Discover® Bank is an online bank operated by the American financial services company, Discover Financial Services.
With over 50 million cardholders, Discover is a large credit card issuer in the U.S. But does that mean it’s the right bank for you?
In this Discover® Bank Review, you’ll learn about Discover® Bank’s financial products and services to help you decide for yourself.
About Discover® Bank
The Discover Card was first introduced in 1985 by the Sears Financial Network.
In 1999, after a few different owners, the financial institution was officially renamed Discover Financial Services.
In 2000, Discover acquired the Greenwood Trust Company and rebranded it as Discover® Bank.
While Discover is now fully an online bank, the company still owns and operates the original branch of The Greenwood Trust Company in Delaware, making it the bank’s only physical location.
Today, Discover’s headquarters is located just outside of Chicago. The company has over $138 billion in assets under management.
Discover® Cashback Checking
The Discover® Cashback Debit Checking account stands out from most other banks because of the Cashback Debit feature.
You won’t earn interest on your deposits, but with Discover® Cashback Checking, you can earn up to 1% cash back on up to $3,000 of debit card purchases each month. That means you can earn up to $30 per month or $360 per year. (see website for details)
So, if, for example, you spend $2,000 on your card one month, you’ll earn $20 cash back.
By the end of the year, this can add up to a lot of free money. Not a bad deal!
Discover® Cashback Checking also comes with no monthly maintenance fees and minimum opening deposit requirements, so you won’t have to pay anything to open and keep a checking account.
Discover® Online Savings
The Discover® Online Savings Account pays up to 4.30% APY on your deposits, which is one of the best points of this Discover® Bank Review!
If you open a Discover® Online Savings account with $15,000, for example, you’ll be making around $659 per year in APY earnings just to let your money sit there.
Also, like Discover Checking, Discover® Online Savings charges no monthly maintenance fees. This feature alone makes Discover Online Savings appealing.
With so many big national banks charging monthly fees on savings accounts, it’s nice to know that you won’t have to worry about that with Discover.
Moreover, there are no minimum balance requirements, so you don’t have to worry about keeping your account balance over a certain number.
You may get charged a fee if you make excessive withdrawals, though.
Discover® CDs (Certificate of Deposit)
Discover® Bank’s Certificates of Deposit (CDs) offer up to 4.80% APY on deposits.
To open a CD account with Discover® Bank, the minimum opening deposit is $2,500, and you can pick the term length that you prefer.
Here is a summary of the APYs you can earn with a Discover® Bank CD account:
|Discover Bank 1 Year CD
|Discover Bank 18 Month CD
|Discover Bank 6 Month CD
|Discover Bank 9 Month CD
|Discover Bank 2 Year CD
|Discover Bank 30 Month CD
|Discover Bank 3 Year CD
|Discover Bank 4 Year CD
|Discover Bank 5 Year CD
|Discover Bank 7 Year CD
|Discover Bank 10 Year CD
|Discover Bank 3 Month CD
As a quick refresher, CDs are similar to high-yield savings accounts HYSA’s in that you can earn better APYs than traditional checking and savings accounts.
However, the downside to CDs is that you have to lock your money into the CD for the entire term.
If you try to take your money out early, you’ll pay an early withdrawal penalty.
Discover® Money Market Account
The Discover® Money Market Account is similar to high-yield savings accounts (HYSAs), allowing you to earn higher interest rates on your deposits without any early withdrawal penalties.
There are two APYs on the Discover® Money Market Account, depending on how much money you can deposit.
If your balance is over $100,000, you can earn up to up to 4.20% APY; however, if you deposit under $100,000, you’ll earn slightly less.
Both accounts require a $2,500 minimum deposit, and no monthly fees or extra maintenance charges exist.
You can use your money market account to pay bills, write checks, and even take out cash for free at over 60,000 ATMs.
However, there’s a limit to how many monthly transactions you can make (similar to traditional savings accounts), so you don’t want to use it like a checking account.
Discover® Bank offers two types of Individual Retirement Account Certificates of Deposit (IRA CDs): Roth IRA CD and Traditional IRA CD.
