When it comes to your money, you want the best of the best. That’s why so many people choose Discover Bank as their go-to choice for online banking.With its award-winning customer service and a plethora of features, Discover has become one of the most popular bands around.
In this review, we’ll take a look at everything that makes Discover shine – from its interest rates to its mobile app – and see if it’s the right pick for you.
So whether you’re just starting out with savings or are looking for a new checking account, read on to find out more about Discover Bank!
About Discover Bank
Discover Bank is a wholly-owned subsidiary of Discover Financial Services, a publicly-traded company. Discover was founded in 1985 as the first direct-to-consumer credit card company in the United States. It has since expanded its offerings to include banking, loans, and investment products.
Today, Discover is one of the largest issuers of credit cards globally, and its banking products are offered in all 50 states.
Discover Bank is a full-service online bank, as well as a lender. It offers banking and retirement solutions for individuals and loans for personal, student, and home equity purposes.
Because it is strictly an online bank, Discover doesn’t have local branches that customers can visit in person for banking needs.
However, that doesn’t mean they aren’t accessible – Discover is known for its superb customer service, which is available 24 hours a day.
So till now, Discover Bank has been a great online bank with wonderful 24/7 customer service.
Let’s see if the products they offer measure up to that high standard!
1. Savings accounts
Discover Online Savings Account is competitive savings account with an interest rate of 0.50%. The interest rates are fixed, and you can earn up to $50 annually on your first $10,000 in your account. Discover Bank offers no fees for online savings accounts. There is also no minimum deposit required to open the account and no monthly service fees.
The Discover Online Savings Account is a great account option if you’re looking for a high yield savings account with no fees. The interest rate is lower than what you would find at some other banks, but there are no fees associated with the account, which can add up over time.
Features of the account include:
- No monthly service fees
- No minimum deposit is required to open the account
- Earn up to $50 annually on your first $10,000 in your account
- Free official bank checks
- No charge for returned deposits or insufficient funds
Pros and cons of Discover Online Savings Account
- Interest is compounded daily: This means that you earn interest on the balance in your account each day.
- No monthly service fees: This is a great perk, especially if you’re looking to keep your account open for a long time.
- Competitive APY: This account’s interest rate is competitive compared to other banks.
- No minimum opening deposit: This is a great feature for people starting with savings who don’t have much money to deposit initially.
- No balance requirements: You don’t have to keep a certain balance in your account to earn the interest rate.
- The interest rates are not as high as some other banks: If you’re looking for a high yield savings account, this might not be the best option for you.
- ATM card isn’t available: You can’t withdraw money from an ATM with your Discover Online Savings Account.
Let’s compare Discover Bank’s products with other banks
When you’re looking for a bank, it’s important to compare the different products that each bank offers. Here is a comparison of Discover Bank’s products with other popular banks.
2. Checking accounts
Discover Bank offers a perfect checking account for those who want a no-fee account with no minimum balance requirement. The account also doesn’t charge any monthly service fees.
Discover checking account is known as the Cashback Debit account. This account offers 1% cash back on up to $3,000 in debit card purchases each month.
There is no annual fee for the Cashback Debit account, and you can also use your card at 60,000 ATMs in the U.S through the Allpoint and MoneyPass networks without being charged a fee.
Features of the account include:
- No monthly service fees
- 1% cashback on up to $3,000 in debit card purchases each month
- No annual fee
- No insufficient funds fees
- You can freeze your debit card to reduce fraud.
- Zelle- send or receive money from friends and family.
- 60,000 ATMs in the U.S. through the Allpoint and MoneyPass networks without being charged a fee
One thing about this is that the Bank does not charge for Overdraft Protection Transfer Fee. However, it will charge you a $30 fee for sending an outgoing wire transfer.
The Discover Cashback Debit account is a great option for those who don’t want to jump through many hoops to avoid fees.
