Discover Bank Review: Many Banking Products Under One Umbrella
Discover Bank is usually associated with its credit card, but for those that dig a bit deeper, there’s a great bank to use here.
Discover offers a wide range of banking products – including checking, savings, CDs, and more.
In fact, most of the time, Discover Bank is on our list of the best high yield savings accounts and our list of the best money market accounts. They also have a very compelling checking account, and great CDs.
Here’s what you need to know in our Discover Bank review.
- Online bank with high yield savings and deposit products
- Great online checking account
- Clear fee schedule with first fee waived each calendar year
Who Is Discover Bank?
Discover Bank is part of the same company that offers the Discover credit card. All of the Discover financial products can be accessed through the primary Discover.com domain name, of which Discover Bank is a part of.
What Do They Offer?
For those looking to do all of their banking in one place, Discover Bank comes pretty close. While they don’t offer mortgages or loans, they do offer a wide range of deposit accounts with high yields and rewards.
Earn 1% cash back on up to $3,000 in debit card purchases each month. There is no monthly maintenance fee, and you can open an account without depositing anything. Discover Bank has no hidden fees. They outline the three fees that you can incur, which include:
- Outgoing wire: $30
- Stop payment: $15
- Insufficient funds: $30
You do have the option of waiving a stop payment or insufficient funds fee each year. Outgoing wire is not eligible for the fee waiver.
Discover Bank has over 60,000 no-fee ATMs. If you prefer going into a bank branch, you’ll be out of luck as the only branch is located in Delaware.
While this checking account doesn’t pay interest, the 1% cash back makes up for it. When you spend $1,250 in a month through debit spending, you’ll earn $12.50, which means $150 over a year.
There is a top APY savings account with no deposit to open. Interest is compounded daily. There is no minimum balance required or a monthly maintenance fee.
This doesn’t mean the account is fee-free. More than 6 withdrawals per month will incur a $15 fee. Insufficient funds will incur a $30 fee. Like the checking account, you can waive the first of these fees.
This is similar to a checking account, but you can earn interest if you have a high balance. A $100,000 balance will earn you a higher APY than the regular account. But if you let that balance fall below $2,500, you’ll be slapped with a $10 fee each month.
Additionally, there is a $15 fee for stop payments and excessive withdrawals. There is also a $30 fee for outgoing wire transfers and insufficient funds.
For both checking and money market accounts, funds can be transferred to and from external accounts up to six times without incurring a fee. You can also set up automatic transfers.
The APY on the checking and money market accounts can change at any time. That isn’t the case with a CD.
Check out the Discover Money Market Account here >>
Now we’ve reached the highest-yielding account where Discover is exceptionally competitive – they have top yielding CDs. You’ll need a $2,500 minimum opening balance, however.
Outgoing wire transfers are $30. There are penalties for early withdrawals. Depending on when you withdraw funds, the penalty is based on simple interest for a certain number of months. For example, less than 1 year is 3 months of simple interest, and 5 years to less than 7 years is 18 months of simple interest.
These CDs are for retirement accounts. They have the same maturities and yields as regular CDs. Withdrawals are based on the type of retirement account — Roth or traditional IRA. Contributions can be withdrawn from a Roth anytime without penalty. For a traditional IRA, you must wait until age 59.5.
You can roll over funds from another retirement account into an IRA CD or transfer funds from another financial institution.
Discover Bank has a mobile app, as well. You can deposit checks, find an ATM, and use Quick View, which lets you see your balances without logging into the app. Apple and Android versions of the app are available.
Customer service is available 24/7 through an 800 phone number.
Are There Any Fees?
Yes — as discussed above for each account type.
How Do I Open an Account?
You can open an account online at https://www.discover.com/online-banking/. You’ll need a Social Security number and address. You can also call the 800 phone number listed on the website to open an account.
Is My Money Safe?
Yes — Discover Bank is a member of the FDIC. Depositor funds are insured up to $250,000. Discover also uses bank-grade encryption.
Is It Worth It?
While not a full-service bank, Discover Bank is under the Discover umbrella, which does offer many different loan products. Having an account with Discover Bank means you’ll already be in their system should you want a loan product or credit card later on.
Discover Bank doesn’t have bank branches, except in Delaware. If you need a bank branch, you’ll want to look elsewhere. But given how convenient modern banking is, there isn’t much need to go into a branch.
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