Discover Cashback Debit Account Review

Kailey is an industry specialist covering bank accounts, credit cards, and all things personal finance. Her work has appeared on USA Today, CNN Money, Fox Business, and MSN Money.

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The Discover Cashback Debit Account is an intriguing alternative to an interest-bearing checking account that will appeal to those who use their debit cards often and don't usually keep a lot of money in their checking account. Instead of earning interest on your balance, you earn cash back on your debit card transactions, like you would with a credit card. But those who favor credit cards with higher rewards-earning potential might not reap any benefits from the Discover Cashback Debit Account.

Top perks

1% back: Discover Cashback Debit Account holders are eligible to earn 1% back on every purchase they make with their debit cards, on up to $3,000 in debit card purchases each month. Discover limits you to a maximum of $360 in cash back per year, but this still far outstrips what most checking accounts can offer in interest. ATM transactions, money order purchases, point-of-sale cash withdrawals, peer-to-peer payments, loan payments, and payments made with third-party payment services are not eligible for cash-back rewards.

No fees: The buffet of $0 fees is impressive. You won't pay fees for monthly maintenance, overdrafts, stop payments, and insufficient fees, to name a few.

Fee-free ATMs: Discover enables its Cashback Debit Account customers to withdraw money from any of the over 60,000 MoneyPass® and Allpoint ATMs nationwide without paying any fees. This is a larger network than many other online checking accounts offer, so you'll have better odds of finding a surcharge-free ATM near you. You can locate the nearest one using the ATM Finder tool on Discover's website. Discover also won't charge you fees for using ATMs outside of these networks, though the ATM owner might.

No balance or activity requirements: Many checking accounts have minimum balance requirements to open an account, but the Discover Cashback Debit Account does not. It also doesn't charge a monthly service fee -- and there's no ongoing minimum balance or required number of monthly transactions. This makes it an affordable option for those who don't keep a lot of money in their checking accounts and those who don't spend a lot of money each month.

Free checks and debit cards: Discover doesn't nickel-and-dime you on the little things, like the cost of checks or replacement debit cards. This is not unusual among online banks, but what is unusual is that Discover also doesn't charge you for expedited check and debit card delivery, while most other banks do. It may seem like a small thing, but when you're out of checks or you've lost your debit card and you need your money in a hurry, you'll appreciate that Discover makes things easy for you.

What could be improved

You won't earn interest: Discover gives you cash back instead of enabling you to earn interest on your checking account balance. Whether that's a good or a bad thing depends on your spending habits. It could be a good thing if you use your debit card a lot, but those who prefer to shop with their credit card to take advantage of potentially higher cash-back rewards might never actually earn any cash back on their Discover Cashback Debit Account. These individuals would be better off considering an interest-bearing checking account instead.

Fees

Discover Cashback Debit Account Monthly Maintenance ATM Withdrawal Overdraft Stop Payment Insufficient Funds
Fees $0 $0 $0 $0 $0

How to access your money

Discover Cashback Debit Account holders have the following options for depositing or withdrawing money from their accounts:

Deposit options

You can add funds to your account in any of the following ways:

  • ACH transfer
  • Mailed check
  • Mobile-deposited check
  • Wire transfer

ACH transfers and wire transfers initiated from another bank will show up in your account the same business day Discover receives the funds. ACH transfers and wire transfers initiated from Discover could take up to four days to show up in your account.

Discover makes the first $250 of any mailed or mobile-deposited check available the same business day it receives the funds for existing customers or the next business day for new customers. It may take longer to receive the rest of your funds for larger checks, so plan accordingly when depositing checks over $250.

Withdrawal options

Withdraw money from your Discover Cashback Debit Account using any of the following methods:

  • ACH transfer
  • Request a mailed check
  • Wire transfer
  • ATM withdrawal
  • Point-of-sale cash withdrawal

Note that if you're transferring money from your Discover Cashback Debit Account to an external bank, it may take a day or two for the money to show up in your new account.

Online checking account comparison

Those interested in earning interest on their checking account balance should take a closer look at the Simple Protected Goal Account. It offers a high APY on for qualifying balances. This is higher than the rates most savings accounts offer. The account also has a number of saving and budgeting tools built into its mobile app and online account so you can learn to better manage your money and achieve your financial goals more quickly. It doesn’t offer cash back on your debit card purchases, though.

The Bank5 Connect High-Interest Checking Account enables you to grow your checking account balance in both ways. It offers a competitive APY, plus the opportunity to earn cash back, though you don't earn these rewards on every purchase. You'll periodically receive offers from popular retailers that you can take advantage of if you want to. It also offers ATM fee reimbursements of up to $15 per month for using ATMs outside of its network, which could help save you money.

Rates as of March 18, 2020
Offer
Discover Cash Back Debit
 
Member, FDIC
Simple
 
Member, FDIC
Bank5 Connect Checking
 
Member, FDIC
Rating
Rating image, 4.5 out of 5 stars.
Rating image, 4.5 out of 5 stars.
Rating image, 4.5 out of 5 stars.
APY

APY: 0%

APY: 1.55%

APY: 0.76%

Best For

Best For: Cash back on $3,000 of spend monthly

Best For: Budgeting tools

Best For: High APY

Min. to earn APY

Min. to earn APY: $1

Min. to earn APY: $1

Min. to earn APY: $1

Next Steps

This checking account is right for you if:

If you don't use your debit card a lot and you usually have a few thousand dollars or more in your checking account, you'll do a lot better with a high-yield checking account, like the ones mentioned above.

The Discover Cashback Debit Account is best for those who use their debit cards often and don't usually maintain a high checking account balance. The lack of minimum balance or activity requirements, plus the free checks and debit card replacements make this an affordable account. If you don't have a large balance, the cash-back rewards would probably earn you more than you'd get in interest from an interest-bearing checking account.

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