Let’s see a detailed Pros and Cons of Discover Bank’s Cashback Debit account:
- 1% cashback on up to $3,000 in debit card purchases each month: This is a great perk, especially if you use your debit card for most of your assets.
- No minimum opening deposit: This is a great feature for people starting with checking and who don’t have much money to deposit initially.
- No balance requirements: You don’t have to keep a certain balance in your account to earn the interest rate.
- Surcharge-free ATMs: You can use your card at 60,000 ATMs in the U.S through the Allpoint and MoneyPass networks without being charged a fee.
- The account is not interest-bearing: This means that you won’t earn any interest on your account balance.
- Check deposits greater than $200 require more than two businesses: This can be a hassle if you make frequent deposits over $200.
Is Discover Checking a Better Alternative to Other Options?
Discover Bank’s Cashback Debit account is a great option for those who don’t want to jump through many hoops to avoid fees. Let’s see if it’s a better alternative to other options:
3. Discover Certificate of Deposit (CD)
Discover CDs are a great way to save money and earn interest on your deposited funds. They offer a variety of terms, so you can choose the one that best suits your needs.
You’ll also enjoy the peace of mind that comes with knowing your deposited funds are safe and insured by the FDIC.
Discover CDs offer a variety of terms, which is great for people who are looking for different options. You can choose a CD with a term ranging from 3 months to 10 years and an interest rate that is fixed for the entire term.
The minimum opening deposit for a Discover CD is $2,500.The longer the term you choose, the higher the interest rate you’ll earn on yours.
Here are quick overview of Discover Interest rate.
Discover Bank CD Rates as on 06.03.2022
However, if you withdraw before the end of the term, you’ll incur a penalty. Here are the penalties for Discover CDs:
|Discover Bank CD Early Withdrawal Penalties as on 06.03.2022|
|Term||Early Withdrawal Fee|
|Less than 1 year||3 months simple interest|
|1 year to less than 4 years||6 months simple interest|
|4 years to less than 5 years||9 months simple interest|
|5 years to less than 7 years||18 months simple interest|
|7 years to less than 10 years||24 months simple interest|
Features of Discover CDs include:
- You can lock in a guaranteed rate for an extended period: This is great for those who want to know their interest rate for a set period.
- The FDIC ensures your deposited funds: This means that you don’t have to worry about your money not being there when you need it.
- No monthly service fees: You don’t have to worry about any hidden fees with a Discover CD.
- Interest is compounded daily: This means that you’ll earn interest on the accrued interest.
Now, let’s check the pros and cons of Discover Bank’s Certificate of Deposit:
- Competitive yields: Discover CDs offer a competitive yield compared to other banks.
- Various terms: You can choose a CD with a term ranging from 3 months to 10 years.
- Interest is compounded daily: This means you’ll earn interest on the accrued interest.
- If you withdraw before the end of the term, you’ll incur a penalty: This means you could lose some of the money you’ve earned if you need to access your funds before the CD matures.
- The minimum opening deposit is $2,500: This may be a deterrent for people who don’t have a lot of money to deposit initially.
- You must have a savings account with Discover to open a CD: This could be a hassle for some people.
Now that we’ve looked at the pros and cons of Discover Bank’s Certificate of Deposit, let’s see which one is a better option for you, through the following comparison:
4. Money Market Account
Discover Bank Money Market Account offers 0.40% APY on balances up to $100,000 and 0.45% APY on balances over $100,000. There are no monthly fees or minimum balance requirements, making it easy to keep your account funded without any extra work.
|Balance >$100,000||0.45% APY|
|Balance <$100,000||0.40% APY|
With no monthly fees or minimum balance requirements, it’s easy to keep your account funded without any extra work. Discover also offers a wide variety of features, including a debit card, ATM access, and check-writing capabilities. So if you need to access your funds quickly, you’ll be able to do so without any trouble.
Plus, Discover Bank has more than 60,000 fee-free ATMs, so you’ll be able to access your money without paying any extra charges. And if you ever find yourself in a bind and need to overdraw your account, Discover won’t charge you insufficient funds fees.
