Are you looking for a new online savings account with high interest rates? If so, you might want to check out Discover Bank.
Discover offers one of the best online savings accounts based on criteria such as interest rates, ease of use, and bank features.
In this Discover Bank review, we’ll take a close look at the accounts this bank has to offer so you can decide if it’s a good fit for you.
Discover Bank Review
Summary
When it comes to Products & Services, Discover Bank likely has what you need. One of its best options is the Cashback Checking account, which can put up to $360 in bonus cash in your wallet per year. Discover Bank’s Interest Rates are very competitive and among the highest for online banks. Hardly any Fees & Charges make Discover Bank a real winner. The Website/App is easy to use, and you can contact Customer Service 24/7. The one downside is that there is only one Discover Bank branch office.
Discover Bank Features
| Discover Bank | Features |
|---|---|
| Banking Account Types | Cashback Checking, Online Savings, Money Market, CDs |
| Other Account Types | Credit Cards, Home Equity Loans, Personal Loans, Student Loans |
| Minimum Required Deposit to Open Account | $0 |
| Number of Branches | 1 |
| ATM Network Size | More than 60,000 no-fee ATMs |
| ATM Reimbursements | N/A |
| Remote Deposit | Yes |
| App Availability | iOS, Android, and Mobile Optimized Website |
| Bill Pay | Yes |
| Person to Person Money Transfers | Zelle |
| Money Transfers | ACH, Wire Transfers, Zelle |
| Customer Service Types | Phone |
| Customer Service Hours | 24/7 |
| Member FDIC | FDIC Certificate #5649 |
| Routing Number / ABA Number | International Wire Transfers – 043000261 SWIFT Code: IRVTUS3N |
| Current Promotions | No Current Promotions See Current Bank Promotions |
Additional Features
- Free Access to More Than 60,000 ATMs. Discover Bank has a huge network of ATMs cardholders can use for free.
- FDIC Insurance. Each Discover Bank account is FDIC-insured up to $250,000.
- 24/7 Live Customer Service. You can always talk to a human being when you need one.
- Cashback Debit. Discover’s rewards checking account lets you earn 1% cash back on qualifying purchases. See below for more details.
What Is Discover Bank?
Discover Bank is a financial institution that’s nearly entirely online. There is only one brick-and-mortar branch office in the world, located in Delaware.
The bank is owned and operated by Discover Financial, one of the world’s largest credit card companies. Discover Bank has been around since 2000 when Discover Financial rebranded the financial institution Greenwood Trust Co., which it had acquired back in 1985.
Along with its well-known credit card products, Discover Bank offers a wide range of banking and other financial products, including an online savings account, checking accounts, money market accounts, CDs, and IRAs.
How to Get Started With Discover Bank
Opening a Discover Bank account is quick and easy. It’s a five-step process that can be quickly handled online.
Like opening most financial accounts, it takes about 15 minutes and requires some personal information including your name, birth date, and SSN.
If you wish to open a joint account, make sure you have the other account holder’s personal information at hand, too.
Funding Your Discover Bank Account. You can fund your new Discover Bank account with an ACH transfer, from another checking account, or by wire transfer if you wish.
You can easily link your Discover savings or checking account to external accounts, including other online banks, investment accounts, brokerages, and online money management tools and aggregators.
I have my Discover savings account linked to my brokerage account for transferring money to my investment accounts, another online bank for transferring money between my savings and main spending account, and it is linked to my Personal Capital account so I can better track my savings and investments.
You can also link your Discover account to a Mint.com account, Quicken, and other online money management tools.
Discover Bank Account Options
Discover Bank Cashback Checking
One of Discover Bank’s most popular products is its cashback checking account. And for good reason, too — this online checking account is one of the best places to hold your money, with several advantages that most banks don’t offer.
The first thing that you should know is that there are no monthly fees or balance requirements that you’ll have to meet.
Additionally, you’ll have access to more than 60,000 ATMs across the nation with no fees. You can also use Discover’s online bill pay with no fees, reorder checks without paying a dime, and replace your debit card at no cost.
The best advantage of Discover’s checking account is that you can earn 1% on up to $3,000 in debit card purchases every month.
There are a few restrictions on the cashback rewards. For example, you won’t earn cash back on money orders ATM transactions and several other exclusions.
However, this cashback program is something that you won’t find with just about any other online checking account.
Earning 1% cash back on $3,000 in debit card purchases could mean an extra $360 in your pocket each year. You’re going to be using your debit card anyway, so you might as well earn some money every time that you use it.
