Discover Bank Review 2021: CD Rates, Savings Accounts, & Checking Account

Banking
Updated: 29th Sep 2021
Written by Justin Estes
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Discover Bank is an online bank founded in 1985 with the release of their first credit card, and decades later have become one of the most reputable and Innovative online banks on the market today.

They offer everything from cashback checking accounts to high-yield savings accounts and have a robust selection of home, student, and personal loans with extremely competitive rates.

Find out in this Discover Review whether or not it is the right fit for you.

Discover Bank Overview

Feature(s):Details:
Minimum Deposit:$0 for CDs and Savings Accounts; $2,500 for Money Market and CDs
Online Savings APY:0.40%
Cash Back Checking Rewards Rate:1% Checking Cashback; Up to 5% Cashback on Credit Cards
CD Term Lengths:3-Months up to 10 Years
Products Offered:CDs, Checking, Money Market Accts, & Savings
Year Founded:1985

What is Discover Bank?

Discover Bank started in 1985 as a credit card processing company that was not affiliated with Visa, American Express, or MasterCard.

Over the years, they have added different business lines through acquisitions and mergers, and they are now one of the largest online banks in America.

Discover Bank sets itself apart through its excellent customer service, attractive balance transfer rates, credit building tools, and high-yield savings accounts.

These differentiating factors are largely the reason Discover has become one of the best bank accounts for consumers.

What Does Discover Bank Offer?

Discover Bank offers credit cards, online banking services, personal loans, student loans, at home loans.

They are best known for their rewards, generating credit cards and secured cards that allow customers to build credit and establish a healthy credit score before upgrading to one of their rewards credit cards. They even offer student credit cards!

One of their more interesting offerings is their cashback checking account, which generates cash back instead of earning interest.

Discover Bank Featured Products

Discover Online Savings Account

  • APY: 0.40%
  • Minimum deposit: $0

Discover bank’s online savings account is an extremely versatile and accessible high-yield savings account.

Some banks charge service fees and require minimum balances to enjoy higher yield interest rates than those offered by National Banks, but Discover Bank does not.

Instead, they have no minimum balance requirement, and any account balance gets the full 0.40% APY that is advertised.

To put this in perspective, a balance of $15,000 in this account would earn $60.12 in a year, whereas the national average of 0.01% would generate a mere $1.50 in interest on the same balance.

The Discover online savings account is one of the best choices for consumers looking to generate interest in their savings without needing to lock up their cash in a more rigid account such as a CD or money market account.

>> More: Best High Yield Savings Accounts

Cashback Checking Account

  • Cashback Rewards Rate: 1% cashback on up to $3,000 monthly debit card purchases
  • Minimum deposit: $0

Instead of offering an interest rate, they offer 1% cashback on up to $3,000 in debit card purchases a month which would be $30 in cashback if you were to Max it out.

Not only does Discover Bank offer cashback on this account, but they also do not charge any fees at all on this account.

They have an extensive list of fees that they do not charge to prove their point, including monthly maintenance, ATM withdrawals that are in-network, debit card replacements, stop payment orders, insufficient funds, or account closures.

This fee-free account is compounded by the fact that they do not even charge overdraft fees.

If you overdraft an account that has been linked to a separate funding account, then discover will move the money from that separate account to your checking account so that the charge will go through.

If you have not linked the separate account for overdraft protection, the card will get declined without charging you an overdraft fee.

>> More: Best Checking Accounts

Discover Money Market Account

  • APY: 0.30% for balances under $100,000 and 0.35% for balances over $100,000
  • Minimum Deposit: $2,500

Discover’s money market account is designed to be a solution for consumers who want to earn interest on their deposits but still have access if they need to withdraw cash or spend money from the account.

You can open an account with a $2,500 opening deposit, and if you keep less than $100,000 in the account, you will earn 0.30% interest on the entire balance.

If you have over $100,000 deposited in the account, it will generate a higher interest rate of 0.35%.

Discover Bank extends its fee-free service to money market accounts since they charge $0 for minimum balance fees, replacement debit cards, and stop payment order fees.

On a hypothetical balance of $15,000, over five years, you would have generated $227 in interest while retaining the same spending privileges and check-writing abilities.