Both accounts function like retirement-focused savings accounts, allowing your money to grow at a fixed rate without the risk of losing value due to market volatility.
Roth IRA CD
With a Roth IRA CD, you deposit post-tax money, meaning you’ve already paid taxes.
You can withdraw the funds tax and penalty-free after age 59 ½ if the funds have been in the account for at least five years. If you withdraw before 59 ½, you’ll pay a 10% penalty.
Traditional IRA CD
Discover’s Traditional IRA CDs allow you to deposit pre-tax earnings into the account, similar to traditional IRAs.
As a result, you can save money on your tax liabilities today. The downside is that you won’t be able to touch the money until you retire (without paying an early withdrawal fee).
Both accounts require a $2,500 opening deposit.
IRA Savings Account
Discover® Bank’s IRA Savings Account gives you the same tax benefits you get from the Traditional and Roth IRA CD accounts but with the added perks of a savings account.
This means you don’t have to lock in your funds for a specific term.
Discover® Bank pays a competitive APY on IRA Savings Accounts and has zero monthly fees.
As with most savings accounts, certain account transfers and deposits are limited to six monthly transactions.
You’ll most likely have to pay an excessive transaction fee if you have excessive transactions.
Discover Student Loans
Discover® Bank has a variety of student loans to choose from, including student loans for undergraduates, graduates, MBA students, and parents, among others.
Discover’s student loan accounts come with both variable and fixed rates.
Variable rates range from 6.62% – 16.87% APR, and the interest rates for fixed-rate loans range from 4.49% – 14.99% APR.
One bonus is that Discover offers cash rewards for good grades. College and grad school students with a 3.0 GPA or higher could earn a one-time 1% cash reward bonus.
Terms apply, so be sure to read the fine print.
Discover Personal Loans
Discover® Bank offers personal loans up to $40,000. The interest rates range from 7.99% to 24.99% APR.
You need a minimum credit score of 660 to qualify for a Discover personal loan. If you qualify, there are no fees (other than interest) as long as your payments are on time.
Personal loans, if paid responsibly, can help you take control of your personal finances.
For example, if you carry lots of high-interest credit card debt, it might make sense to take out a personal loan to pay it off with less interest and faster.
Discover Home Loans
Home Equity Loans
Discover® Bank offers Home Equity Loans from $35,000 to $300,000. No fees are due at closing, and you can lock in a fixed APR (from 6.24% – 13.99% APR) for a 10, 15, 20, or 30-year term.
Home equity loans are often used to pay down high-interest credit card debt or cover the costs of home repairs.
Discover’s rates and no-fee structure are competitive. Just make sure you are able to pay back whatever you borrow.
Refinance Home Loans
Existing homeowners can also refinance mortgages with Discover® Bank. Discover offers mortgage refinance from $35,000 up to $300,000.
There are no fees or cash required at closing.
Discover Credit Cards
Discover’s credit cards are the company’s most popular product.
There are no annual fees on any card, and while Discover’s cards are best known for offering cash back, you can also earn travel rewards and other benefits.
Here’s a look at Discover’s top cards:
1. Discover it Cash Back Credit Card
Discover’s It Cash Back Card is Discover’s flagship credit card that pays up to 5% cash back rewards on your everyday purchases (up to the quarterly maximum of $1,500). After that, you’ll earn an unlimited 1% cash back on all other purchases.
2. Discover Travel Credit Card
The Discover Travel Credit Card pays 1.5x miles for every dollar spent on all purchases. This card is unique in that there’s no annual fee. (Most travel rewards cards come with an annual fee). In addition, Discover will match all miles you earn in the first year, so you get double the miles the first year you have the card.
3. Discover Gas & Restaurants Credit Card
The Discover Gas & Restaurants Credit Card pays 2% cash back on up to $1,000 of purchases at restaurants and gas stations. You can also earn an unlimited 1% cash back on all other purchases.
4. Discover Secured Credit Card
The Discover Secured Credit Card is designed for individuals with a below-average credit score or looking to rebuild their credit. This card pays 2% cash back on up to $1,000 in purchases at restaurants and stations.
