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

Review Updated
Kailey Hagen
Matt Frankel, CFP®
By: Kailey Hagen and Matt Frankel, CFP®

Our Banking Experts

Nathan Alderman
Check IconFact Checked Nathan Alderman
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.

Discover® Bank does its best to help you grow your savings, no matter which account you use. It doesn't bog you down with costly fees or require high balances to earn its competitive APYs. Instead, it focuses on providing great customer service and useful accounts with no surprises. Get all the details with our Discover® Bank review below.

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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.
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= Excellent
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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

Discover® Bank savings accounts

If you're looking for a safe place to keep your emergency fund, Discover® Bank's savings account might be what you're looking for.

Discover® Online Savings

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.

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!
5.00% APY for balances of $5,000 or more
Rate info Circle with letter I in it. 5.00% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn: $100 to open account, $5,000 for max APY
N/A
5.25%
Rate info Circle with letter I in it. To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.
Min. to earn: $0
N/A

Discover® Bank CD accounts

CDs offer higher rates than savings accounts, but don't allow for convenient withdrawals. If you're looking for a CD with a high rate and flexible terms, the Discover® Bank CD rates are a high-yielding option.

Discover® Bank CDs

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.

Compare CD rates

Discover® Bank isn't the only option for high-yield CDs. Below, you can compare Discover to some of our other top picks for CDs.

Rates as of May 14, 2024
Bank & CD Offer APY Term Min. Deposit Next Steps
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

Discover® Bank checking accounts

Because savings accounts and CDs don't offer convenient access to your money, it's important to keep some funds in a checking account. Below, we'll go over how Discover® Bank's checking account stacks up against the competition.

Discover® Cashback Debit

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 could make this account more valuable than a typical interest-bearing checking account for those who use their debit cards frequently. After all, 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.

Checking account comparison

We recommend comparing checking account options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of standout accounts.

Account APY Promotion Next Steps
0%
Min. to earn: N/A
Earn 1% cash back on up to $3,000 in debit card purchases each month (see details when you click 'Open Account')
0.40% (up to 3.30%)
Rate info Circle with letter I in it. To earn the full APY, account holders must do all of the following: Receive monthly direct deposits totaling more than $1,500; make 10 transactions a month with your Axos debit card, or sign up for Axos's Personal Finance Manager; maintain an average daily balance of $2,500 per month in an Axos Invest Self Directed Trading Account; and use your Rewards Checking account to make your full monthly Axos Bank consumer mortgage, personal, or auto loan payment.
Min. to earn: Monthly direct deposits totaling at least $1,500
Use the promo code AXOS300 when you apply for a Rewards Checking account by June 30th, 2024. Then have qualifying direct deposits to earn up to a $300 bonus!
0.50%
Rate info Circle with letter I in it. You can earn the maximum savings 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
Cash bonus up to $300 with direct deposit set up (see details when you click 'Open Account')

Discover® Bank customer service and experience

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.

Discover® Bank 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

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.

Our bank and credit union methodology

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.

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.

Our Banking Experts