Discover Bank review 2024
Discover Bank is an excellent option for those looking for high rates, minimal fees, and exceptional customer service. It's best for those prioritizing earning potential and a holistic online banking experience.
Written by
Writer
Drew Waterstreet is a contributing writer at Bankrate in the insurance vertical. His previous work includes content positions at Jerry and Podcast Notes, writing on topics related to car insurance, economic trends, personal finance, and entrepreneurship.
Updated June 19, 2024, 10:41 AM EDT
Written by
Editor
Hanna Horvath is a CERTIFIED FINANCIAL PLANNER™ and Red Venture's senior editor of content partnerships.
Fox Money is a personal finance hub featuring content generated by Credible Operations, Inc. (Credible), which is majority-owned indirectly by Fox Corporation. The Fox Money content is created and reviewed independent of Fox News Media. Credible is solely responsible for this content and the services it provides.
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Discover Bank has been a leader among online banks for quite some time. It offers competitive rates, low fees, and a customer-centric approach. The bank is known for its wide variety of accounts that appeal to a broad consumer base, from students to retirees.
We’ll review Discover Bank’s services, rates, and features to help you determine if it's the right choice.
Fox Money rating: 9.6/10
Discover Bank is a strong contender in the online banking space, offering competitive rates, minimal fees, and a varied product mix. The bank's strong customer service and unique cash back checking account set it apart from many competitors.
Pros
- Competitive rates on online savings accounts and CDs
- Wide variety of banking accounts and other financial products
- No fees
- Highly rated mobile app
- 24/7 customer service
- FDIC insurance
Cons
- Very limited physical branch network
- Some online banks may offer slightly better interest rates
- $2,500 minimum deposit requirement for CDs
About Discover Bank
Since then, the bank has grown to offer various online banking services. This includes checking and savings accounts, money market accounts, certificates of deposit (CDs), and more. With a strong focus on customer satisfaction, Discover Bank has become popular for those who want a low-fee, high-rate online bank.
Discover Bank is also on the brink of entering a new era. Capital One recently announced that it plans to acquire parent company Discover Financial Services, a merger that would create the country's sixth-largest bank. The agreement is still under review by shareholders and regulators, but a final decision is expected in late 2024 or early 2025.
It’s unclear exactly how the merger could impact Discover Bank accounts. That said, Discover Bank and Capital One bank accounts share many similarities, including competitive interest rates and fee-free structures. These commonalities should give customers peace of mind that potential post-merger changes to their bank accounts may be minimal.
Discover Bank accounts
Discover checking account
- APY: None
- Minimum initial deposit: $0
- Monthly fees: None
Discover Bank's Cashback Debit account is a unique offering that rewards customers for their everyday spending. With this account, you'll earn 1% cash back on up to $3,000 in monthly debit card purchases — a rarity among most checking accounts.
The Cashback Debit account comes with no monthly fees, no minimum balance requirements, and free access to over 60,000 ATMs nationwide.
Discover Bank also offers free checks, online bill pay, and mobile check deposits, making managing your money on the go easy. You can access your paycheck up to two days early when setting up a recurring direct deposit.
If you ever lose your debit card, don’t fret. Discover’s mobile app has a feature that instantly freezes the card until you find it. You can also get expedited delivery of your replacement debit card for free.
Pros
- No fees
- 60,000+ fee-free ATMs
- Early direct deposit
- 1% cash back on up to $3,000 debit card purchases each month
- Compatible with Zelle® and digital wallets
- Security features like instant debit card freeze
Cons
- Does not earn interest
- No physical branches for cash deposit
Discover Bank savings account
- APY: 4.25%
- Minimum initial deposit: $0
- Monthly fees: None
Discover Bank offers an Online Savings Account that totes a 4.25% APY, on par with other leading online banks. But unlike some competitors, you don’t need to maintain a certain balance to earn the highest APY.
This high-yield savings account also has no minimum balance requirements, no monthly fees, and allows for free transfers to and from your Discover checking account.
This savings account also allows you to set automatic savings transfers, create savings goals, and track your progress. Plus, Discover's mobile app lets you easily manage your account, deposit checks, and transfer funds from anywhere.
Pros
- No fees
- Easy compatibility with other Discover Bank accounts
- Solid interest rate on all balances
- No minimum opening deposit requirements
- Useful savings tools and goal-tracking
Cons
- May find higher rates elsewhere
- No ATM card
- No physical branches
Discover Bank money market accounts
- APY: up to 4.05%
- Minimum initial deposit: $0
- Monthly fees: None
Discover Bank's Money Market Account offers a competitive 4.00% APY with the added benefit of check-writing and debit card access. This account has no minimum opening deposit requirements or monthly maintenance fees.
If your balance is $100,000 or higher, you can earn 4.05% APY on your funds. While this may be unattainable for some the base rate (4.00%) is still solid, though slightly below what you’d find with top money market accounts.
This account allows you to easily access your funds via checks, online transfers, or ATM withdrawals. Discover Bank also offers free checks and a free debit card, making it simple to manage your money as needed.
Pros
- Solid APY
- No fees
- Access your cash via ATM, debit card, or checks
- $0 minimum deposit requirement
Cons
- No physical branches
- May find higher rates elsewhere
Discover Bank CDs
- CD terms: 3 months to 10 years
- Interest rates: 2.00% to 4.70% APY
- Minimum deposit: $2,500
- Early withdrawal penalties: Varies based on CD term
Discover offers 4.70% on its 1-year CD, slightly below the best 1-year CD rates but still higher than the national average of 1.82%, according to Red Ventures. Here’s a complete breakdown of Discover’s CD rates:
Discover also offers a wide range of CD terms, from 3 months to 10 years, with competitive interest rates that vary based on the term length. Interest is compounded daily and credited monthly.
