- Little-to-no fees for bank account services.
- Competitive APYs for deposit accounts.
- 24/7 customer service.
- Withdrawals at over 60,000 ATMs nationwide.
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Updated April 18, 2024
In a nutshell
Discover® is mainly known for its credit card and personal loan products, but it also has a wide variety of bank products and operates primarily as an online bank.
- Discover has low-to-no-fee banking services and competitive APYs.
- Discover bank is one of the original online banks.
- In addition to banking products and credit cards, Discover® also offers mortgages and personal loans.
Pros:
Cons:
- No physical branches.
- No cash deposits directly to accounts.
- No reimbursement of out-of-network ATM fees.
Discover Bank’s banking products
Here’s a quick summary of Discover Bank’s accounts.
Discover Cashback Debit account
The Discover Cashback Debit account offers 1% cash back on up to $3,000 in debit card purchases each month. With this account, there are no monthly fees, minimum balance requirements, or insufficient funds fees. The only fees you might incur are for outgoing wire transfers or fees by a non-Discover ATM if it is not part of the 60,000+ ATMs in the no-fee network.
Discover Online Savings account
The Discover Online Savings account features an incredibly competitive interest rate, beating out banking competitors like Chase, PNC, Ally and plenty more. This account has no monthly maintenance fees, minimum balance requirements, or excessive withdrawal fees. Discover Bank also waives fees for things like:
- Official bank checks and expedited delivery.
- Excessive withdrawals.
- Deposited item return.
- Stop payment orders.
- Insufficient funds.
- Account closure.
Like the checking account, the only fee you may incur is for outgoing wires.
Discover® Online Savings Account
Discover® Online Savings Account
APY
4.25%
Min. deposit
$0
Monthly fee
$0
Min. balance to earn APY
$0.01
Certificates of deposit (CDs)
Discover Bank's CD accounts offer flexible terms ranging from three months to ten years, also with competitive interest rates. There are no opening, monthly, or maintenance fees, but early withdrawal penalties do apply. The early withdrawal fee depends on the maturity date of your CD. This means you could forgo three months to 24 months of simple interest earnings for early withdrawals.
Interest is compounded daily and credited to your account monthly, and there’s a $2,500 minimum deposit required to open a CD with the bank.
| Discover bank CD's | APY | Min. deposit | Term |
|---|---|---|---|
Discover 3-Month CD | Up to 4.90% | $2,500 | 3 months |
Discover 6-month CD | Up to 4.90% | $2,500 | 6 months |
Discover 9-Month CD | Up to 4.90% | $2.5 | 9 months |
Discover 12-Month CD | 4.90% | $2,500 | 12 months |
Discover 18-Month CD | Up to 4.90% | $2,500 | 18 months |
Discover 24-Month CD | Up to 4.90% | $2,500 | 24 months |
Discover 30-Month CD | Up to 4.90% | $2,500 | 30 months |
Discover 36-Month CD | Up to 4.90% | $2,500 | 36 months |
Discover 4-year CD | 3.75% | $2,500 | 4 year |
Discover 5-year CD | 3.75% | $2,500 | 60 months |
Discover 7-year CD | 3.75% | $2,500 | 7 year |
Discover 10-year CD | 3.75% | $2,500 | 10 year |
Money market account (MMA)
Discover Bank’s MMA product combines the benefits of a savings account with the flexibility of check-writing privileges. This account allows you to earn higher interest rates on your money, which you can also access via ATM, with a debit card or checks.
The bank offers even higher interest rates for balances of $100,000 or more. Like other Discover Bank accounts, there are no monthly fees or minimum balance requirements. With these accounts, you’ve also got access to online bill pay. Discover’s expedited replacement debit cards carry no fees. This account requires a $2,500 minimum deposit to open, but there’s no minimum balance you must maintain to keep it open or fee-free.
Discover® Money Market Account
Discover® Money Market Account
APY
4.15% for balances under $100,000
4.20% for balances over $100,000
Min. deposit
$2,500
Monthly fee
$0 on account
$30 for wire transfer
ATM fee if outside ATM network
Min. balance to earn APY
$0
Discover Bank's other products
In addition to the offerings mentioned above, Discover Bank offers the following financial products:
Personal loans
Discover Bank offers unsecured personal loans ranging from $2,500 to $40,000 with terms between 36 and 84 months. These loans can be used for various purposes, such as debt consolidation, home improvement, medical bills, small business costs or large purchases.
Discover provides competitive interest rates and flexible repayment terms, enabling customers to manage their loans effectively. You can even get a free loan rate check without affecting your credit score.
Discover Personal Loan
Discover Personal Loan
APR
7.99% to 24.99%
Loan amount
$2,500 to $40,000
Term
36 and 84 months
Mortgages
Discover Home Loans offers home equity and refinance loans ranging from $35,000 to $300,000 with terms of 10, 15, 20 and 30 years. Discover Banks mortgage loans offer a fixed rate APR and can be used to consolidate debt, cover home improvement projects and other major expenses.
