Discover Bank Review: Checking, Savings, CDs, and Credit Cards
Last updated on August 11th, 2017
Vanessa and I have been Discover Bank customers for almost six years. We maintain bank accounts and credit cards with Discover because the company continues to emphasize quality customer service while offering generous benefits.
Beyond offering 24/7 customer support (based entirely in the U.S.A), Discover offers competitive interest rates and rewards through a variety of products, including the Discover checking account, savings account, money market account, CDs, and credit cards.
Since acquiring the Greenwood Trust Company in 1985, Discover has grown to be one of the largest financial services firms in the country. Even with the continual growth, the companies dedication to customer service and brand loyalty has resulted in numerous banking and customer satisfaction awards.
Discover Bank functions as an internet bank with only one retail branch located in Delaware. By eliminating the infrastructure and costs associated with physical locations, Discover’s product offerings and deposit rates are highly competitive. Although the bank lacks retail branches, Discover offers its customers access to over 750,000 ATMs worldwide through its Discover and PULSE ATM networks, including more than 400,000 ATMs across the United States.
As an internet bank, Discover’s web-based platform is exceptional. Through the online platform or smartphone application, customers can transfer funds between accounts, pay bills, deposit checks, and monitor account balances. The user interface is well-designed, which makes navigation a breeze.
Discover Bank Checking Account
Discover offers one checking product, the Cashback Checking Account, which includes the following features:
10 cent ($0.10) cash back reward for every debit card swipe, online bill payment, and written check (up to $10 per month).
Easily link and make transfers between other Discover products through your online dashboard.
No account opening fees, monthly maintenance fees, or minimum balance requirements.
Free access to more than 60,000 (no-fee) ATMs across the United States.
There are a few limitations you should be aware of:
The account does not earn interest (but offers cash back as mentioned above)
Only one physical branch location (the headquarter in Greenwood, Delaware)
It’s important to note, the Cashback Checking Account cannot be opened unless a customer maintains another Discover account. If you aren’t yet a Discover customer, you need to first open another product, such as a savings account or credit card, before opening the Discover Checking Account.
The other unique feature offered by Discover is the online transfer system. When you open a Discover account, you create an online dashboard that connects all of your accounts. Discover allows you to connect an unlimited number of external accounts through this dashboard. You can then transfer money between internal and external account for free.
For example, you might maintain a checking account with another bank if you prefer having access to a local branch. You can link your outside checking account to your Discover dashboard and push or pull money between accounts at any time, without paying a dime. As an added bonus, most transfers take only 1-business day to complete.
Discover’s Money Market Account is, in my opinion, the least valuable account offered by Discover. It functions much like the Discover Savings Account but offers less competitive interest rates.
Balances under $100,000 earn just 0.95% APY
Balances over $100,000 earn 1.01% APY
There aren’t any other benefits that distinguish the money market account from the savings account.
Discover Bank Certificate of Deposit (CD)
With a CD, you lend your money to Discover for a predetermined period of time in exchange for monthly interest payments. All Discover CDs require a $2,500 minimum opening deposit to establish the relationship.
Here are the latest CD interest rates, broken down by the required length of deposit.
12-month CD: 1.35% APY
24-month CD: 1.50% APY
36-month CD: 1.60% APY
60-month CD: 2.25% APY
These are highly competitive rates when compared to other banks, but remember that you must maintain the CD until the stated maturity date. If you withdraw your money before the CD matures, there are early withdrawal penalties discussed on the bottom of this page.
Also, note that Discover allows you to hold any of their CDs within an IRA account, which shelters any interest income from taxation.
Discover Bank Credit Cards
Although not directly related to banking, Discover offers several outstanding credit cards that are also managed through Discover’s online dashboard.
The Discover ItCredit Card is one of the best cash back cards available, offering 5% cash back on rotating quarterly categories and 1% cash back on everything else, plus complimentary access to the Discover Deals shopping portal.
Discover is offering a limited-time promotion to double all cash back earned in your first year of card membership. For a detailed discussion, please see my Discover It Credit Card Review.
If you are a college student, the Discover It for Students offers the same generous reward structure plus an ongoing $20 good grade bonus. It’s easily the best student credit card on the market.
Discover it® Miles
Instead of offering 5% cash back in rotating categories, The Discover It Miles offers 1.5% cash back on all purchases.
The Discover It Miles is included in the double cash back promotion, which means that 1.5% cash back becomes 3% following your first year of card ownership.
Discover it® Secured
If you have poor credit, Discover’s Secured Credit Card is a fantastic way to rebuild your credit. The card is eligible for cash back rewards, but more importantly, can be converted into the traditional Discover It mentioned above after 8 months of responsible usage.
Discover Bank Review Summary
Discover is one of the only banks offering 24/7 customer service via phone, email, or social media. Perhaps even more importantly, Discover has remained committed to providing 100% U.S. based support. If you need support for any reason, at any time, you can contact Discover and connect with a representative who speaks English natively.
Beyond excellent customer service, Discover offers a strong lineup of deposit products and credit cards. Specifically, I’m impressed by the competitive interest rates, reasonable fees, and robust online interface that allows you to move money between internal and external accounts (free of charge).
The combination of excellent support and features is difficult to find, which is why Vanessa and I continue choosing Discover for our banking needs.
Discover Bank Review: Checking, Savings, CDs, and Credit Cards
Discover Bank's combination of excellent customer support, competitive interest rates, and unique account features is unmatched by most competitors, which is why Vanessa and I continue choosing Discover for our banking needs.
Ease of Use9.6
Easy, free money transfers between internal/external accounts