However, there are a few things to keep in mind, you need to deposit $2,500 to open the account and limit certain types of withdrawals to six per month, so if you’re looking for a more flexible account, Discover Bank might not be the best option for you.
Now, let’s take a look at some of the pros and cons of Discover Bank.
- No monthly fees or minimum balance requirements
- Wide variety of features, including ATM access, debit card, and check writing
- More than 60,000 fee-free ATMs
- Won’t charge you for insufficient funds
- Above national average interest rate.
- It includes check-writing capabilities as well as the ability to get free checks.
- You need to deposit $2,500 to open the account
- Limit certain types of withdrawals to six per month.
- Better interest rates can be found at other banks.
Overall, Discover Bank is a great option for those looking for a high-yield money market account. With no monthly fees or minimum balance requirements, it’s easy to keep your account funded and access your money when you need it.
5. Discover IRA CDs
Discover Bank offers IRA CDs in two different types: Roth IRA CDs and Traditional IRA CDs. Roth IRA CDs are funded with after-tax money, and the contributions aren’t tax-deductible.
However, the earnings are tax-free, and contributions can be withdrawn at any time without IRS penalty.
Traditional IRA CDs are set up differently. They are funded with pre-tax money, and the earnings are tax-deferred. Contributions can be tax-deductible up to specific limits, and funds can’t be withdrawn without a penalty until age 59½.
IRA CDs through Discover can be funded with either after-tax or pre-tax dollars, so it’s a great option for those looking for flexibility.
6. Discover bank credit card
Discover credit cards come with several features and benefits, including no annual fees, bonus rewards, and 0% APR introductory rates. There are a variety of cards to choose from, including the Discover it Miles card, the Discover it Student card, and the Discover it Chrome card.
These cards are all issued by Discover Bank, a division of Discover Financial Services.
Discover does not require you to be a customer of Online Banking to apply for a credit card. Being an Online Bank-holder does not provide you access to these cards any differently than it would if you weren’t one.
Some of the best features of Discover credit cards include:
- No annual fees
- Bonus rewards for spending in certain categories, such as travel, dining, and gas
- 0% APR introductory rates on new purchases and balance transfers for a set amount of time
If you’re looking for a card with no annual fees, bonus rewards, or a great introductory rate, Discover has you covered.
7. Other Financial Services Offered by Discover
Discover also offers a variety of other financial services, including:
- A variety of mortgage products, including fixed-rate, adjustable-rate, and jumbo mortgages
- Auto loans and home equity loans
- Credit monitoring and identity theft protection
- Debt consolidation
- Refinanced mortgages
- Personal loans
- Student loans
Discover Bank Promotions
Discover Bank often has promotions for new customers. Right now, you can get a bonus of up to $200 when you apply for your first Discover Online Savings Account. This account offers a great interest rate and no monthly fees or minimums.
Alternative Banking Options
Let’s face it, over the past few years, and the traditional banking industry has not been very consumer-friendly. Fees have been increasing while interest rates on deposits have been dropping. If you’re looking for a bank that offers great rates and doesn’t have a lot of fees, Discover Bank is a great option.
But what if you’re not comfortable with a Discover bank? Don’t worry; there are plenty of other great banking options available. Chase and Bank of America are two good choices if you’re looking for a traditional bank. Ally Bank is a great option if you’re looking for an online-only bank.
Let’s compare Ally Bank and Discover Bank.
Discover Bank Vs. Ally Bank
Ally Bank is a great online-only bank that offers high-yield savings and checking products, no monthly fees or minimums, and top-yielding CDs. Let’s make a head-to-head comparison of Ally Bank and Discover Bank:
Ally Bank offers a 0.50% APY on their savings account, while Discover Bank offers a 0.50% APY, so both banks offer the same interest rate.