Discover Bank Online Savings Account
There is no minimum requirement to open a Discover Bank account, and there’s also no minimum daily balance or fees. And Discover Bank currently offers some of the highest rates in the U.S.
As I mentioned above, it’s quick and easy to link your Discover Bank savings account to any other bank account you may have, giving you quick access to high interest rates, but easy access to your funds if you need them.
Right now I use my Discover account primarily to maintain my emergency fund. I can earn higher-than-average interest on cash I don’t need to spend right away.
Discover Bank CDs
If variations in the stock market concern you or you want to have guaranteed income without the possibility of losing money, then a CD is a nice way to diversify a portfolio that’s heavy on stocks.
Like most banks, Discover offers certificates of deposit (CDs) with higher rates, depending on the length of the term.
If you’re looking at setting up a CD ladder, then Discover Bank offers attractive rates and terms for your purposes.
You can take out a CD for as little as three months or as long as 10 years. The minimum deposit is $2,500, and the interest rates increase the longer you lock your money into a CD.
Discover Bank has very competitive CD rates based on what I have seen on Bankrate and a few other interest rate aggregator sites.
Because the rates change frequently based on the length of the CD and other factors, I can’t list them all here. But you can find current Discover Bank CD Rates by visiting the bank’s website.
Stabilize Your Retirement Savings with IRA CDs
Many, but not all, online banks offer IRA CDs. I prefer to open IRAs at a brokerage instead of a bank, but I understand the need or desire to use CDs as an investment vehicle, particularly if you want an investment with a guaranteed return and no risk. Discover Bank offers IRA CDs up to 10 years in length.
Discover offers both a Roth IRA and Traditional IRA CDs. With a Roth IRA CD, you invest after you pay the taxes on the money, and it grows and can be withdrawn tax-free.
The traditional IRA CD has slightly different tax benefits: You invest before paying taxes on the income, the account grows tax-free, and then you pay taxes on the money you withdraw.
Discover Money Market Account
Discover Bank money market accounts have a minimum opening balance and a minimum daily balance of $2,500.
These accounts are similar to a high-interest checking account but are limited to six withdrawals per month. They are usually good for paying bills and gaining access to your funds more easily than with a standard savings account.
However, you need to maintain a balance of $10,000 to have a comparable interest rate to the savings account. The interest rates frequently change. You can find Discover Bank Money Market rates by visiting the bank’s website.
Discover Bank Customer Service
So far I have had to contact customer service only once (directly after opening my account). I found the support team prompt and courteous, which is more than you will find at the customer service for some banks. Plus, you can call them 24/7!
- Discover Bank telephone number: 1-800-347-7000
- Discover Bank website: https://www.discover.com
- Discover Bank address: 502 E. Market Street, Greenwood, DE 19950
Discover Bank Pros & Cons
Pros
- No Fees. Fees are few and far between with a Discover Bank account. In addition, checking and savings accounts have no required minimums to open or maintain.
- 24/7 Customer Service. You can always talk to a Discover representative, no matter the hour of the day.
- Good APY. Discover Bank will pay you a decent rate for your deposits.
- Cashback Checking. Chances are, you’re going to use a checking account, so you might as well get cash back on it!
- Huge ATM Network. Discover Bank gives you fee-free access to more than 60,000 ATMs.
Cons
Only One Physical Location. Unless you live in Delaware, you won’t be doing any branch banking.
Conclusion
Overall, I’ve been very pleased with my experience with Discover Bank. With decent interest rates, hardly and fees, no minimums on checking and savings account options, and one of the country’s largest ATM networks, there’s a lot to like.
The biggest downside to the account is that there’s only one branch location (in Delaware). So you will want to have another account if you need to frequent a local bank. Finally, you will need to look elsewhere if you need to open a business checking or savings account.
Still, many customers will find the high rates and lack of fees worth giving up the convenience of in-person banking.
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Roger says
Opening an online savings account with Discover Bank is a mistake. I found out the hard way. They are a day or two slow in transferring money out. That hurt a little but one can live with that. There are several other minor things that are troublesome, including horrible customer service. One can live with some of these things, as long as my money is fine. The big issue came when I transferred everything out of the account on the 24th of the month. I was stunned when I didn’t get any interest for the month, 24 days in. They told me that I forfeited that when I transferred everything out. AWFUL.
I never thought I’d say this but American Express (https://cashmoneylife.com/american-express-personal-savings-account-review/) is much better. Money transfers on time, better rates, plus, they do not steal your interest money. I have learned from experience, I hope no one else suffers my fate.