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Discover Bank Review

The card issuer's online banking arm has good bones—but bare bones

By Jackie Lam

Updated November 21, 2024

Reviewed by

Khadija Khartit

Fact checked by

Matthew M Klammer

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A division of Discover Financial Services—the company best-known for its pioneering cashback credit card—Discover Online Banking began offering accounts in 2013. Virtually, a digital institution, it operates online, through its app and via a vast network of more than 60,000 ATMs.

Pros & Cons
Company Overview

Pros & Cons

Pros

Cash-back bonus on debit card purchases
No fees
Large ATM network

Cons

Only one brick-and-mortar branch

Company Overview

Year Founded 1911
Official Website www.discover.com
Banking Products Offered Savings, checking, CDs, MMA
Customer Support 24/7 Phone: 1-800-347-7000

Pros Explained

Cash-back bonus on debit card purchases. Cash back on credit cards is pretty standard, but Discover rather uniquely offers a 1% cash-back bonus on anything you buy with your debit card, up to $3,000 in purchases a month. You could potentially earn up to $360 annually.
No fees. Discover Bank's checking account boasts no fees—no monthly minimum fees or fees for insufficient funds. Plus, you won’t get dinged with a charge for returned items, or should you close your account. Additionally, there is no minimum deposit to open a CD.
Large ATM network. The Discover debit card is accepted at 415,000 ATMs in the U.S overall. Account-holders can make withdrawals at no charge at some 60,000 ATMs belonging to the Allpoint and MoneyPass networks. Using a machine outside these networks might incur a surcharge imposed by the ATM owner. Discover itself, however, never charges a fee for ATM use.

Cons Explained

One brick-and-mortar location. True to its name, Discover Online Banking has but one actual branch—in Greenwood, Delaware. So if you like face-to-face contact, this isn't the institution for you.

What Is Discover Online Banking Best For?

Discover Online Banking should be a good fit for those seeking a digital bank that offers a suite of different services.

It might be a particularly good fit for those who:

Prefer paperless, digital transactions
Hate paying fees
Typically use their debit card for day-to-day transactions
Prefer to bank with an established "name" financial institution

What Does Discover Online Banking Offer?

As you might expect from the banking division of a major financial services company, Discover Bank offers an array of products and services:

Checking account
Savings account
Money market account
Certificates of Deposit
IRAs

Discover Checking Account

A major feature of the Discover Checking Account is its cash-back debit card. The 1% cash-back reward strictly applies to purchases, though. ATM transactions, money orders, loan payments made with your debit card, and payments using peer-to-peer platforms aren’t eligible for cash-back rewards.

Besides cash-back on your cards, there are no monthly maintenance fees, insufficient funds, or a fee for returned items or stop payment orders. There’s no minimum to open an account, and there’s no monthly minimum balance to keep the account open.

Other perks include free checks.

Digital-only banks like Discover's only allow you to withdraw cash from ATMs; you can't deposit cash or physical checks. Discover lets you deposit paper checks via its mobile banking app, or by mail to a Salt Lake City processing center.

Discover Savings Account

Like the checking account, Discover Savings Account doesn't require any minimum to open or maintain the account. As of November 2024, the annual percentage yield (APY) is 3.90%, which is higher than the average national savings rate of 0.45%.

Discover Bank’s no-fees features apply here too: The account is free of no monthly maintenance or insufficient funds charges.

Discover Money Market Account

Similar to the Discover Savings Account, the Discover Money Market account does not require any minimum to open the account. There are two interest rates: If your balance is less than $100,000, you’ll earn an APY of 3.70%. If it’s $100,000 or more, you’ll get a slight bump to 3.75%.

Once opened, the account generates 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 they’re a deposit account that generates interest on your money. However, you can typically withdraw funds more easily, usually via a linked debit card; the account may also come with check-writing privileges.

