The benefits explained
- Cash back bonus on debit card purchases. Cash back on credit cards is pretty standard, but Discover instead offers a 1% cash back bonus on everything you buy with your debit card, up to $3,000 in purchases per month. You could potentially earn up to $360 per year.
- No charges. The Discover Bank Chequing Account has no fees, minimum monthly fees or NSF fees. Also, you will not be penalized with fees for returned items or if you close your account.
- Large network of ATMs. The Discover debit card is accepted at 415,000 ATMs in the United States. Account holders can make fee-free withdrawals from some 60,000 ATMs belonging to the Allpoint and MoneyPass networks. Using a machine outside of these networks may incur a surcharge imposed by the third-party owner of the ATM. Discover itself, however, never charges a fee for using ATMs.
Disadvantages Explained
- A physical location. True to its name, Discover Online Banking has only one branch, in Greenwood, Del. So if you like face-to-face contact, this is not the institution for you.
- High minimum CD deposits. Although Discover Bank’s interest rates for its certificate of deposit compare well with the competition, you’ll need at least $2,500 to get started. This sum is a little high: other online banks allow you to open a CD with as little as $500 or $1,000.
What is Discover Online Banking for?
Discover online banking should suit those looking for a digital bank that offers a suite of different services.
This might be particularly suitable for those who:
- Prefer dematerialized and digital transactions
- I hate paying fees
- Generally use their debit card for daily transactions
- Prefer to do business with an established financial institution “by name”
What does Discover Online Banking offer?
As you would expect from the banking division of a large financial services company, Discover Bank offers a range of products and services:
- Current account
- Savings account
- Money market account
- Certificates of deposit
- IRA
Discover the current account
A major feature of the Discover Chequing Account is its cash back debit card. However, the 1% cash back reward applies strictly to purchases. ATM transactions, money orders, loan payments made with your debit card, and payments using peer-to-peer platforms are not eligible for cashback.
Other than cash back on your cards, there are no monthly maintenance fees, insufficient funds, or fees for returned items or chargeback orders. There is no minimum to open an account, and there is no minimum monthly balance to keep the account open.
Other perks include free checks.
Digital-only banks like Discover only allow you to withdraw cash from ATMs; you cannot deposit cash or physical checks. Discover lets you deposit paper checks through its mobile banking app or by mail to a Salt Lake City processing center.
Discover the savings account
Like the checking account, Discover Savings Account requires no minimum to open or maintain the account. As of August 17, 2022, the annual percentage yield (APY) is 1.70%, which is higher than the national average savings rate of 0.08%.
Discover Bank’s no-fee features also apply here: the account is free of monthly maintenance fees or insufficient funds.
Discover the money market account
Although there is no ongoing minimum required to maintain a Discover Money Market account, you will need at least $2,500 minimum to open it. There are two interest rates: If your balance is less than $100,000, you will earn an APY of 1.50%. If it’s over $100,000, you’ll get a slight increase of 1.55%.
Once opened, the account incurs no monthly maintenance fees, no fees for insufficient funds or if you make more than six withdrawals or transfers in a given month.
Money market accounts are similar to savings accounts in that it is a deposit account that earns interest on your money. However, you can usually withdraw funds more easily, usually via a linked debit card; the account may also have check writing privileges.
Discover the certificate of deposit (CD)
Discover’s high-yield certificates of deposit (CDs) give you the ability to set aside a sum of money for a set amount of time. CDs generally earn a higher interest rate than a standard savings or checking account. And the longer your tenure, the more you can earn. The minimum amount for an opening deposit is $2,500. Discover’s high-yield CDs range from three months to 10 years, and interest rates are as follows:
| Discover the prices of bank CDs | |
|---|---|
| Term | APY |
| 3 months | 0.50% |
| 6 months | 0.75% |
| 9 months | 1.00% |
| 12 months | 2.30% |
| 18 months | 2.50% |
| 24months | 2.60% |
| 30 months | 2.60% |
| 36 months | 2.70% |
| 48 months | 2.80% |
| 60 months | 3.20% |
| 7 years | 3.20% |
| 10 years | 3.20% |
If you need to withdraw your money early, you will be hit with an early withdrawal penalty. The amount you get will depend on the duration of the CD:
| Learn about Bank CD Early Withdrawal Penalties | |
|---|---|
| Term | Early withdrawal fees |
| Less than 1 year | 3 months simple interest |
| 1 year to less than 4 years | 6 months simple interest |
| 4 years to less than 5 years | 9 months simple interest |
| 5 years to less than 7 years | 18 months simple interest |
| 7 years to less than 10 years | 24 months simple interest |
Your CD must be open for at least eight days before you can withdraw money.
Learn about IRAs
Discover offers both an individual retirement account CD and an IRA savings account. The IRA CD requires a minimum of $2,500 and offers comparable APYs to regular CDs. Savings IRA has no minimum and currently offers an APY of 1.50%. Retirement accounts can be traditional or Roth IRA.
Discover credit cards
Discover has a handful of no-annual-fee credit cards in its network, including a travel card, a student card, and a gas and restaurant card. Technically speaking, however, these cards are not part of online banking but are offered by another division of its parent company, Discover Financial Services, better known as Discover Bank. You don’t have to be an Online Banking customer to apply for a Discover credit card; nor does having an online bank account give you privileged access to these cards.
Refund cards
General Travel Rewards Cards
Secured credit cards
Business credit cards
Other financial services offered by Discover
As with credit cards, the products listed below are technically not offered through online banking, but because they are part of Discover Financial Services, the parent company, we list them here as a service.
Discover the Bank’s customer service
Discover Online Banking offers 24/7/365 phone support at 1-800-347-2683, with representatives based entirely in the United States, as the company likes to point out. You can also contact customer support via chat. And like most banks, you can deposit a check and access your banking information and financial transactions through its mobile app.
According to the JD Power 2021 US Credit Card Satisfaction Study, among credit card issuers, Discover ranks second with a score of 837. And according to the JD Power 2021 US Mobile Banking App Satisfaction Study, Discover also ranked second in online credit card satisfaction.
In 2012, Discover Financial Services paid 3.5 million customers $200 million for deceptive practices, such as enrolling customers in products such as its payment protection plans, without their permission. Discover also paid a $7 million civil penalty to the Consumer Financial Protection Bureau (CFPB) Civil Penalty Fund and the US Treasury.
How to bank with Discover Online Banking
Opening an online bank account is a simple and straightforward process. Whether you are an existing Discover customer (cardholder, borrower) or a new customer, you can open an account online in minutes.
Verdict
Discover Online Banking is a great option for those who feel comfortable with an all-digital financial platform. The generous cash back bonus on its debit card, no fees, and 24-hour service make it stand out in many ways. The interest rates offered on his accounts are competitive. However, Discover Online Banking options are limited to bank essentials: checking, savings, certificates of deposit and money market accounts. Beyond that, there are a few IRA account options available. If you’re looking for a financial institution that offers a full suite of products and services (i.e. credit cards, mortgages, personal loans, and wealth management), you might be better off looking elsewhere. While other Discover divisions offer some of these options, it’s unclear if there’s a lot of interaction between them and if using one product gets you another. Likewise, if you like to do your banking in person, Discover Online Banking probably isn’t for you. The company’s customer representatives are friendly and knowledgeable, but that’s not the same as developing a relationship with staff at a physical branch.
Methodology
Investopedia is dedicated to providing consumers with unbiased and comprehensive bank reviews. We collected over 20 data points from over 80 banks including available products, interest rates, fees and affordability to ensure our content helps users make the right decision for their banking needs. savings and banking.