Ally Bank offers a 0.10% APY for daily balances less than $15,000. 0.25% APY for daily balances over $15,000, while Discover Bank does not provide an interest rate on their checking account.
Ally Bank offers a 0.15% to 0.80% APY. Terms of 3 months to 5 years. 12-month CD APY of 0.55%, while Discover Bank offers 0.20% to 1.00% APY. Terms of 3 months to 10 years. 12-month CD APY of 0.55%.
Both are available for online banking only.
In the head-to-head comparison of Ally Bank and Discover Bank. Both banks offer high-yield savings and checking products, no monthly fees or minimums, and top-yielding CDs.
The only difference is that Ally Bank offers an interest rate on their checking account, while Discover Bank does not.
So, if you’re looking for a checking account that offers interest, Ally Bank is the better choice. Otherwise, Discover Bank is a great option as well.
Discover Bank Customer Reviews
You can find customer reviews of Discover Bank on websites like TrustPilot, Consumer Affairs, and BBB. However, it’s important to note that not all reviews are accurate.
So, I have taken the time to read through some of the reviews and have summarized what customers are saying.
You can also find customer reviews of Discover Bank on Reddit. I have taken the time to read through some of the thoughts and have summarized what customers are saying.
Most of the negative reviews are from customers who had difficulty opening an account or transferring money to and from their external bank account.
One customer said, “Their app doesn’t have that option. Every time I tried to add one on the website it either crashed, timed out, or claimed to have sent me a verification code that I never once received.”
Another customer said, “I got so fed up that I closed the account.”
The majority of the positive reviews are from customers who are happy with the interest rates and have no monthly fees on their accounts and Credit Cards.
One customer said, “Their UI seems to have the most polished UI IMO and I like their new ‘buckets’ feature.”
Another customer said, “Capital One’s UI and layout feels dated/clunky but it gets the job done.”
App Store review
The Discover Bank app has a 4.9 rating on the App Store, and on Android, it has a 4.6 rating.
Most of the reviews are positive, with users stating that the app is easy to use and navigate.
One user said, “I signed up for an account and within minutes had deposited money from my checking account into my Discover savings account.”
Another user said, “Touch ID and Face ID work great. The Quick View feature is really handy for looking at account balances without having to log in.”
So, overall, the Discover Bank app has a good rating, and most users seem to be happy with it.
Pros & Cons Explained
- 1% cashback bonus: If you’re looking for a credit card that offers a cash-back bonus, Discover is a great option. They offer a 1% cash back bonus on all purchases. However, cashback is limited to $3,000 in purchases each year.
- No fees: Discover does not charge any fees for their products, which is great news for consumers.
- Large ATM network: You can withdraw money from over 60,000 ATMs nationwide without fees.
- No minimum deposit: You don’t have to worry about meeting a minimum deposit requirement to open an account with Discover Bank.
- No interest on checking account: Unlike Ally Bank, Discover Bank does not offer an interest rate on their checking account.
- Only available online: Discover Bank is not the right choice if you’re looking for a bank that you can go into a physical location to do your banking. It’s only available online.
Who Is Best For Discover Online Banking?
Discover Online Banking is best for people looking for a bank that has no monthly fees and offers a high-yield savings account.
The interest rates that Discover offers are also very competitive, so they’re a good option for people who are looking to earn interest on their money and Typically use their debit card frequently.
Additionally, the customer service is excellent, which is why Discover Bank is a popular choice for online banking.
Discover Bank Customer Service
Discover Bank has excellent customer service, with knowledgeable and helpful representatives.
If you have any questions or problems, you can contact customer service by phone, email, or chat. They are available 24/7, so you can get help whenever you need it.
According to the J.D. Power 2021 U.S. Credit Card Satisfaction Study, Discover Bank second-highest-ranking credit card company in customer service.
The only credit card company that ranks higher than Discover is American Express.
How to Open an account with Discover Bank?
To open an account online, you’ll need to provide personal information, including your name, address, Social Security number, and date of birth. You’ll also need to provide banking information, including your routing number and account number.