Discover Online CD Rates

TermAPY
3 Months:0.20%
6 Months:0.25%
9 Months:0.30%
12 Months:0.50%
18 Months:0.50%
24 Months:0.50%
30 Months:0.55%
3 Year:0.55%
4 Year:0.55%
5 Year:0.60%
7 Year:0.60%
10 Year:0.60%

If you want to open a certificate of deposit, Discover Bank makes it very easy to choose a term that works for your finances the best.

The shortest term for a CD is three months which generates 0.20% in interest, and the highest interest rate caps out at 0.60% for the 5, 7, and 10-year terms.

You can open an account with $2,500, and there’s no limit to how much you can contribute.

To put the interest in perspective, a 12-month CD with an initial deposit of $25,000 would earn $125 in interest over the term.

>> More: Best CD Rates

Discover Bank Review: Fees, Customer Support, & Experience

Banking Experience

Discover Bank consistently ranks as one of the top online banks in the country due to its intuitive mobile app, easy-to-navigate website, and extremely helpful customer service.

Customer Support

A large part of discover bank’s reputation is built on its exceptional customer service.

You can hardly look at any review for this bank without reading about their knowledgeable and friendly customer service representatives.

Discover Bank Fees

Discover Bank plasters its fee-averse attitude all over their marketing and their website.

Credit cards do not have any annual fee, checking accounts do not have overdraft fees or minimum balance fees, and there are no maintenance fees on savings accounts, CDs, or money market accounts.

Discover Bank Pros and Cons

Pros:

  • Excellent credit-building tools with secured credit cards and student credit cards
  • competitive interest rates for savings accounts with no minimum balance
  • wide array of CD terms to choose from ranging from 3 months to 10 years

Cons:

  • other online banks offer higher interest rates on savings accounts if you are willing to pay more for an initial deposit
  • no auto loans available
  • No physical branches if you enjoy in-person banking

How Does Discover Bank Compare to Other Banks? 

#1. Chime Bank vs. Discover Bank

Chime Bank is a Financial Technology company that redefines the way Americans bank with a fee-free experience, robust offerings, and two-day early paychecks.

Currently, Chime offers a credit building credit card, interest bearing savings account, and a no-fee checking account. 

>> More: Chime Review

#2. Axos Bank vs. Discover Bank

Axos Bank offers consumers competitive rates, sweet high-yield savings accounts, and various other financial products to help you make the most of your banking experience.

>> More: Axos Bank Review

#3. Discover Bank vs. Ally Bank

Pioneering online-banking, Ally Bank is best for comprehensive investment accounts and high-yield banking products.

Whether you want to refinance a loan, invest your money, or take advantage of a checking account, Ally Bank is more than capable of helping you reach your goals.

>> More: Ally Bank Review

Discover Bank FAQs

Is Discover a Good Bank?

Discover Bank consistently tops the charts and receives dozens of accolades every year for their customer service, product offerings, and ease of access to their platform.

One of discover bank’s most attractive qualities is its lack of fees and account minimums to enjoy their most popular accounts and credit cards.

Does Discover Bank Have Any Physical Locations?

Aside from its headquarters, Discover Bank does not have any physical locations.

Instead, they are an online-only Bank with an extensive network of ATMs that do not charge any fees, and they are easily accessible through their website, over the phone, or on the mobile app.

Is Discover Bank Online Only?

Yes. Discover Bank is an online-only bank that offers a wide variety cashback checking accounts, high yield savings accounts, money market accounts, and more.

While Discover Bank is online-only, their customer service and accessibility are impeccable.

When it comes to opening an account and getting fair rates on financial products, it is hard to beat Discover Bank.

Bottom Line: Discover Bank Review

Discover Bank has been around for years, and they have continued to evolve and adapt to meet the newest requirements and demands of the financial consumer.

From their evolution from the Diner’s Club to Discover bank to providing higher interest-bearing savings accounts than most National Banks, Discover consistently delivers on new products, clever marketing, and a world-class overall customer experience.

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Justin Estes
Justin Estes
Justin is an experienced personal finance writer, blogger, and author. His background in accounting and finance led to a passion for helping people make the most of their money and matching them with financial products that enhance their lifestyle. When he's not working, he enjoys hiking, playing guitar, and drinking coffee.