You can also earn an unlimited 1% cash back on all other purchases. But, because this is a secured credit card, you must put down a refundable security deposit to open an account.
5. Discover Student Cash Back Credit Card
The Discover Student Cash Back Credit Card pays 5% cash back on everyday purchases up to the quarterly maximum and an unlimited 1% cash back on all other purchases.
This one is hard to beat when it comes to credit cards for students.
6. Discover Student Chrome Credit Card
The Discover Student Chrome Credit card pays 2% cash back on up to $1,000 in purchases at restaurants and gas stations and an unlimited 1% cash back on all other purchases.
7. Discover NHL Credit Card
The Discover NHL Credit Card pays 5% cash back on everyday purchases in different categories each quarter, up to the quarterly maximum. After that, you can earn an unlimited 1% cash back on all other purchases.
But why is it called the Discover NHL Card? The card comes in the design of 31 NHL teams, making it a favorite for die-hard hockey fans. You know you’re out there!
Discover® Bank Features
Here are some top features you can expect from Discover® Bank:
- Online Banking: Discover® Bank is entirely an online bank. There’s nothing you can’t do from Discover’s website or mobile app, as both platforms offer a full suite of online and mobile banking products.
- Discover Mobile: Discover Mobile is Discover® Bank’s mobile app, and it’s very well-rated at 4.9 stars (out of 5) in the App Store and at 4.6 stars (out of 5) in the Google Play Store. Some helpful app features include mobile check deposit and locating your nearest free ATM in the app.
- No Annual Fees: One of Discover® Bank’s top selling points is that there are no annual fees on checking accounts, savings accounts, or credit cards. Most big national banks charge fees for these services, giving Discover an edge in the fees category.
- 60,000+ No-Fee ATMs: As a Discover® Bank customer, you’ll have access to a huge network of no-fee ATMs, which makes it easy to take money out from your checking account, savings account, or money market account whenever you need to.
Setting up an account with Discover® Bank is very straightforward. You don’t need to call them because you can quickly do everything online.
When you access the Discover website, click the orange Open an Account button and select the account you wish to open.
Next, confirm whether you’re new to Discover or a current customer.
From there, simply follow the sign-up instructions, and your application should be complete in just a few minutes.
If you have any questions, you can give them a call at 1-800-347-2683.
Discover® Bank promotions
Here are some of the best Discover Bank promotions going on right now:
1. Discover® Cashback Checking - up to $360 bonus
Expires: Limited Time
Discover® Bank, member FDIC, has a cool twist on the old-fashioned debit card: cash back rewards. Open an account online, and they'll give you 1% cash back on up to $3,000 in debit card purchases each month, for up to $360 each year as a bonus to your normal spending. See website for details.
How to earn the bonus
The Discover® Cashback Checking sign up offer requires you to make purchases using the account's card in order to earn the $360 bonus. Full requirements to receive this bonus are:
- Open a new Discover® Cashback Checking account using the link below.
- Use your debit card to earn cashback – up to $30 can be earned per month (see website for details).
- Bonus cash will be deposited into your account each month.
2. Discover® Online Savings Account - up to $200 bonus
Expires: March 14, 2024
Discover® Bank – one of our top picks for online banks – is currently offering up to $200 for opening your first Online Savings account. You'll need to deposit $25,000 to earn the full amount, but $15,000 only results in a loss of $50.
One perk to this bonus is that Discover doesn't have a requirement for how long you need to keep the cash in the account; however, with interest rates soaring, it makes a great place to stash some cash. Doesn't get much easier than that!
How to earn the bonus
The Discover® Online Savings Account sign up offer requires you to deposit and maintain a minimum balance in order to earn the $200 bonus. Full requirements to receive this bonus are:
- Apply for your first Discover® Online Savings Account, online, in the Discover App or by phone using promocode BBRP124.
- Within 30 days, post deposits of at least $15,000 to earn $150 or $25,000 to earn $200.