It’s important to note that you must be at least 18 years old to open an account with Discover Bank.
If you’re starting an individual account, such as a trust account, there’s an easy online portal where you can securely submit the necessary papers.
Final Thought: Is It Worth It?
Discover Bank Review 2022:Why it's not just an online bank?
So, what do you think? Have we convinced you that Discover Bank is worth a closer look for your online banking needs? The benefits are clear - from the high APYs on their CDs to the lack of annual fees on their credit cards.
And if you’re looking for a bank with no physical branches, Discover is one of the best options around. Of course, everyone’s banking needs are different, so be sure to check out our full review and compare it to your current Bank before making any decisions.
But if you like what you see here, please share this article with your friends and family, who might also benefit from switching to Discover Bank!
Frequently Asked Questions
Here are some of the most commonly asked questions about Discover Bank:
How does Discover Bank compare to other online banks?
Discover Bank is one of the best online banks around, thanks to their high APYs on savings and checking accounts, lack of fees, and excellent customer service. However, it’s important to compare them to other online banks to see if they offer the best rates and terms for you.
What are the minimum requirements to open an account with Discover Bank?
To open an account with Discover Bank, you must be at least 18 years old and have a valid Social Security number. You’ll also need to provide banking information, including your routing number and account number.
Can I open an account with Discover Bank if I’m not a U.S. citizen?
At this time, Discover Bank only offers services to U.S. citizens. However, they are exploring ways to provide their services to non-U.S. citizens in the future.
What is the minimum deposit amount for a Discover Bank CD?
The minimum deposit amount for a Discover Bank CD is $2,500. However, you may be able to find CDs with a lower minimum deposit if you’re looking for a shorter term.
Are there any fees associated with using my Discover Bank debit card?
There are no monthly fees or transaction fees associated with using a Discover Bank debit card. However, you may be charged a fee if you use your card to purchase a foreign currency.
Do I need a checking account with Discover Bank to get a debit card?
You do not need to have a checking account with Discover Bank to get a debit card. You can open a Discover Bank savings account and receive a debit card without opening a checking account.
Can you deposit cash into your Discover Bank account?
No, you cannot deposit cash into your Discover Bank account. However, you can easily deposit funds into your account by transferring money from another bank account.
Does Discover offer any loans?
Yes, Discover offers a variety of loans, including personal loans, home equity loans, and student loans. You can learn more about their loan products on their website.
Is Discover Bank FDIC insured?
Discover Bank is FDIC insured, meaning your deposits are insured up to $250,000. The FDIC backs this coverage, so you can ensure your money is safe if something happens to Discover Bank.
Is Discover Bank a real bank?
Discover Bank is a real bank. It’s one of the largest banks in the United States, and it’s FDIC insured, meaning your deposits are insured up to $250,000.
How long do I have to wait to get my Discover Bank debit card?
Once you’ve been approved for a Discover Bank account, you should receive your debit card within 7-10 business days. You can use your debit card immediately once you receive it.
Is Discover a good online bank?
Discover is a good online bank because it has high APYs on savings and checking accounts, a lack of fees, and excellent customer service. However, it’s important to compare them to other online banks to see if they offer the best rates and terms for you.
Can I close my Discover Bank account if I’m not happy with it?
Yes, you can close your Discover Bank account at any time if you’re not happy with it. Just be sure to contact customer service to request a closure.
Who is Discover Bank owned by?
Discover Bank is owned by Discover Financial Services, a publicly-traded company. You can learn more about Discover Financial Services on their website.
Are there any Discover Bank branches?
At this time, Discover Bank does not have any physical branches. All of their banking services are offered online or over the phone.
How is Discover Bank different from other online banks?
Discover Bank is different from other online banks because they offer high APYs on savings and checking accounts, a lack of fees, and excellent customer service. However, it’s important to compare them to other online banks to see if they offer the best rates and terms for you.