Discover Bank Review: Fewer Fees with Plenty of Features

Name: Discover Bank Review: Fewer Fees with Plenty of Features
Item: Discover Bank
Rating: 8.5

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Last Updated:January 22, 2024

Discover Bank Review: Fewer Fees with Plenty of Features

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Discover Bank is one of many online banks offering unique checking and savings account features.

8.5/10

Costs

8.5/10

Features

8.5/10

Ease of Use

8/10

Service

8/10

Checking, savings, and certificates of deposits are widely available through many banking options, so is Discover Bank worth considering? With a reputation for excellent customer service and user-friendly online tools, Discover Bank has made a compelling argument for anyone who wants to move their money management online.

Discover Bank offers an extensive range of banking products, including savings accounts, checking accounts, and CDs, which offer competitive interest rates to help your money grow. Plus, there are no monthly fees, minimum balance requirements, and access to ATM fees at over 60,000 locations; you may save even more compared to Discover Bank’s competitors.

How does Discover Bank work?

Discover Bank has no physical locations, so almost all account management — from opening an account to making deposits — takes place entirely online. Discover Bank offers four major checking and savings options.

Checking

Discover offers one checking account option, the Cashback Debit account. Accountholders earn one percent cash back on up to $3,000 in monthly debit card purchases. You can access all aspects of your account online or with the user-friendly mobile app.

Savings

Discover Bank offers a high-yield savings account option, where interest compounds daily, you’re paid monthly dividends, and you can earn a 4.25% annual percentage yield (APY). There is no minimum to open an account with this savings account. You can open this account online or by calling customer service (open 24/7) for assistance opening a savings account. It’s also eligible for the overdraft protection feature offered.

Certificates of Deposit (CDs)

Another savings option is a CD from Discover Bank. They offer multiple term length options, ranging from three months to 10 years. Some of the terms feature CD rates up to 4.90% APY too. The CDs require a minimum deposit of $2,500 and are subject to early withdrawal fees. You can fund the CD with an online transfer, a phone transfer, a mobile check deposit, or mailing in a check with the account number listed. There are other CD options, too, including IRA CDs.

Money market accounts

For those who want the convenience of a checking account but earn interest like a CD or savings account, a money market account is another solution. These accounts offer a debit card or check but currently offer a 4.15% APY for balances under $100,000 (and 4.20% if the balance is over $100k). You need a minimum of $2,500 to open the account, but there’s no minimum monthly balance requirement.

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How much does Discover Bank cost?

Here’s where Discover Bank sets itself apart from the competition: the fees with the most popular accounts are minimal, if any at all.

This means there are $0 fees for:

Maintaining a minimum account balance
Monthly maintenance
Overdraft fees
Insufficient funds
Use of 60,000 fee-free ATMs
Stop payment orders
Excessive withdrawals or transactions
Expedited delivery for bank checks
Account closure

One fee worth mentioning is the outgoing wire transfer charge. If you send either a domestic or international wire transfer, be prepared to pay $30 per transaction.

If you access your money before the end of the term, certificates of deposit may charge early withdrawal fees.

Discover Bank features

Let’s look at some of the most popular features of Discover Bank.

No monthly fees

Unlike many traditional banks, Discover Bank does not charge monthly maintenance fees, which can slowly chip away at your budget or savings goals. Plus, there are no other fees that you might expect, such as overdraft protection, stop payments, or other types of transactions.

No minimum balance requirements

You won't have to worry about maintaining a specific balance in your checking or savings accounts.

Wide fee-free ATM network

Discover Bank provides access to over 60,000 ATMs nationwide without charging fees, making it convenient to withdraw cash whenever needed.

Cashback rewards

Discover Bank's Cashback Debit account allows you to earn cashback on debit card purchases, providing an extra incentive for everyday spending. You earn 1 percent on up to $3,000 in monthly purchases.

Overdraft protection

They offer various overdraft protection options to help you avoid unnecessary fees and ensure your transactions are covered when funds are low for both the checking and savings accounts.

Competitive interest rates

Discover Bank offers attractive interest rates on its savings accounts, money market accounts, and CDs. Many of the rates available are multiple times the national average (the current national average for savings is 0.57%).

User-friendly mobile app

Discover Bank is an online bank, meaning its digital tools must meet high user expectations. Their mobile app offers a seamless banking experience, enabling you to perform transactions, deposit checks, and manage accounts easily.

Security features

Discover Bank employs robust security measures to protect your personal and financial information, giving you peace of mind while banking online.

24/7 customer service:

Even in today’s digital world, sometimes we need the human touch. Discover Bank is known for its exceptional customer service, providing support and assistance whenever you need it on the phone, 24/7, 365 days a year.

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Pros and cons

Pros

No overdraft fees for a Discover Cashback Debt, online savings, or money market account.
No monthly fees
CDs offer competitive APYs
Free nationwide ATM network
Online checking accounts offer early payday, where you get access to your paycheck up to two days before payday with direct deposit

Cons

Limited physical branches
Steep $2,500 minimum to open a CD account
$2,500 minimum for a money market account opening deposit
High $30 wire transfer fee for outgoing wire transfers

Who is Discover Bank good for?

Those with direct deposit

The EarlyPay feature with DiscoverBank is certainly a big perk. Getting access to your money up to two days in advance with a direct deposit can be a lifeline when money is tight. While other banks and financial institutions offer these perks, when you combine it with the low or no fees, it makes it ideal for almost anyone with a regular paycheck.

Anyone worried about the occasional overdraft

If you’ve ever overdrafted an account, you know it’s like rubbing salt into a wound when you’re hit with the additional overdraft fee when you were likely short on funds.

Who shouldn’t use Discover Bank?

If you want in-person service

Discover Bank’s options are suited for anyone comfortable with online banking and almost every transaction can be handled online or through the app. However, keep in mind Discover offers 24/7 customer service, so if you run into an issue, you can likely get someone on the phone quickly.

If you need to make frequent wire transfers

Although it has limited fees, Discover Bank does charge a rather high $30 outgoing wire transfer fee. This can quickly add up if you need to make frequent domestic or international wire transfers.

Discover Bank vs. competitors

Bank	Monthly fee	Savings APY	Overdraft protection	Early paycheck access
Discover Bank	$0	4.25%	Yes	Yes, up to two days
American Express	$0	4.25%	No	No
Ally Bank	$0	4.20%	Yes	Yes

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FAQs

Is Discover Bank safe to use?

Discover Bank is part of the Federal Deposit Insurance Corp. (FDIC) financial institutions network, so each depositor is insured up to $250,000 per account if the bank were to go under.

Can you deposit cash in person with Discover Bank?

Discover Bank does not accept in-person cash deposits since it’s an online bank. However, one option is purchasing a money order with your cash and depositing the money order through the mobile app.

Does Discover Bank have physical branches?

Discover Bank has no physical branches and is only an online banking option. You can deposit via the mobile app, online transfer, wire transfer, direct deposit, or mailing a check. Withdrawals are available through wire transfers, bank checks, online transfers to external banks or other Discover accounts, plus the ATM network.

The bottom line

Discover Bank is a solid banking option for anyone who prefers the convenience of online banking. Not only are the fees kept to a minimum with a checking or savings account, but the 24/7 customer service ensures you have someone to assist you if you do run into any issues with your checking or savings.

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Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.

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