Discover Bank Review: Checking, Savings and CDs

Discover Bank
NerdWallet’s rating: 4.5 / 5.0

If you ever wished you had a nickel for every time you used your debit card, now you can have two. Discover Bank gives you 10 cents each time you swipe, pay a bill online or write a check, up to $10 per month. That’s as much as some other banks charge as a maintenance fee.

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at Discover

Discover also offers strong rates on its savings products, although the cost of admission is a bit high. And it’s an online bank with only one physical branch, so it’s best for those who don’t require too much personal attention — but its broad ATM network gives users easy access to services.

Discover bank might be right for you if:

• You prefer using a card to cash.
• You typically manage your money via phone or computer.
• You have $500 you can use to open a savings account.

Our ratings

Checking accounts
Savings & money market accounts
Certificates of deposit (CDs)
Customer experience
Other fees
Overall

Read on for more information about Discover Bank’s checking and savings products, CDs, customer experience and fees.

Checking account

4.5 / 5.0
Discover Bank’s low-fee checking account lets customers earn up to $10 per month in cash back. But it’s impossible to deposit cash from anywhere but the lone physical branch in Delaware. And you have to have another Discover account — credit card or savings — already to enroll.

Pros	Cons
Doesn't charge a monthly maintenance fee or have a minimum balance requirement. Provides 60,000 ATMs, and won’t charge fees for using out-of-network ATMs (though ATM owner's fees might apply). Pays up to $10 in cash back per month. Offers free checks.	Doesn't allow ATM cash deposits. Doesn't pay interest. Has only one physical branch. Offers only one checking account.

» MORE: NerdWallet’s best online checking accounts

Savings and money market accounts

4.5 / 5.0
Discover’s savings and money market accounts are competitive, although you can find slightly better rates elsewhere. And though it’s not too high, the $500 minimum deposit requirement is a bit heftier than those at other banks.

Pros	Cons
Pays 0.95% APY for savings accounts and 0.80%-0.85% for money market accounts. Doesn't charge a monthly fee or have a balance requirement for savings customers. Earn up to $100 with a minimum qualifying deposit (details below).	Requires high minimum opening deposits: $500 for savings, $2,500 for money market accounts. Charges a $10 monthly maintenance fee for money market accounts that don't keep a minimum balance of $2,500.

» MORE: NerdWallet’s best savings accounts

Certificates of deposit

4.5 / 5.0
If rates are your biggest consideration, other banks can beat Discover Bank’s CDs. Still, its rates are competitive — though again, it requires a higher opening deposit than some other banks.

Pros	Cons
Pays competitive APYs of 0.35% to 2.30%. Offers term lengths of between three months and 10 years.	Requires a high opening deposit of $2,500. Charges early withdrawal penalties. Renews mature CDs automatically after a 9-day grace period.

» MORE: Best CD rates

Customer experience

4.0 / 5.0
Discover Bank is best for those who prefer banking online. You can reach a representative by mail, or 24 hours a day by phone, email or Twitter.

If you’re looking for the best mobile banking experience, you might be disappointed. Discover Bank’s app offers basic functions, along with remote check deposit, but it doesn’t let you perform person-to-person money transfers or provide a digital wallet.

Other fees

4.0 / 5.0
You can set up overdraft transfers by linking your checking account to a Discover Bank savings account. Otherwise, you might incur a $30 fee for insufficient funds. And if you do open a savings account, watch out for the $15 withdrawal limit fee the bank charges if you exceed six monthly transactions.

Money in your pocket

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at Discover

Discover Bank’s free ATMs, free checks and fee-free services mean you keep more money in your pocket. Plus, the $10 cash-back reward can shake out to more than other banks’ premium accounts pay in interest, and it’s not too difficult to earn: 100 transactions works out to about three card swipes or bill payments per day.

If checking account rewards are what you’re after, shop around to ensure that you’re getting the best deal based on your spending habits. But Discover Bank is a good option.

Melissa Lambarena is a staff writer at NerdWallet, a personal finance website. Email: mlambarena@nerdwallet.com. Twitter: @LissaLambarena.

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SAVINGS ACCOUNT PROMOTION

Discover Bank says: “To get your $100 Bonus: What to do: Apply for your first Discover Online Savings Account (OSA) by 07/15/16. Enter Offer Code NW616 when applying. Deposit at least $15,000 by 08/01/16. What to know: Offer not valid for existing or prior Discover savings customers. Account must be open when bonus is credited. Bonus will be credited to the account by 08/31/16. Bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice.”

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RATINGS METHODOLOGY

For banks and credit unions, NerdWallet’s overall rating is a weighted average of each subcategory: checking accounts, savings and money market accounts, CDs, customer experience and other fees. Factors we consider, depending on the subcategory, include rates and fees, ATM and branch access, account features and limits, user-facing tech and customer service. Several Nerds contribute to each financial institution’s ratings to ensure consistency and accuracy.

What the ratings mean:
— Among the very best
— Very good; only minor caveats for most customers
— Good; issues that might make a difference to some customers
— Fair; make sure strengths and weaknesses are a good match for you
— Poor; proceed with great caution
(or below) — Best to avoid