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Discover Bank Review: Checking, Savings and CDs

Oct. 12, 2018
Banking, Banks & Credit Unions, CDs, Checking Accounts, Savings Accounts
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NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

NerdWallet rating: 4.5/5.0

Where Discover shines:

  • $150 and $200 bonus.
  • 1% cash-back rewards checking account.
  • Competitive savings rates.
  • No monthly maintenance fees.
  • Large ATM network.

Where Discover falls short:

  • Only one physical branch location.

Where Discover shines:

  • $150 and $200 bonus.
  • 1% cash-back rewards checking account.
  • Competitive savings rates.
  • No monthly maintenance fees.
  • Large ATM network.

Where Discover falls short:

  • Only one physical branch location.

Where Discover shines:

  • $150 and $200 bonus.
  • 1% cash-back rewards checking account.
  • Competitive savings rates.
  • No monthly maintenance fees.
  • Large ATM network.

Where Discover falls short:

  • Only one physical branch location.

 

The bottom line

Discover

at Discover,

Member, FDIC

With Discover Bank checking, you can earn cash back on qualifying debit card purchases each month. The online bank also has a high-yield savings account that offers a $150 or $200 bonus, along with free access to a broad ATM network. Customers who really prefer to do their banking in person won’t like that Discover has only one physical branch. 

Best if: You’re looking for rewards checking and a high-yield savings account.


Read on for details on Discover Bank’s checking, savings, CDs, bank experience and fees.

Checking: 4.5/5.0

Discover’s Cashback Debit is a rewards checking account that lets you earn 1% cash back for certain debit card transactions, on up to $3,000 in purchases.

More upsides:

No monthly fee: It’s rare to find a rewards checking account with no monthly service charge. Discover Cashback Debit offers this benefit, along with no monthly balance requirement.

Large ATM network: The account offers access to over 60,000 fee-free ATMs.

Annual fee forgiveness: The bank will waive one fee per calendar year: a stop-payment or insufficient-funds fee.

There is a downside for those unwilling to let go of face-to-face banking:

One physical branch:  Unless you live near Greenwood, Delaware — where Discover Bank has its only branch — you’ll need to do your banking online.


How does Discover compare?

Discover

Cashback Debit

NerdWallet Rating

at Discover,

Member, FDIC

APY

N/A

Monthly Fees

$0

Bonus features

No Monthly Fee

10,000+ ATMs

Live help 24/7

Axos Bank™

Rewards Checking

NerdWallet Rating

at Axos Bank™,

Member, FDIC

APY

1.25%

Monthly Fees

$0

Bonus features

No Monthly Fee

No overdraft/NSF fees

ATM reimbursements

Chime

Spending Account

NerdWallet Rating

at Chime,

Member, FDIC

APY

N/A

Monthly Fees

$0

Bonus features

No Monthly Fee

No overdraft/NSF fees

10,000+ ATMs

Not for you? Read more bank reviews

Savings: 5.0/5.0

The Discover online savings account earns an attractive 1.90% annual percentage yield, one of the best rates around.

More upsides:

No monthly fee: You won’t have to pay maintenance charges for this account. There are also no minimum balance requirements to earn interest.

Bonus: First-time savings customers are eligible for a bonus of $150 or $200.

Here’s a drawback:

Required deposit: To be eligible for the $150 or $200 bonus, the deposit requirement is a fairly hefty $15,000 or $25,000, respectively.


CDs 5.0/5.0

The upside:

High rates:  Discover Bank offers competitive terms on CDs, including 2.65% APY on three-year CDs and 3.00% APY on five-year CDs.

A downside:

High minimum: You’ll need at least $2,500 to open a CD.

» Want to compare rates? See our list of best CDs this month

Overdraft fees: 3.0/5.0

Discover Bank charges a $30 fee for insufficient funds transactions.

Some upsides:

Annual fee forgiveness: The charge is eligible for the bank’s fee forgiveness program, which waives one charge each year.

Daily fee limit:  Your account is charged once a day for insufficient funds transactions, regardless of the number of items attempted. At other institutions, this type of fee is charged per item, multiple times a day. That could add up to hundreds of dollars in fees.

Free transfers from linked accounts: You can sign up to have free automatic transfers from a linked savings or money market account. If you have the funds in your backup account, the transfer would cover the cost of a transaction that would otherwise overdraw your checking account.

A downside:

The $30 fee: Online banks generally have low fees. But this one is close to the $35 to $38 overdraft fee that many large banks charge.

Bank experience: 4.0/5.0

The upsides:

Highly rated apps: Discover’s mobile banking apps receive high ratings from customers. The iOS version receives 4.8 stars out of 5; the Android app receives 4.6 stars out of 5.

24/7 live customer service: Representatives are available by phone every day. You also can reach the bank through mail and social media.

The downside:

One branch: Discover’s only branch location is in Greenwood, Delaware.

Discover

at Discover,

Member, FDIC

Money in your pocket

» Ready to take the next step? Discover Bank’s rewards checking and high savings rates mean you can keep and grow more of your own cash. The large ATM network is also a nice perk. If you don’t need to drive to a branch on a regular basis, this bank is worth a look.


Ratings methodology

NerdWallet’s overall ratings for banks and credit unions are weighted averages of several categories: checking, savings, certificates of deposit or credit union share certificates, customer experience and overdraft fees.

Factors we consider, depending on the category, include rates and fees, ATM and branch access, account features and limits, user-facing technology, customer service and innovation.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.