Discover Bank Review July 2024: Free savings account with more than 4% APY but limited account options
Rachel Witkowski is a personal finance contributor to Fortune Recommends. Rachel reported on financial regulation and fintech at American Banker, and covered fintech policy and congressional oversight of the financial system for The Wall Street Journal.
Abigail Rueger is a deputy editor on the banking team at Fortune Recommends. She is passionate about personal finance and offering consumers actionable steps for making positive life changes. Prior to joining Fortune, Abigail spent four years as an editor for Choosing Therapy, a startup dedicated to providing the best mental health information on the web.
Discover Bank, the banking arm of credit card giant Discover Financial Services, offers easy-to-access savings accounts virtually with competitively high yields at little cost to the consumer. The bank has grown for decades primarily through its online banking products, including free checking, savings, money market account (MMA), and a variety of certificates of deposits (CDs).
Discover Bank has competitive yields for its savings account and CDs, with annual percentage yields (APY) exceeding 4%. The accounts are very simple, with only one option for each of the savings, checking, and MMAs. Most of the accounts are free with no balance requirement or maintenance fees.
All rates and fees are current as of July 2, 2024 and are subject to change.
Discover Bank
| Checking account: | Free with no balance or opening amount required |
| Savings account: | Free with a 4.25% APY |
| MMAs: | Earn up to a 4% APY |
| CD rates: | Earn up to 4.70% APY |
Pros
- Generous APY on savings and CDs
- Cash back checking account
- Minimal to no fees
Cons
- Limited account options
- Only one branch
Discover Bank rates and products
Discover bank offers a free checking account with 1% cash back, a savings account with a decent APY and no monthly fees, several CD options, and a free MMA with no maintenance fees.
Checking account
Discover’s Cashback Debit account offers 1% cash back rewards on up to $3,000 in debit card purchases each month. The free checking account has no opening fee or maintenance charges. There’s also no balance or deposit minimum required to open it.
In addition, account holders have access to more than 60,000 ATMs across the country without incurring a fee. This free checking account also has the option to get paid up to two days ahead of schedule when you establish direct deposit.
Savings account
Discover Bank has an interest-earning savings account with a 4.25% APY. The account is free with no maintenance fee or minimum deposit to open.
Discover Bank savings rates compared to current top rates*
Discover Bank’s 4.25% APY on its savings account is close to some of the best high-yield savings accounts on the market that have more than 5% APYs.
Money market account
Discover Bank has one MMA with a 4% APY on balances less than $100,000, and a 4.05% APY on balances exceeding that amount. The yield is just slightly below some of the highest-yielding MMAs in the nation.
Discover’s MMA is also free with no maintenance fees, though there is a $30 charge for any outgoing wire transfers.
Certificates of deposit
Discover Bank has a wide variety of CDs with yields up to a 4.70% APY for a one-year CD. The terms range from three months to 10 years. You need at least $2,500 to open a CD account and there is an early withdrawal penalty if you remove those funds before the term ends. The penalty is a percentage based on your CD term and how soon you remove the funds.
Although Discover Bank has many different CD terms, its rates are slightly below the best CD rates in the market.
Other services Discover Bank offers
Discover Bank also offers a variety of additional financial services:
- Retirement accounts: Discover offers traditional and Roth individual retirement account (IRAs) with yields at 4.25% APY as well as IRA CDs that top at 3.75%.
- Personal loans: Personal loans of up to $40,000 are available from Discover to cover a variety of needs, including home renovations, medical costs, and debt consolidation. Interest rates range from 7.99% to 24.99%.
- Home loans: The home loan products available from Discover include home equity loans and mortgage refinances from $35,000 to $300,000. The APRs on these products range from 6.74% to 7.99%.
- Financial education: Discover Bank publishes a Modern Money blog, which provides education and guidance on everything from saving, budgeting, and family finances to retirement and banking 101.
- Online banking: Discover bank is primarily an online-only bank as it has only one branch in Greenwood, Delaware.
The Discover Bank platform and customer support
In addition to its online banking services, Discover Bank has a mobile app and customer service support by phone 24/7, every day of the year. You can contact the bank by phone, email, or U.S. postal mail.
Is Discover Bank secure?
Discover Bank has federal insurance on deposits through the Federal Deposit Insurance Corp. (FDIC). The coverage is up to $250,000 per depositor and account type. The bank also offers a secure document upload portal for sending personal information.
As for the mobile banking app, Discover has several layers of security, including a touch or face ID log-in option and the ability to freeze your debit card at any time.
Although the bank explains security measures throughout its website, the parent company had to pause accepting new applications for its debit card in 2022 after it first launched the cash back rewards card due to too many fraudulent transactions, according to multiple reports. The debit card program resumed in 2023.
Discover Bank user reviews
Discover Bank has average ratings when it comes to customer reviews online. Some customers complained about delays and difficulties in opening an account or transferring money. Others complimented the bank’s savings rates and customer experience.
Over the 12 months ending in March 2024, there have been about 840 complaints related to Discover Bank’s savings and checking products that were reported to the Consumer Financial Protection Bureau (CFPB). In nearly every instance, the bank responded.
Compare Discover Bank alternatives
 Discover Bank |  American Express National Bank |  SoFi Checking & Savings |
|---|---|---|
| Top savings APY | Top savings APY | Top savings APY |
| 4.25% | 4.35% | Up to 4.60%* |
| Top checking APY | Top checking APY | Top checking APY |
| 1% cash back rewards only | 1% | 0.50% |
| Top CD APY | Top CD APY | Top CD APY |
| 4.70% | 4.75% | N/A |
| Read more about our favorite online banks | View offer at Bankrate | View offer at SoFi |
*SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Is Discover Bank right for you?
Discover Bank is a great option if you're looking for a checking or savings account online at little-to-no cost. The 4%-plus APYs on its savings account, MMA, and certain CDs are competitively priced.
Discover Bank only offers one type of savings, checking, and MMA, so it’s best for savers who prefer simple options.
Frequently asked questions
What bank owns Discover?
Discover Financial Services is in the process of being bought by Capital One Financial Corp. The $35.3 billion deal, announced Feb. 19, 2024, is pending regulatory approvals—a process that will be significant because it involves two large financial companies. The deal is expected to close in late 2024 to early 2025.
What does the Capital One and Discover deal mean for banking customers?
Capital One is set to acquire Discover, assuming their banking customers once the deal closes. Both companies have similar banking products that will eventually merge, although it’s too early to determine exactly how the products will change. It’s likely Discover’s banking features will get tweaked over time, particularly with the new Capital One branding.
How do I deposit money into my Discover Bank account?
There are several ways to deposit money to Discover accounts, including making a mobile check deposit with the Discover banking app, completing an online transfer to your Discover account, or setting up direct deposit. You can also mail checks made payable to you with a deposit slip to Discover Bank.
What is the Zelle limit for Discover?
Discover banking customers may send a total of $600 per day using Zelle.
How long does a Discover Bank transfer take?
While transfers from one Discover deposit account to another are nearly instant, transfers to or from outside banks can take up to five business days.
About the contributors
Rachel Witkowski is a personal finance contributor to Fortune Recommends. Rachel reported on financial regulation and fintech at American Banker, and covered fintech policy and congressional oversight of the financial system for The Wall Street Journal.
EDITORIAL DISCLOSURE: The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.