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Discover® Bank CD Rates: The Ultimate Guide to Terms, APYs, and Best Alternatives

Review Updated
James McClenathen
Author: James McClenathen
James McClenathen
James McClenathen

James is the Managing Editor for Motley Fool Money, overseeing the production and quality of our editorial content. James has worked full-time for The Motley Fool since 2012. He's a personal finance wonk, longtime editor, former reporter, and University of Michigan alum.

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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 that our product ratings are not influenced by compensation. APY = Annual Percentage Yield.

With experts predicting an interest rate drop later this year, locking in a solid APY now could be a smart move. Discover® Bank offers a wide range of CD terms with competitive rates, higher than most brick-and-mortar banks, though not always the best you'll find online. Let's dive into what you need to know and whether a Discover® Bank CD is the right fit for you.

Current Discover® Bank CD rates and terms

Rates as of April 22, 2025

APY = Annual Percentage Yield

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

Discover offers competitive CD rates, particularly when compared to traditional brick-and-mortar banks. It provides a range of unique term lengths, with CDs available for as short as three months and as long as 10 years. This flexibility makes Discover an excellent choice for individuals looking to secure a rate for either a short-term or an extended period.

MINIMUM DEPOSIT $0
Open Account for Discover® Bank CD

On Discover Bank's Secure Website.

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% 3.70% 4.00% 4.00% 3.80% 3.80% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%

Unlike other banking products we evaluate, certificates of deposit (CDs) do not receive a star rating from us. This approach is due to the frequent updates in interest rates and terms associated with CDs. Instead, we highlight CDs on our best-of list pages based on their annual percentage yield (APY) and the fees associated with early withdrawals. Our top CD selections typically offer competitive APYs without complex qualification tiers, low early withdrawal penalties, reliable strong brand reliability, and user-friendly features.

Motley Fool Money focuses exclusively on standard CDs and does not review IRA CDs, bump-up CDs, callable CDs, or other specialized CD accounts.

Our aim is to maintain a balanced list featuring top-scoring products from reputable brands offering competitive APYs and standout features. Learn more about how Motley Fool Money rates bank accounts.

Unlike other banking products we evaluate, certificates of deposit (CDs) do not receive a star rating from us. This approach is due to the frequent updates in interest rates and terms associated with CDs. Instead, we highlight CDs on our best-of list pages based on their annual percentage yield (APY) and the fees associated with early withdrawals. Our top CD selections typically offer competitive APYs without complex qualification tiers, low early withdrawal penalties, reliable strong brand reliability, and user-friendly features.

Motley Fool Money focuses exclusively on standard CDs and does not review IRA CDs, bump-up CDs, callable CDs, or other specialized CD accounts.

Our aim is to maintain a balanced list featuring top-scoring products from reputable brands offering competitive APYs and standout features. Learn more about how Motley Fool Money rates bank accounts.

Key features of Discover® Bank CDs

Minimum Deposit $0
Range of Term Lengths 3 months - 10 years
Compounding Schedule Daily
Automatic Renewal? Yes
Grace Period 9 days
Data source: Discover.

Early withdrawal penalties and risks

All Discover® Bank CDs have withdrawal penalties if you withdraw early, but the penalty differs depending on the length of the CD term.

CD Term Penalty
Less than 1 year 3 months simple interest
1 year - less than 4 years 6 months simple interest
4 years - less than 5 years 9 months simple interest
5 years - less than 7 years 18 months simple interest
7 years - 10 years 24 months simple interest
Data source: Discover.

What does that mean for your money?

Say you put $10,000 in a 1-year Discover® Bank CD at 4.00% APY. If you withdraw early, the penalty is 6 months of simple interest, which would cost you $200. If you had the same amount in a 5-year CD at 3.50% APY, with a penalty of 18 months of interest, you'd lose $525. Ouch. Make sure you're truly OK with locking in your money before committing.

Discover® Bank CD maturity and automatic renewal

When your CD term ends, you have a nine-day grace period to decide what to do. If you don't make a decision, your CD will automatically renew for the same term length at Discover's current rate. That could be great (or not), depending on what rates look like when the time comes. Mark your calendar so you don't accidentally get locked in again.

Pros and cons of Discover® Bank CDs

Pros

  • No minimum deposit
  • No account fees
  • Wide range of term options
  • Higher rates than traditional banks

Cons

  • High early withdrawal penalties
  • No physical branches

How do Discover® Bank CD rates compare?

Rates as of April 22, 2025
Bank & CD Offer APY Term Min. Deposit Next Steps
LendingClub CD
Member FDIC.
Open Account for

On LendingClub's Secure Website.

APY:
4.10%
Term:
14 Months
Min. Deposit:
$500
Open Account for

On LendingClub's Secure Website.

Discover® Bank CD
Member FDIC.
Open Account for Discover® Bank CD

On Discover Bank's Secure Website.

APY:
4.00%
Term:
1 Year
Min. Deposit:
$0
Open Account for Discover® Bank CD

On Discover Bank's Secure Website.

