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This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.

Discover Bank

Andrew Omalley Andrew Omalley Last update:

Overview

Discover Bank started its life as a credit card company, beginning its operations in 1985. It took about 15 years before it opened in a banking branch. These days, it offers extensive online banking services to its customers, as well as having nearly 50 million cardholders in the US.

Discover Bank has a reputation for low fees, good access to ATMs nationwide, and a variety of account options. This Discover Bank review will cover all of the company’s core offerings.

Promotions

  • 60,000+ no-fee ATMs across the United States
  • No account fees
  • Caters to every state

Discover Account Types

There are a number of useful account options available to you with Discover Bank. These cover checking, savings, and retirement-related accounts. You can learn a bit more about each option through this Discover Bank online account review.

Checking Account

The Discover Cashback Debit account allows you to get some incredible rates while managing your day-to-day expenses. There are no fees or minimum required deposit whatsoever attached to this option, which in itself is a major drawing point.

You will get a debit card that provides you with 1% cashback on a monthly basis for your first $3,000 worth of purchases. There are also more than 60,000 no-fee ATMs across the United States where you can use your Discover Bank debit card.

Account Type Key Features
Checking Account 1% cash back on debit card
No account fees
60,000+ no-fee ATMs

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Online Savings Account

Discover Bank offers an APY of 0.40% for its online savings account customers. This is significantly greater than the average market rates during these low-interest rate times. The interest will compound on a daily basis, as opposed to on a monthly basis as is the case with most competitors. Finally, there are no fees associated with using this account.

Account Type Key Features
Online Savings Account No minimum deposit
0.40% APY
No account fees

Certificate of Deposit Account

The certificate of a deposit account at Discover Bank allows you to get guaranteed returns. You can choose from a variety of term lengths, including 12 months (0.50% APY), 24 months (0.50% APY), and 5 years (0.60% APY) terms. While there are no fees attached to this option if you stay the term, there will be penalties for early withdrawals.

Account Type Key Features
Certificate of Deposit Account Guaranteed returns
Rates improve over longer periods
No account fees

Money Market Account

Through our Discover Bank Money Markets Account review, we found that it allows you to have flexibility over your spending while still earning interest on your money. For a balance below $100,000 (account minimum is $2,500), you will earn a 0.30% APY, with this rising to a 0.35% APY for larger sums. Once again, no fees are attached to this account. You will be able to withdraw cash from ATMs, as well as get a debit card and/or checkbook with this offering.

Account Type Key Features
Money Market Account Better APY for bigger balances
Minimum balance of $2,500
Flexible account option

IRA Certificate of Deposit Account

This type of account provides you with a guaranteed return on your money when saving for retirement. There is an account minimum of $2,500 in place. For a 12-month or 24-month term, you will get 0.50% APY, with this rising to 0.60% for a five-year duration.

Account Type Key Features
IRA Certificate of Deposit Account Guaranteed return
APY increases over time
$2,500 account minimum

IRA Savings Account

The IRA savings account proves you with a 0.40% APY, giving you the flexibility of combining online savings with IRA tax advantages. There are no fees associated with this type of account unless you are looking to make an early withdrawal.

Account Type Key Features
IRA Savings Account No fees
0.40% APY
Tax-efficient

Discover Bank APY

When it comes to Discover Bank, there are differing APY rates on offer depending on what account you are looking at and what term you are considering. Here is a look at the APY rates for a couple of different account types:

Account 1 Year 3 Years 5 Years
Online Savings Account 0.40% 0.40% 0.40%
Certificate of Deposit Account 0.50% 0.55% 0.60%
Money Market Account 0.30% (Balance <$100,000) 0.30% (Balance <$100,000) 0.30% (Balance <$100,000)
IRA Certificate of Deposit Account 0.50% 0.55% 0.60%
IRA Savings Account 0.40% 0.40% 0.40%

What is a Discover Bank account best for?

While there are a number of different types of Discover Bank accounts for you to choose from, there are some commonalities that span across the various offerings. They are all ideal for those people who are looking to pay minimal fees. With the major Discover Bank accounts, you have little to no fees to consider, which is a departure from the business model of many other leading banks.

Taking the checking account as an example, there are no monthly maintenance bank fees you need to pay and you have access to more than 60,000 no-fee ATMs around the country. You even get 1% cash back on debit card purchases of up to $3,000 each month. Therefore, you get a great bang for your buck when using a Discover Bank account.

 

Opening an account at Discover Bank

As Discover Bank is an online-focused operation you will find that the process of opening an account is streamlined and very easy to complete. It offers you the ability to complete the registration process either through your desktop computer or directly through its mobile offering.

There are three main steps required of you to get started with Discover Bank. You firstly need to provide some basic information, such as your full name, address, and Social Security number.

Once all of this information has been entered and you have selected the type of account you want to open, you will have the chance to immediately deposit funds or you can do so at a later point in time. You have the option to transfer money from another bank or to send a check via mail to Discover Bank.

You will receive a confirmation email regarding your new account registration, with your checkbook or debit card taking a few days to arrive at your address by mail if you have ordered them.

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Pros and Cons

Just like with any bank, there are pros and cons associated with using Discover Bank. The main positives are very clear for anyone to see. Discover Bank offers one of the best selections of low-cost accounts on the market today.

This being an online banking specialist, it attracts new customers through this low-cost model. This means that you are not having to pay monthly account maintenance fees or ATM fees. In the long run, this can save you significant money and that’s not even considering the 1% cashback offer in place with the checking account.

Another advantage of using Discover Bank is that it covers all of the bases you could really need with a bank. There is a good checking account, as well as multiple savings and retirement-related accounts to check out. Finally, the savings rates offered across Discover Bank’s various products are some of the best around, comfortably beating many major banks in this regard.

For those people who prefer having the option of physical banking, this is currently not something that Discover Bank offers due to its lack of physical branches. Therefore, if you prefer to conduct a matter in person, you might want to look elsewhere.

Another potential drawback could be the $2,500 minimum necessary deposit to open a money market account or certificate of deposit account at Discover Bank. This could be a larger minimum than many beginner savers might be able to afford. Finally, there will be no reimbursement of fees if you decide to use an ATM that is out-of-network.

Pros Cons
Great selection of account types No physical branches
Low-cost account options The $2,500 minimum for CDs might be a bit high
Savings account APY rates are top-tier No reimbursement of fees after using an out-of-network ATM

Comparison to similar bank accounts

 

Discover Bank Bank of America TD Bank
Link to review  Link to review 
APY: Up to 0.40% (Online Savings Account) APY: Up to 0.05% (BOA Advantage Savings) APY: Up to 0.15% (TD Beyond Savings)
Minimum balance: $0 Minimum balance: $100 Minimum balance: $0
Benefits:

  • Amazing APY Rates.
  • Low-cost account options.
  • Various account options.
Benefits:

  • Thousands of branches.
  • Easily avoid monthly fees.
  • Low min required opening deposits.
Benefits:

  • No min required account balance.
  • Option for in-person banking.
  • Good selection of accounts.

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Disclaimer: FDIC deposit insurance is $250,000 per depositor, per deposit ownership category. The FDIC provides separate insurance coverage for funds that depositors may have in different categories of legal ownership. The FDIC refers to these different categories as ownership categories.

Disclosure
This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.
Andrew Omalley Andrew Omalley
Andrew is a freelance writer who has been crafting valuable pieces of content relating to personal finance for more than five years. Previously, he studied Economics & Finance at university and he has professional qualifications relating to financial advice.
This review is based on the writer's personal opinion.