- Bonus will be credited to your account within 60 days of qualifying for the bonus.
- See Advertiser Website for Full Details
3. Discover it® Cash Back Credit Card - Cash Back Match bonus
The Discover it® Cash Back credit card offers new cardholders a bonus 2X "Cashback Match" on all cash back earned in the first year. This means that if you earned $150 in cash back, Discover will give you an additional $150.
You'll be automatically enrolled when you open your new account, and there's no limit to how big of a bonus you can earn.
Keep in mind that this deal is in addition to the 0% intro APR that both cards offer for the first 15 months.
How to earn the bonus
The Discover it® Cash Back Credit Card sign up offer requires you to make purchases using the account's card in order to earn the Cash Back Match bonus. Full requirements to receive this bonus are:
- Apply for a new Discover it® Cash Back or Discover it® Chrome credit card using the link below.
- For the first year, use your credit card to earn cash back: for Discover it® Cash Back, you'll earn 5% in rotating categories, 1% on everything else; for Discover it® Chrome, you'll earn 2% at gas stations and restaurants, 1% on everything else.
- After 12 consecutive billing cycles, bonus cash will be credited to your rewards account within 2 billing cycles.
Discover® Bank is FDIC-insured, which means that deposits are protected up to $250,000. As an online financial service, the bank takes cybersecurity seriously.
The bank uses leading Secure Socket Layer (SSL) encryption technology and enhanced account verification to keep your data safe, among other security measures.
Discover also constantly monitors for fraud and sends alerts if anything strange happens with your account.
Customer Service & Support
Discover® Bank offers 24/7 U.S.-based phone support, so it’s easy to speak with someone whenever you need help.
If you’re not in the mood to call in, you can also send and receive customer support messages from the Discover Mobile app.
Overall, Discover® Bank has a solid reputation for customer service. There are some disgruntled customers out there (which you can read about on TrustPilot), but you can expect to find this with any bank that services millions of customers.
While Discover® Bank has a poor Trustpilot rating of 1.8 out of 5-star rating majority of the negative reviews we are seeing spawn from issues with Discover credit card holders. Here is what some customers of a Discover® Bank account have to say:
Discover® Bank & credit card are wonderful. Their security is top-notch. They let me know right away even a small $29 amount was posted to my card. When I’m on the road, they call me right away if they think someone else is using my card. Customer service always looks for helpful options for me. And the bank texts my balance every day so no glitches like BofA occur. I’ve had Discover for years. Five stars all the way!
Mrs. D Trustpilot
I have had two loans from this company, easy process and a fair rate.
Kent Sajack Trustpilot
Pros and Cons
Now that you’re up to speed with all of Discover® Bank’s products and services, let’s take a look at some of the pros and cons of joining this bank.
- No annual fees
- Competitive interest rates on savings and money market accounts
- Excellent online banking experience
- Great for students
- Solid credit card portfolio
- No brick-and-mortar banks
- Not the best sign-up bonuses
Alternatives to Discover® Bank
When it comes to online banks, some of the main alternatives to Discover® Bank are:
Frequently Asked Questions
Is Discover® Bank a real bank?
Yes, Discover® Bank is a real bank. Even though they don’t have physical branches, Discover® Bank is an online bank and financial institution.
Is the Discover app safe?
Yes, the Discover Mobile app is safe to use and features SSL encryption technology, making it virtually impossible for someone to access your information.
Is Discover® Bank federally insured?
Yes, Discover® Bank is FDIC-insured, so your deposits are protected up to $250,000.
Is Discover® Bank Right for You?
If you want to avoid fees and have all your banking products in one place, Discover® Bank might be just what you’re looking for, as we’ve discovered in our Discover® Bank Review.
The bank also offers competitive rates, with high yield on savings accounts, putting it up there among the top-ranking options.
On the flip side, if you are the type of person who wants to develop a face-to-face experience with your banker, you should probably look into a big national bank with thousands of brick-and-mortar locations.
At the end of the day, it all comes down to what you want and expect from your bank. Once you can answer that, the choice will be more obvious.