Western Alliance Bank CD
Open Account for

On Raisin's Secure Website.

APY:
4.00%
Term:
6 Months
Min. Deposit:
$1
Open Account for

On Raisin's Secure Website.

Maximizing CD earnings: The smartest strategy in 2025

CD ladders: Flexibility and high returns

A CD ladder allows you to balance earning high interest rates and maintaining access to your funds. By opening multiple CDs with varying term lengths, you can ensure part of your money is available sooner if needed. With Discover's wide range of CD terms, from 3 months to 10 years, it's an ideal place for building a CD ladder that suits your financial goals.

For example, instead of investing $50,000 in a single 1-year CD, you could split it into $10,000 each in 6-month, 1-year, 18-month, 3-year, and 5-year CDs. This strategy gives you access to funds at different intervals, while still locking in competitive rates for longer-term savings.

Discover® Bank CD vs. high-yield savings account

While Discover® Bank CDs offer higher interest rates compared to most traditional savings accounts, they come with the trade-off of less liquidity. High-yield savings accounts, on the other hand, provide the flexibility of accessing your funds at any time while still earning competitive interest.

If you value liquidity, a high-yield savings account might be a better fit. The Discover® Online Savings account, for example, offers a 3.60% APY with no minimum deposit. If you need access to your funds anytime without worrying about penalties, a savings account could be a smarter choice. Apply for the Discover® Online Savings account today.

Tax implications of CDs

CD interest is taxable income, which means you'll have to report it to the IRS, even if you don't withdraw the funds. Depending on your state, you may also owe state income taxes. If you withdraw early and lose interest due to penalties, that could reduce your taxable interest earnings. Always check with a tax professional to understand how this might affect your situation.

How to open a Discover® Bank CD

Opening a Discover® Bank CD is quick and can be done entirely online. Here's what you need to know:

Eligibility and requirements

To apply for a Discover® Bank CD, you must:

  • Be at least 18 years old
  • Have a valid Social Security number
  • Provide a U.S. address and a government-issued ID
  • Have a U.S.-based bank account to fund the CD

Funding options

Once your application is approved, you can fund your CD using:

  • ACH transfer from an external bank account
  • Wire transfer (fees may apply from your bank)
  • Check mailed to Discover® Bank
  • Transfer from an existing Discover account

When your CD starts earning interest

Interest starts accruing as soon as your funds are processed. ACH transfers usually clear in one to two business days, wire transfers typically process the same day, and checks may take longer.

Once funded, your CD is locked in at the current rate for the full term, so be sure to review your options carefully before finalizing your investment.

Should you open a Discover® Bank CD?

A Discover® Bank CD can be a great option, but whether it's the right choice depends on your financial goals and need for flexibility.

Who should consider a Discover® Bank CD?

People who are looking for guaranteed returns and don't need immediate liquidity are good candidates for a CD. But if you fall into one of these two categories, a Discover® Bank CD may be a particularly good choice for you:

  • People who want a variety of term options: Discover offers CDs ranging from 3 months to 10 years, making it easy to find a term that aligns with your savings timeline.
  • Savers with long-term savings goals: A 10-year CD is somewhat rare. If you're looking for a long-haul savings term, Discover is a good choice.

Who should look elsewhere?

If you may need early access to your money, Discover® Bank CDs won't be the best option for you. They have early withdrawal penalties, so a high-yield savings account or money market account may be better. Plus, while Discover offers competitive rates, some online banks or credit unions may have slightly higher APYs.

Is a high-yield savings account a better option for you?

A high-interest savings account offers rates competitive with the best CDs accounts, but without having to lock your money away for months or even years at a time. Here are some top-rated high-yield savings account options from our experts.

Account APY Promotion Next Steps
up to 3.80%
Rate info Circle with letter I in it. SoFi members who enroll in SoFi Plus with Eligible Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or SoFi members with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. If you have satisfied Eligible Direct Deposit requirements for our highest APY but do not see 3.80% APY on your APY Details page the day after your Eligible Direct Deposit arrives, please contact us at 855-456-7634. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Min. to earn: $0
New customers can earn up to a $300 bonus with qualifying direct deposits!
3.60%
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 8, 2025. Rates are subject to change at any time before or after account opening.
Min. to earn: $0
N/A
4.00%
Rate info Circle with letter I in it. Balances less than $250,000 earn 4.00%, and balances greater than $250,000 earn 4.20%.
Min. to earn: $0
N/A
Open Account for Barclays Tiered Savings

On Barclays' Secure Website.

Disclaimers


FAQs

  • Discover® Bank CD rates are slightly higher than traditional brick-and-mortar banks, but you may find some higher rates at other online-only banks. Still, they're competitive overall.

  • Yes, now is a good time to lock in a CD rate, as rates are likely to fall throughout 2025.

  • Discover® Bank CDs typically offer higher rates than most traditional savings accounts, but they come with less flexibility since your money is locked in. High-yield savings accounts offer more liquidity but lower returns.