Discover Bank Review 2020

Published March 2020 by Amanda Dixon

AT A GLANCE
4.1
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Bankrate Score

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Free Checking

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No Minimum Balance

No monthly fees

Discover Bank is a great option for consumers hoping to manage their credit cards and bank accounts in one place. You’re better off banking elsewhere, however, if you want wider access to bank branches or deposit accounts with higher yields.

  • Savings
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    4.9
  • CDs
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    4.1
  • Checking
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    3.8
  • MMAs
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    3.8
  • MORE HIGH-YIELD OPTIONS
    MORE HIGH-YIELD OPTIONS
    Goldman Sachs Bank USA

    Member FDIC

    Savings account

    1.70 % APY

    $ 0

    Min. balance for APY

    Goldman Sachs Bank USA

    Member FDIC

    CD

    1.85 % APY

    1 yr

    Term

    $ 500

    Min. deposit

    BMO Harris Bank

    Member FDIC

    CD

    1.85 % APY

    2 yr

    Term

    $ 5,000

    Min. deposit

    Overall

    4.1

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    Bankrate Score

    Discover Bank is an online institution within a financial services company offering various products, including credit cards, personal loans and student loans.

    What we like

    • Discover customers have access to a full suite of financial products and services.

    • Checking account offers cash back when its debit card is used for everyday purchases.

    • Account holders can pay credit card bills and check bank accounts through the same app and website.

    • No monthly fees for keeping any of the bank accounts open.

    What we don't

    • Yields are competitive but low compared with what other online banks offer.

    • Only a couple of brick-and-mortar branches are available.

    • No opportunity to earn interest through the checking account.

    Savings accounts

    4.9

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    OTHER SAVINGS OFFERS YOU MAY LIKE
    Goldman Sachs Bank USA

    Member FDIC

    Savings account

    1.70 % APY

    $ 0

    Min. balance for APY

    The Discover Online Savings Account offers a competitive yield. There's no minimum deposit required to open an account and no minimum balance required to waive a monthly maintenance fee.

    Account holders won't get access to an ATM card, but Discover Bank does offer free official bank checks and expedited delivery for official bank checks.

    What we like

    • The same APY applies to all balances.

    • No deposit is needed when applying for an account.

    • No fees for official bank checks or excessive withdrawals and no insufficient fund fee.

    • There's no maintenance fee.

    What we don't

    • An ATM card isn’t available for Discover Bank's online savings account.

    • There are higher savings APYs available at other banks.

    CD rates

    4.1

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    OTHER CD OFFERS YOU MAY LIKE
    Goldman Sachs Bank USA

    Member FDIC

    CD

    1.85 % APY

    1 yr

    Term

    $ 500

    Min. deposit

    Discover Bank offers traditional CDs with terms ranging from three months to 10 years. The minimum deposit is $2,500. It’s easy to calculate on the bank's website how much interest you’ll earn based on your initial deposit.

    Early withdrawal penalties vary depending on the CD term. The penalty for CDs maturing in one to four years is six months of simple interest.

    What we like

    • Interest is compounded daily.

    • The wide range of terms available makes it easy to ladder CDs.

    What we don't

    • Minimum deposit needed to open account is higher than it is at some online banks offering higher yields.

    • No CD specials or non-traditional products are offered.

    • The grace period for making a decision after your CD matures is nine days, rather than 10.

    Checking accounts

    3.8

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    OTHER CHECKING OFFERS YOU MAY LIKE
    Simple

    Member FDIC

    Checking account

    1.55 % APY

    $ 0

    To open

    $ 0

    To avoid fees

    The Discover Cashback Debit account is a good option for those who don’t want to jump through a lot of hoops to avoid fees. There’s no minimum deposit required to open an account and no minimum balance to avoid monthly fees. The account is not interest-bearing, but Discover Bank offsets that by offering cash back on up to $3,000 in debit card purchases each month.

    This is currently the only checking option offered by Discover Bank.

    What we like

    • No monthly maintenance fee.

    • 1 percent cash back on up to $3,000 in debit card purchases each month.

    • No fee charged by Discover to use out-of-network ATMs.

    What we don't

    • The account is not interest-bearing.

    • It may take up to two business days to access mobile check deposits greater than $200.

    Money market accounts

    3.8

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    In addition to its online savings account, Discover Bank offers a money market account. A debit card is available in addition to free checks. Both your initial order and any check reorders are free of charge. It's also possible to get a free official check and free expedited delivery of that official bank check.

    Super savers benefit the most from the bank's money market account. They earn a higher yield than account holders with low balances.

    What we like

    • Money market account has check-writing privileges.

    • No minimum balance fee.

    • The debit card can be used for ATM withdrawals.

    • No charge to use an ATM outside of its network of 60,000+ ATMs.

    What we don't

    • You need a balance of more than $100,000 in order to earn the top APY.

    • $2,500 minimum deposit needed to open an account, higher than it is at some online banks with higher yields.

    Bank experience

    Discover Bank ranks high in almost all customer experience categories.

    Here, you will have access to more than 60,000 free ATMs nationwide and a mobile app earning positive scores in the App Store and Google Play. The app lets you deposit checks, pay your bills and find out account information without logging in, among other things.

    While it operates only two branches, you can reach bank representatives 24/7 via phone.

    About Discover Bank

    The Discover card made its debut in the mid-1980s when Sears, Roebuck & Co. still offered financial services. Sears’ bank, the Greenwood Trust Co., was later renamed Discover Bank in 2000. It is headquartered in Greenwood, Delaware.

    Discover has grown to become one of the largest credit card issuers in the country. As a retail bank, it offers CDs, checking and money market accounts and a high-yield savings account.

    Amanda Dixon Twitter Created with Sketch. @AMANDAADIXON

    Amanda Dixon Twitter Created with Sketch. @AMANDAADIXON

    Amanda Dixon is a senior banking reporter for Bankrate. Prior to joining Bankrate, she served as a writer and editor for SmartAsset, a New York-based fintech startup. Originally from the metro Atlanta area, she's a University of Georgia alum. She enjoys providing an inside look into what banks and credit unions are up to and offering tips and tricks to help consumers save money and build wealth at every stage of their financial lives. Follow her on Twitter: @amandaadixon.