Discover Certificate of Deposit (CD)

Discover’s high-yield certificates of deposit (CD) give you the option of tucking away a sum of money for a set amount of time. CDs usually earn a higher interest rate than a standard savings or checking account. And the longer your term, the more you can earn. There is no minimum deposit to open a CD. Discover’s high-yield CDs range from three months to 10 years, and the interest rates are as follows:

Discover Bank CD Rates
Term	APY
3 Months	2.00%
6 Months	3.70%
9 Months	3.80%
12 Months	4.10%
18 Months	3.80%
24 Months	3.60%
30 Months	3.50%
36 Months	3.50%
48 Months	3.40%
60 Months	3.40%
7 Years	3.40%
10 Years	3.40%

As of Nov. 21, 2024

Should you need to take your money out early, you’ll get hit with an early withdrawal penalty. How much you’ll get dinged depends on the term of the CD:

Discover Bank CD Early Withdrawal Penalties
Term	Early Withdrawal Fee
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 needs to be open for at least eight days before you can pull money.

Discover IRAs

Discover offers both an Individual Retirement Account CD and an IRA Savings Account. The IRA CD offers APYs comparable to those of the regular CDs. The IRA Savings has no minimum and currently offers a 3.90% APY. The retirement accounts can be either traditional or Roth IRAs.

Discover Credit Cards

Discover has a handful of no-annual-fee credit cards in its network, including a travel card, student card, and gas and restaurant card. Technically speaking, though, these cards are not part of Online Banking but offered through another division of its parent, Discover Financial Services, rather confusingly known as Discover Bank. You don't need to be an Online Banking customer to apply for a Discover credit card; nor does being an Online Banking account-holder or grant you special access to these cards.

Cash-Back Cards

General Travel Rewards Cards

Discover it Miles

Secured Credit Cards

Discover it Secured Credit Card

Other Financial Services Offered by Discover

As with the credit cards, the products listed below are technically offered not through Online Banking, but since they are part of Discover Financial Services, the parent company, we list them here as a service.

Home equity loans
Refinanced mortgages
Personal loans
Student loans
Debt consolidation

Discover Bank Customer Service

Discover Online Banking offers 24/7 customer phone support, 365 days a year at 1-800-347-2683 —with reps based entirely in the U.S., as the company likes to emphasize. You can also reach out to customer support by 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 J.D. Power 2022 U.S. Credit Card Satisfaction Study, among credit card issuers, Discover has the second highest ranking with a score of 841. And per the J.D. Power 2022 U.S. Banking Mobile App Satisfaction Study, Discover also ranked in first place in online credit card satisfaction.

In 2012, Discover Financial Services paid out $200 million to 3.5 million customers for deceptive practices—such as enrolling clients in products like its payment protection plans, without their permission. Discover also paid a civil fine of $7 million both to the Consumer Financial Protection Bureau's (CFPB) Civil Penalty Fund and to the U.S. Treasury.

How to Bank With Discover Online Banking

Opening an Online Bank account is a simple and straightforward process. Whether you’re an existing Discover customer (a card-holder, loan borrower) or are a new one, you can open an account online in minutes.

Final Verdict

Discover Online Banking is an excellent option for those who feel comfortable with a completely digital financial platform. The generous cash-back bonus on its debit card, lack of fees, and around-the-clock service make it a standout in many ways. The interest rates offered on its accounts are competitive. However, Discover Online Banking's options are limited to the bare bones of banks: checking, savings, certificates of deposits, 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 do offer some of these options, it's not clear if there's much interaction among them—and if using one product benefits you with getting another. Likewise, if you like to do your banking in person, Discover Online Banking probably isn't for you. The company's customer reps are friendly and knowledgeable, but it's not the same as developing a relationship with the personnel at a physical branch.

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of banks. We collected more than 20 data points across more than 80 banks including products available, interest rates, fees, and accessibility to ensure that our content helps users make the right decision for their savings and banking needs.

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Article Sources

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Discover Bank. "ATM Locator."
Discover Card. "How to Use Your Debit Card Cash Back to the Fullest."
Discover. “Online Savings Account.”
FDIC. "National Rates and Rate Caps."
Discover Bank. "Money Market Account With High Interest Rates."
Discover Bank. "CD Rates."
Discover. “IRA Savings.”
J.D. Power. "2022 U.S. Credit Card Satisfaction Study."
J.D. Power. "2022 U.S. Banking and Credit Card Mobile App."
Consumer Financial Protection Bureau. "Federal Deposit Insurance Corporation and Consumer Financial Protection Bureau Order Discover to Pay $200 Million Consumer Refund for Deceptive Marketing."