Discover Bank Review 2021

Published January 2021 by Matthew Goldberg

AT A GLANCE
4.6

Bankrate Score

bank-logo

Free Checking

No monthly fees

Discover Bank is a great option for consumers hoping to manage their credit cards and bank accounts in one place.

  • Savings
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    4.4
  • CDs
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    4.2
  • Checking
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    5.0
  • MMAs
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    4.3
  • MORE HIGH-YIELD OPTIONS
    MORE HIGH-YIELD OPTIONS
    Goldman Sachs Bank USA

    Member FDIC

    Savings account

    0.50 % APY

    $ 0

    Min. balance for APY

    American Express National Bank

    Member FDIC

    Savings account

    0.50 % APY

    $ 1

    Min. balance for APY

    Axos Bank

    Member FDIC

    Checking account

    1.25 % APY

    $ 50

    To open

    $ 0

    To avoid fees

    Overall

    4.6

    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.

    • Discover’s rewards 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

    4.4

    Bankrate Score

    OTHER SAVINGS OFFERS YOU MAY LIKE
    Goldman Sachs Bank USA

    Member FDIC

    Savings account

    0.50 % 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

    • No opening deposit is needed.

    • There are no fees for official bank checks, excessive withdrawals or for insufficient funds.

    • 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 online banks.

    CD rates

    4.2

    Bankrate Score

    Discover Bank offers 12 terms of 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.

    Discover Bank doesn’t offer no-penalty CDs. It does offer IRA CDs.

    What we like

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

    What we don't

    • The $2,500 minimum deposit requirement is higher than it is at some online banks offering higher yields.

    • Discover Bank doesn’t have CD specials or non-traditional products, such as a no-penalty CD.

    Checking accounts

    5.0

    Bankrate Score

    OTHER CHECKING OFFERS YOU MAY LIKE
    Axos Bank

    Member FDIC

    Checking account

    1.25 % APY

    $ 50

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

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

    Discover Bank has a network of 60,000 ATMs in the U.S. That should make it easier to avoid ATM fees. In October 2019, Discover Bank brought Zelle to its accounts. This allows Discover Bank customers to send money to others.

    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

    4.3

    Bankrate Score

    In addition to its online savings account, Discover Bank offers a money market account. You’ll need at least $2,500 to open up this 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. That’s because a money market account balance of $100,000 or more at Discover Bank may earn you a slightly higher APY.

    Discover Bank customers can access surcharge-free ATMs through the Allpoint and MoneyPass networks.

    What we like

    • The Discover Bank money market account has check-writing privileges.

    • Discover Bank’s money market account doesn’t have a monthly fee.

    • The money market account’s debit card can be used for ATM withdrawals.

    • There’s no charge to use an ATM outside of its network of at least 60,000 ATMs.

    What we don't

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

    • The $2,500 minimum deposit needed to open an account is 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.

    Discover’s credit cards have a lot to offer as well. None of their credit cards charge an annual fee, making their lucrative rewards programs even more impactful. The best Discover credit card is the Discover it® Cash Back, loved by cardholders for its rotating quarterly bonus categories. Read our full review of the Discover it® Cash Back.

    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.

    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.

    Matthew Goldberg Twitter Created with Sketch. @MATTATBANKRATE

    Matthew Goldberg Twitter Created with Sketch. @MATTATBANKRATE

    Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance. His career includes being a banker in New York City. His reporting career includes working as a staff reporter at two daily newspapers. He earned his first newspaper bylines in 1998. Matthew has been honored by both the Illinois Associated Press Editors Association and the Illinois Press Association. His writing has been featured on MSN, appeared in Sports Illustrated On Campus, The Atlanta Journal-Constitution, The Buffalo News and other publications. He is currently a member of the Board of Governors at the Society for Advancing Business Editing and Writing (SABEW), which is the world's largest and oldest organization of business and financial journalists. He is on the organization’s training and finance committees. He has previously served on conference planning committees and has been a Best in Business contest judge for the organization. Matthew’s radio experience includes being a weekly panelist on the SportsWriter’s show on WGEM AM ESPN 1440 in Quincy, Illinois. He was also an occasional co-host and call-in guest on WGEM SportsCenter. He’s also been a guest on WGN Radio 720 in Chicago, 1080 KRLD Dallas-Fort Worth, 700WLW in Cincinnati, News Radio 610 WTVN in Columbus, Ohio, NewsRadio WINA in Charlottesville, Virginia and other stations. Matthew earned a bachelor’s degree at Illinois State University and an MBA at William Paterson University.