Discover Cashback Debit Review: Cash Back Is Just the Tip of the Iceberg

The Discover Cashback Debit account is an interesting alternative to interest-bearing checking accounts that will appeal to frequent debit card users. It also charges fewer fees than most banks, including many of its online competitors. Read our full Discover Cashback Debit account review below to learn about all it has to offer.

Top perks

1% back: Discover Cashback Debit account holders are eligible to earn 1% back on purchases (See website for details) 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, or insufficient fees, to name a few.

READ MORE: Checking Account Fees and How to Avoid Them

Early pay: Customers can receive their paychecks up to two days early with no charge.

Fraud and privacy protection: Discover says customers aren't responsible for fraudulent debit card purchases. Customers can also use Discover's mobile app to remove their personal

Fee-free ATMs: Customers can 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 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 Locator 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.

FDIC insured: Discover Cashback Debit accounts are covered by the same FDIC insurance as traditional bank savings accounts. Your funds -- up to $250,000 per depositor, per institution -- are protected in the unlikely event of bank failure.

What could be improved

APY: Discover gives you cash back instead of letting you earn interest on your checking account balance. Whether that's a good or a bad thing depends on your spending habits.

ATM withdrawal limit: Discover caps your ATM withdrawal limit at $510 per day (some ATMs may have lower withdrawal limits). While it's not unusual for banks to impose withdrawal limits, other banks have higher daily limits than this.

LEARN MORE: What Is APY?

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
• Direct deposit
• 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. The full amount becomes available within two to five business days under normal circumstances. New customers -- those who have had a Discover bank account for less than 30 days -- may have to wait up to five business days to access their funds.

Withdrawal options

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

• ACH transfer
• Check withdrawal
• Request a mailed check
• Wire transfer (subject to a service fee)
• 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.

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.

If you don't use your debit card often 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.