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Discover offers competitive interest rates and skips several common fees charged by most brick-and-mortar and even many online banks. It also offers some unique accounts, like its cash back checking account and CDs with terms up to 10 years. Plus, the bank has a strong reputation for excellent customer service and one of the best mobile apps for an online bank.
Discover® Bank accounts | The Ascent's star rating (out of 5) |
---|---|
Discover® Bank | 4.50 |
Discover® Cashback Debit | 5.00 |
Discover® Online Savings | 4.00 |
Discover® Money Market | 4.50 |
Our methodology for scoring banks and credit unions revolves around evaluating key aspects such as annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks.
These criteria are weighted differently across various account types, ensuring a comprehensive assessment that reflects the competitive landscape and economic conditions.
We strictly feature products that offer federal insurance and high customer satisfaction, keeping our recommendations unbiased by advertiser influence. This robust evaluation process helps us generate balanced, reliable best-of lists that guide consumers to top financial products.
Learn more about how The Motley Fool Ascent rates bank accounts.
The terms on Discover® Bank CDs range from three months to 10 years. It's rare to see CD terms longer than five years, so Discover is worth considering if you're interested in CDs or building a CD ladder with longer terms. Rates vary depending on term length, but they are generally competitive.
The biggest downside to Discover® Bank CDs is that they have a higher minimum deposit than competitors' best CDs. To get started, you'll need a minimum of $2,500 to deposit. This could make it cost-prohibitive for people with smaller balances to open CDs with Discover, particularly those who want to do a CD ladder because the minimum requirement applies to each CD you open.
APY = Annual Percentage Yield
Discover has a higher minimum balance requirement than some of its competitors, but its rates are competitive and you don't have to worry about getting hit with any fees unless you withdraw funds via wire transfer or choose to withdraw from your CD before it reaches its maturity date. It also offers some unique term lengths, including CDs as short as three months and as long as 10 years.
3 Mo. APY | 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 30 Mo. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY | 7 Yr. APY | 10 Yr. APY |
---|---|---|---|---|---|---|---|---|---|---|---|
2.00% | 4.25% | 4.25% | 4.70% | 4.40% | 4.00% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Bank & CD Offer | APY | Term | Min. Deposit | Next Steps |
---|---|---|---|---|
Member FDIC.
| APY: 4.70% | Term: 1 Year | Min. Deposit: $2,500 | |
APY: 5.05% | Term: 1 Year | Min. Deposit: $1 | ||
APY: 5.15% | Term: 9 Months | Min. Deposit: $1 | ||
Member FDIC.
| APY: 4.75% | Term: 1 Year | Min. Deposit: $500 |
The Discover® Cashback Debit account is an interesting departure from traditional interest-bearing checking accounts.
There are no rewards for having large sums in your account, but you'll earn 1% cash back on every debit card purchase up to $3,000 of monthly spending, just like you would with a cash back credit card. This means you can earn as much as $360 in cash back per year if you max out your cash back, regardless of how much money you typically keep in your checking account at any given time.
The account has no monthly maintenance fee and charges few other fees. Discover partners with a nationwide ATM network to give its customers access to over 60,000 fee-free ATMs using the included debit card and the account also includes check-writing capabilities (even checks are free -- a rarity among checking accounts) and online and mobile account management tools.
Discover® Cashback Debit
Offer alert
The Discover Cashback Debit account could be a lucrative option for those who frequently use their debit card. With cash back on eligible purchases, it's possible to earn even more than you could with a typical checking account APY without changing your habits at all. The fact that Discover has done away with many common checking account fees only adds to its appeal.
We recommend comparing checking accounts to make sure you're getting the best fit for you. Here's a list of our favorite accounts.
The Discover® Online Savings account comes with a competitive 4.25% APY that is consistently among the best. This account doesn't include a debit card or check-writing capabilities like the Discover® Money Market account, but it does include online and mobile account management tools, including mobile check deposit. And although you don't exactly get a checkbook, you can request official bank checks mailed to you for free.
The account doesn't have a minimum balance requirement, and Discover prides itself on its no-fee policy. You won't pay anything to own this account, nor will you pay other common bank fees, like stop payment fees, insufficient funds fees, or excessive withdrawal fees. The only fee you might encounter is a $30 fee for outgoing wires, which is pretty standard in the banking industry.
Discover® Online Savings
The Discover® Online Savings account promises customers an above-average interest rate and few limitations. Most people won't ever encounter fees with this account, and you won't have to worry about keeping track of your monthly withdrawals either.
Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.
Discover® Bank earned the second-highest rating in the 2023 J.D. Power Direct Banking Satisfaction Study and an A+ rating with the Better Business Bureau. Only a handful of banks receive ratings this high, indicating that most customers are happy with the quality of Discover's service.
This isn't to say the bank hasn't received its fair share of complaints. As a large financial institution, this is inevitable. But the fact that it maintains such high ratings anyway is a good sign that it is able to resolve most issues promptly.
Relationship benefits, including maintenance fee waivers and higher APYs on deposit accounts, are a common way for brick-and-mortar banks to draw in new customers, but they're less common among online banks like Discover® Bank because they rarely charge maintenance fees and offer high APYs already.
Discover offers its best rates to all of its customers and doesn't require them to open multiple accounts or keep a certain amount in the bank to earn the highest APY, so it's a great fit for those with smaller balances who still want to earn competitive rates.
Capital One is another credit card issuer that's gotten into personal banking, and it's also received favorable reviews from customers. Both banks offer high APYs on deposit accounts and charge minimal fees. A key difference between the two is that Capital One offers a conventional interest-bearing checking account, which may better suit customers who rarely use their debit cards. Plus, Capital One has an extensive branch network, and therefore could be a better choice for people who occasionally want to deposit cash or need in-person help.
Ally Bank is a highly rated online bank that offers a comprehensive suite of banking products ideal for those who want to manage their money all in one place. Because it has no branches, it's able to offer high APYs on its accounts and charge no monthly maintenance fees. Customers interested in rarer types of CDs will likely find that Ally suits them better, and the bank offers an interest-bearing checking account as well.
Discover® Bank is right for you if:
Yes, Discover® Bank is a real bank. Many consumers think of Discover as just a credit card issuer, but it is actually an FDIC-insured financial institution. In addition to its well-known credit card products, Discover offers checking accounts, savings accounts, money market accounts, and CDs, as well as several types of installment loans.
No, Discover® Bank is an entirely online financial institution. While it offers a variety of traditional banking products, Discover provides customer service online and partners with a large ATM network for when customers need to access or deposit cash.
Our Banking Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.