Though there are no closing fees for these loans, you may have to reimburse Discover for some closing fees (not to exceed $500) should you decide to pay your loan off within three years of closing. If you are a resident of Connecticut, Minnesota, New York, North Carolina, Oklahoma, or Texas, this requirement won’t apply to you.
Discover Mortgages
Discover Mortgages
APR
6.99% APR for first liens and 7.99% APR for second liens
Loan amount
$35,000 to $300,000
Term
10, 15, 20, and 30 years
Credit cards
Discover Bank is best known for its selection of user-friendly credit cards, offering cash-back rewards, travel rewards, student cards and secured credit cards. Each card comes with a suite of benefits, including no annual fees, U.S.-based customer service and robust security features.
The issuer’s top credit cards include:
Discover Bank’s customer experience
Discover advertises a few of its customer-centered features, such as its U.S.-based 24/7 customer service line in English and Spanish. Customer service is available via phone, internet browser and the Discover App.
The bank's customer-centric approach has not only won the trust of its customers but also the recognition of industry experts and consumer watchdog sites. For example, JD Power has consistently ranked Discover Bank among the top for customer satisfaction in their U.S. Credit Card and Direct Banking Satisfaction Study.
Discover Bank is accredited by the Better Business Bureau and has an A+ rating. Though the company has been flagged for older issues related to marketing and student loan servicing by the Consumer Financial Protection Bureau (CFPB,) the CFPB complaint database reveals fewer complaints about Discover Bank compared to its competitors.
How does Discover Bank compare to its competitors?
Discover Bank vs. Chase
Discover Bank operates mainly as an online bank, but the lack of brick and mortar locations doesn’t stop it from delivering on its customer-centric service model. In fact, the lack of physical locations and lower overhead likely helps the bank offer competitive interest rates and many fee-free account services and financial products.
On the other hand, Chase Bank, one of the largest and oldest traditional banks in the United States, is more of a full-service operation, with a list of products and services ranging from personal and business banking to wealth management and brokerage services. Also, Chase's extensive ATM network and larger geographical presence might be preferable for those who prefer in-person banking. However, these convenience features often come with higher fees.
Discover Bank vs. Ally
Both Discover and Ally operate in the online banking space, so there are a lot of similarities, such as the lack of physical branches, lower fees and more competitive interest rates. However, Ally beats Discover out in terms of product offerings.
Unlike Discover, Ally offers a tad more variety in its products and services including auto loans, mortgages to purchase a home, investing and retirement services, an interest-bearing checking account and even commercial financing for vehicles. Ally falls short in terms of fee-free ATMs, though, with only 43,000 compared to Discover’s 60,000.
Discover Bank vs. Capital One Bank
Although both banks have a strong online banking platform with similar banking and credit card products, Capital One Bank has an advantage due to the availability of physical branches. For consumers who prefer a more flexible banking experience that marries a strong digital presence with brick and mortar locations, Capital One might be the better option. Also, Capital One boasts a network of over 70,000 fee-free ATMs, which is about 10,000 more than Discover advertises.
Methodology
By employing this comprehensive review methodology, we aim to empower consumers like you to make informed decisions when choosing a consumer bank that aligns with your financial goals and preferences. We evaluate key factors such as interest rates, fees, minimum balance requirements, access to funds and more to help you make informed decisions. Please note that our reviews are based on publicly available information, and we recommend verifying the latest details directly from the respective financial institutions.
AP Buyline roundup: Online banking with substantial rewards
Discover Bank offers a flexible online banking option with plenty of convenient features. The bank boasts 24/7 U.S.-based customer services alongside several no-fee products and services. If you’re used to more bespoke financial services, high-touch personal banking and physical branches, Discover’s offering will fall short. But unless you fall into the latter group of customers, we think Discover offers just enough to make the bank ideal for the average, money-conscious consumer.
Frequently asked questions (FAQs)
Is Discover Bank FDIC insured?
Deposit accounts are FDIC-insured for $250,000 per depositor, per deposit ownership category.
Is Discover Bank a good or bad bank?
Discover Bank has received accolades and recognition that indicate it has better-than-average customer service and low-fee products and services when compared to its competitors. As such, it qualifies to be considered a good bank.
Is Discover Bank a good bank for beginners?
Discover Bank is a good bank for customers who are just starting their banking journey or don’t require a full-service banking experience. Many of the fee-free products and services are also good for beginners new to banking.
Who owns Discover Bank?
Discover Bank was once a subsidiary of Sears and was eventually spun off as Discover Financial Services. The company is publicly traded on the New York Stock Exchange under the ticker DFS.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.