One unique feature of Discover Bank's CDs is the ability to withdraw interest earned without penalty before the CD matures. However, early withdrawal of the principal will result in a penalty that varies based on the CD term.
Pros
- Wide variety of CD terms
- Competitive interest rates
- Ability to withdraw interest without penalty
Cons
- $2,500 minimum deposit requirement
- Stiff early withdrawal penalties
Other Discover Bank services
Discover also offers several other bank accounts and financial services, including:
- Personal loans: Discover offers personal loans with fixed interest rates, flexible repayment terms, and no origination fees. These loans can be used for debt consolidation, home improvements, major purchases, and more.
- Home equity loans: With Discover, you can tap into your home equity with a fixed-rate loan or refinance your mortgage. Loan amounts range from $35,000 to $300,000 and have fixed rates and low fees. In 2022, Discover was the country's #1 lender of home equity loans.
- Retirement accounts: Discover offers both IRA CDs and IRA retirement accounts.
Discover credit cards
Discover Bank is well-known for its credit card offerings. Discover credit cards, which include the Discover it® Cash Back and the Discover it® Miles, offer competitive rewards and no annual fees.
Discover is also known for its student cards, which allow college students — often new to credit — to build up their scores with responsible use and earn rewards. Most Discover cards also have solid introductory APR offers on balance transfers and purchases.
Discover cards are accepted by 70 million merchants in more than 200 countries and territories. This number is expected to increase with the upcoming Capital One merger.
Here’s a closer look at Discover’s card lineup.
Discover Bank fees
One of the standout features of Discover Bank is its commitment to minimizing fees. Here’s a look at some of the most common fees you’ll find with other banks:
- Monthly maintenance fees: None
- Overdraft fees: None
- Insufficient funds (NSF) fees: None
- Out-of-network ATM fees: None
Discover Bank banking experience
Online and mobile banking
As an online bank, Discover Bank understands the role a high-performing mobile app plays in digital banking. The bank's mobile app has received high user ratings, with 4.5 stars on Google Play and 4.9 stars on the Apple App Store.
Discover’s robust online banking platform allows customers to manage their accounts, transfer funds, and pay bills. The mobile app also boasts a noticeable commitment to financial security, with features like active account alerts, fraud monitoring, and touch or face ID login.
Discover Bank is an online-only bank without physical branches. However, customers can easily access their money through online transfers, ATM withdrawals, and checks.
Customer service
Discover Bank prides itself on offering 24/7 U.S.-based customer service. You can reach someone by phone any time of the day or night. You can also reach customer service by mail.
Discover Bank is accredited by the Better Business Bureau and has an A+ rating. However, despite the high ratings on its mobile app, its customer service has poor ratings on Trustpilot and ConsumerAffairs.
Discover Bank operates as an online bank, so there aren’t any physical branch locations you can visit. However, with the merger, Discover customers may soon have access to hundreds of Capital One branches, an increased ATM network, more than 16,000 cash deposit locations, and 55 iconic Capital One Cafes.
Account security
Discover Bank takes account security seriously. The bank offers several measures to protect customers' funds and personal information. All Discover Bank accounts are FDIC-insured up to $250,000, providing peace of mind in case of a bank failure.
Additionally, Discover Bank uses advanced encryption technology, fraud monitoring, and secure login options (such as biometric authentication) to safeguard customer accounts. The bank also offers a $0 Fraud Liability Guarantee, ensuring that customers are not held responsible for unauthorized transactions reported promptly.
How Discover Bank stacks up
Discover Bank stands out for its competitive rates, lack of fees, and unique cashback checking account. While some online banks, like Ally and Capital One 360, offer a wider range of account options and services, Discover Bank's simplicity and customer-centric approach make it an appealing choice for many.
Here’s a closer look at Discover’s savings account than other online banks.
How we rated this bank
Every bank review we publish has undergone a rigorous editorial process to ensure accuracy and objectivity.
We rate all financial institutions on a 10-point system, with 10 being the highest possible score and 1 being the lowest possible score. We assess each card across several key factors, weighted based on what our research shows matters most to readers like you. Learn more about our methodology here.
Here are some of the factors that influenced this bank’s overall score:
- Interest rates: Discover Bank offers competitive interest rates on its Online Savings Account, money market account, and CDs, although some online banks may provide slightly higher rates on savings accounts.
- Fees: The bank's fee structure is a standout feature, with its "No. Fees. Period." policy eliminating most fees like monthly maintenance, insufficient funds, and excessive withdrawal fees.
- Requirements: While Discover Bank doesn't require a minimum deposit for its savings or checking accounts, the $2,500 minimum for CDs and its money market account is higher than some competitors.
- Product mix: Discover Bank offers various bank accounts and financial products, including student loans, home loans, and retirement accounts. The bank's credit card rewards programs are attractive and do not charge annual fees.
- Customer service: Customer service is strong, with 24/7 phone support and helpful online resources. The potential access to Capital One branches and cafes post-merger could enhance the bank's in-person assistance.
- Digital experience: Discover Bank excels in its digital experience with highly-rated mobile apps. The bank's online banking tools are user-friendly and prioritize financial security.
- ATM & branch access: While Discover Bank lacks physical branch locations, its 60,000+ fee-free ATMs provide decent access to funds. The potential access to Capital One branches post-merger could significantly improve the bank's physical presence.
The bottom line
Discover Bank may not offer the highest interest rates on the market. Still, its incredible reputation and variety of services make it one of the best online banks for managing all your finances.
When choosing a bank, it's essential to consider your financial needs and priorities. While Discover Bank excels in many areas, it may not be the perfect fit for everyone. You can find the best financial partner by carefully evaluating your options and weighing the pros and cons.
Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.