of $2,500. Funding your account can be done by phone, via check or via a bank-to-bank transfer from an existing IRA. The bank also allows account holders to initiate a direct or indirect rollover from an existing IRA.

To learn more about Discover Bank IRA CDs or to open your account, visit this link.

SEE DETAILS

Discover Bank's website is secure

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How Discover Bank’s IRA CDs compare

Compared with other options in our listing of the best IRA CDs, Discover Bank’s rates fall somewhere in the middle. The minimum deposit required is higher than on other offerings out there and the rates are competitive, but not high enough to be the best on the market.

Overall review of Discover Bank’s deposit products

Discover Bank has created a suite of banking products that can actively compete in today’s market. Its online and mobile banking has all the necessary features to access and manage your account, and it boasts a large ATM network that limits ATM fees.

Compared with the traditional big banks, Discover Bank has them beat when it comes to rates and offerings. However, if you take the entire market into consideration, these banking products fall somewhere in the middle.

Since all of the reviewed products above do not charge monthly maintenance fees and do pay some form of interest or cash back, you wouldn’t be wrong in opening an account. However, if you’re looking for the best of the best, perhaps you should consider other options.

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.

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