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Discover® Bank Review: A Clear Winner With High Rates and Low Fees

Review Updated
Kailey Hagen
Steven Porrello
By: Kailey Hagen
Kailey Hagen
Kailey Hagen
Writer

Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.

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 and  Steven Porrello
Steven Porrello
Steven Porrello
Writer

Steven is a personal finance writer covering topics from mortgages to credit cards to market news. He has written for The Motley Fool Canada, Ramsey Solutions, Nerdwallet, Clever Real Estate, and other major outlets. Steven launched his writing career at the age of four with his first book, "Revenge of the Bad Guys." He currently lives in Portland, Oregon.

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Our Banking Experts

Nathan Alderman
Check IconFact Checked Nathan Alderman
Nathan Alderman
Nathan Alderman
Fact checker

Nathan Alderman has worked with The Motley Fool since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As The Ascent's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.

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Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.
Offer image for
Member FDIC.

Discover® Bank

Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Bottom Line

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.

Pros
  • Few account fees
  • Competitive APYs
  • Rare account types
  • Great customer service
Cons
  • Somewhat high minimum deposit on CDs
  • No interest-bearing checking account

Our Discover® Bank ratings

We gave Discover® Bank a 4.50 out of 5 stars after evaluating annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks.

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.

Checking accounts

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.

Rates as of Jun 28, 2024
Award Icon 2024 Award Winner

Discover® Cashback Debit

Open Account for Discover® Cashback Debit
Member FDIC.
Rating image, 5.00 out of 5 stars.
5.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.00 out of 5 stars.
5.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
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Open Account for Discover® Cashback Debit
Offer alert
Earn 1% cash back on up to $3,000 in debit card purchases each month (see details when you click 'Open Account')
APY
0%
Min. To Earn APY
N/A
  • Cash back rewards on debit cards
  • Early direct deposit
  • No monthly maintenance, NSF, or overdraft fees
  • Great customer service
  • Cash back rewards capped
  • No interest-bearing checking account
  • No physical branches
  • No reimbursement for out-of-network ATMs

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.

Read Full Review

Certificates of deposit

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.

Rates as of June 7, 2024

APY = Annual Percentage Yield

Offer image for Discover® Bank CD
Discover® Bank CD
Bottom Line

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.

MINIMUM DEPOSIT $2,500
Open Account for Discover® Bank CD
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%

Savings accounts

The Discover® Online Savings account comes with a competitive 4.25% APY and no monthly service fee. This account doesn't come with a debit card or check-writing privileges, but it does offer online and mobile account management tools, including mobile check deposit. There's no withdrawal or transfer limit, and you can open an account with as little as $0.01.

Rates as of Jun 28, 2024

Discover® Online Savings

Read Review
Member FDIC.
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
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= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Read Review
APY
4.25%
Min. To Earn APY
$0
  • Competitive APY
  • No account fees
  • Comfort of a well-known brand and reputation
  • 24/7 customer support
  • FDIC insured
  • No ATM access
  • No branch access; online only

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.

Compare savings rates

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.

Account APY Promotion Next Steps
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
New customers can earn up to a $300 bonus with qualifying direct deposits!
4.25%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn: $0
N/A
4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of June 28, 2024
Min. to earn: $1
N/A

Money market accounts

The Discover® Money Market account comes with a 4.00%-4.05% APY (the higher tier for balances above $100,000) and no monthly service fee. Though it has a lower rate than Discover's savings account, it comes with a debit card and check-writing privileges. Its biggest hurdle is the $2,500 minimum deposit required to open. Once opened, however, account holders no longer have to maintain a set balance to earn its APY.

Rates as of Jun 28, 2024

Discover® Money Market

Open Account for Discover® Money Market
Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Open Account for Discover® Money Market
Monthly Fee
$0
Min. Balance
$2,500 to open, no min balance to maintain
APY
4.00%-4.05% Rate info Circle with letter I in it. 4.00% applies to balances under $100K, Need $100,000+ to earn 4.05%
Min. To Earn APY
$0.01-$100,000 for 4.00%; $100,000+ for 4.05%
  • Competitive APY
  • No minimum balance to maintain account
  • No monthly fee
  • Debit card and check availability
  • FDIC insured
  • Required balance to open is a little high
  • Best rate requires at least $100,000
  • No in-person banking/branches

This account offers a competitive APY, especially given there are no monthly service fees, while still giving access to ATMs and checks. The minimum balance to open the account may be a little high for some folks, but you don't need to maintain a high balance to earn a good rate.

Read Full Review

Is Discover® Bank FDIC insured?

Yes, Discover® Bank has FDIC insurance up to $250,000 per depositor for each account ownership category.

Customer experience

Since Discover is an online bank, customer service will be over the phone or online. With that in mind, let's take a look at how customers rate their experiences.

Customer reviews

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.

  • Better Business Bureau rating: 1.18 out of 5 stars
  • Trustpilot rating: 1.8 out of 5 stars

Customer service

Discover® Bank's 100% U.S.-based customer service team is available 24 hours a day, seven days a week. You can contact the bank via live chat or call to reach an agent over the phone.

Mobile app

The Discover® Mobile Banking offers all the usual account management features plus mobile check deposit, an ATM finder, and online bill pay.

  • App Store rating: 4.9 out of 5 stars
  • Google Play rating: 4.5 out of 5 stars

Relationship benefits

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.

Alternatives to Discover® Bank

If Discover® Bank doesn't sound like a good fit for you, here are a couple of other banks to consider.

Capital One Bank

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

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.

Is Discover® Bank right for you?

Discover® Bank is right for you if:

  • You want a high interest rate and few fees.
  • You are interested in CDs with terms exceeding five years.
  • You frequently use your debit card and want to be rewarded for that.

FAQs

  • 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.

  • Yes, Discover is a safe bank. As an FDIC member, its customers have up to $250,000 in FDIC insurance per account holder, per ownership category.