Discover Bank Review: Competitive APY, 24/7 Customer Service

· Discover Bank review: Competitive interest rates with 24/7 live customer service ; Discover Online Savings Account · 1.80% APY. A tooltip. Rates 

The bottom line: Discover is a strong online bank, as long as you can afford the opening deposits for a CD or money market account.

Overall bank rating

Pros and cons

The Discover Online Savings Account is a worthwhile option for a no-fee savings account. There’s no monthly service charge and no insufficient funds charge. Discover pays a competitive rate on your savings account balance, and it doesn’t require an initial deposit to open the account.

Discover Cashback Debit Account

It isn’t very common to find a debit card that offers cash back rewards, but Discover lets you earn 1% cash back on up to $3,000 of purchases per month. There are also no monthly service fees with Discover. However, if you enroll in overdraft protection that links your checking to another Discover account, this can be a great low-cost checking account.

You have access to 60,000 ATM locations with Discover, but the bank doesn’t reimburse any out-of-network ATM fees charged by ATM providers.

Discover CD

Discover offers a wider range of CD terms than many competitors — most offer terms up to 5 years, but Discover also has 7-year and 10-year terms. However, it doesn’t offer any unique types of CDs, like no-penalty CDs.

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Discover pays competitive rates on CDs, but you’ll need $2,500 to open a Discover CD. While this is lower than some banks’ requirements, plenty of online banks require significantly less.

Discover Money Market Account

The Discover Money Market Account gives you easy access to your money with a debit card and paper checks. You’ll earn 1.70% APY if you have an account balance under $100,000. If you have an account balance over $100,000, the rate increases to 1.75% APY.

You’ll need at least $2,500 to open an account, though. Discover has 60,000 free ATMs, but it doesn’t reimburse any out-of-network fees charged by ATM providers.

How Discover Bank works

Discover’s website is easy to navigate, and its mobile app has received 4.5 out of 5 stars in the Google Play store and 4.8 stars in the Apple store.

Once you set up an online account, you can chat 24/7 with a live customer service representative. Discover also provides 24/7 customer service over the phone.

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You have access to a debit card with both the checking and money market account. You can use 60,000 ATMs for free, but unlike some competitors, Discover doesn’t reimburse any fees charged by out-of-network ATM providers.

Your Discover Bank account is FDIC insured for up to $250,000, or up to $500,000 for a joint account.

Discover trustworthiness and BBB rating

Discover Bank has received an A+ rating from the Better Business Bureau. A strong BBB rating signifies the company is transparent in how it handles business, responds effectively to customer complaints, and is honest in its advertising.

Some other big-name banks — think Bank of America, Wells Fargo, and Chase — have faced public scrutiny in the past few years for issues like discriminatory lending, fake accounts, and wrongful trading. Discover Bank hasn’t had any major scandals in recent years, though.

How Discover Bank compares

We’ve compared Discover to two other online banks: Capital One 360 and Ally.

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Between the three banks, Ally pays the highest interest rate on a savings account, while Capital One and Discover pay higher rates on CDs. Keep in mind rates can change, though.

Your decision between these three financial institutions may largely depend on minor differences between different accounts.

If you’re searching for a variety of CD options, you might prefer Discover to Capital One or Ally. Discover has CD terms up to 10 years, the greatest variety of the three.

You also might prefer Discover if you want a rewards checking account. Capital One and Ally offer good checking accounts but neither provides cash back features.

If you don’t have a lot of money to deposit into a CD, Capital One or Ally may be more suitable options. With Discover, you’ll need to deposit at least $2,500 into a CD. Capital One and Ally don’t require a minimum opening deposit, though.

Ally also might be the strongest contender if you’re planning to get a money market account. While Discover and Ally pays similar rates on money market accounts right now, Ally let’s you open an account with $0 while Discover’s money market account requires a minimum of $2,500 or more. Also, Capital One doesn’t have a money market account.

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