Several years ago, Vanessa and I opened a credit card with Discover Bank. The excellent customer service and rewards led me to research Discover’s other banking products, including the Discover Bank Online Savings Account. At the time, we were earning very little interest at Bank of America, which is why Discover’s lack of fees and competitive interest rates convinced us to open a new savings account.
As a reminder, a savings account is best suited for short-term financial needs. The money is readily available for withdrawal, but the interest paid will be less than what you can obtain with other asset classes.
If you are looking to build wealth, you should consider investing in other financial assets (such as stocks and bonds) which have outperformed cash accounts over long periods of time. If you’re looking for a place to start, please see my Wealthfront Review.
Discover Bank Online Savings Account Review
Discover Bank offers several different banking, loan, and credit card products, including the popular Discover It® Card. For a detailed comparison of these products, please see my Discover Bank Review.
The online savings account is one of Discover’s best products, offering their highest interest rate and a robust online interface that allows you to easily link other bank accounts. Furthermore, there is no minimum opening deposit, no account balance requirements, and no monthly maintenance fees. Discover is one of the few companies offering a savings account with no financial strings attached.
Discover makes it easy to connect all of your checking and savings accounts through your online dashboard, including any accounts held outside of Discover. This online dashboard makes it easy to push/pull money between accounts, and Discover charges no fees to initiate a transfer between internal or external accounts. Discover recently updated their system and many ACH transfers now complete within two business days.
All online savings accounts, including Discover, impose a maximum limit of six external transfers per statement cycle. You are allowed only six (6) transfers from your Discover savings account to any other bank account. The number of deposits into the Discover Savings Account are not restricted.
If you exceed six external transfers, you will be charged a fee. This transaction limit was created by recent Federal regulations and applies to all online savings accounts (not unique to Discover).
Discover Savings Account Features
The Discover Online Savings Account includes a number of different benefits and perks:
No Monthly Balance Requirements or Maintenance Fees
24/7 (U.S. based) Customer Support: Our interactions with Discover customer support have been pleasant. Most agents are kind, helpful, and speak English well.
1.55% (APY) Current Interest Rate: Interest is compounded daily and credited monthly. This is a highly competitive rate compared to other accounts.
FDIC Insurance up to $250,000: If anything should go wrong with Discover Bank, the federal government insures each account up to $250,000 (per account owner).
Discover Mobile Banking App: Control everything from your smartphone or tablet. You can check your account balance, earned interest, recent account activity, and make transfers directly through the mobile app.
Auto-Saver Transfers: The Discover Savings Account allows you to create automatic transfers from any personal checking account into your savings account each month.
Opening a Discover High Yield Savings Account
Opening the Discover Bank Savings Account is a simple 4-step process which can be completed online in about 15 minutes.
Step 1) Visit the Discover Bank website and input your account information
Step 2) Choose between an individual or joint account and designate your account beneficiary.
Step 3) Fund your new Discover Bank account immediately (or at a later date) via ACH electronic transfer from another bank account, wire transfer, or mobile check deposit. You can also mail a physical check to Discover if desired.
Step 4) Verify your information and electronically sign your application and standard account agreements.
After completing the online application, you’ll be ready to begin using your account and earning interest. Discover will also send you a confirmation email and welcome kit in the mail.