The online bank also has high-yield savings and CDs as well as free access to a broad ATM network. Although it only has one physical branch, the bank’s services might make up for it.
The bottom line
- A checking account that earns cash back
- Some of the best savings rates
- Only one branch location
|Certificates of deposit (CDs)|
4.5 / 5.0
Free checking is hard to come by and rewards checking even more so. Discover’s Cashback Checking is both. Add in an extensive ATM network and this account almost earns a perfect 5 stars.
But there are two caveats. To apply for Discover checking, you need to have another Discover account, such as a credit card or savings account. And getting the maximum cash back of $10 per month might be difficult if you’re not a frequent spender. The 10 cents per debit card swipe, bill pay or check means you’d need to make 100 transactions. That’s more than three qualifying transactions every day. If you want an easier way to earn cash back, credit cards may be a better option.
As is standard among online banks, Discover doesn’t let you deposit cash; the one exception is at its single branch location, in Delaware.
5.0 / 5.0
Discover’s savings account has a competitive annual percentage yield, and no fees and no minimum opening deposit requirement make it a simple and stress-free account to use. Plus, you can earn a bonus.
Certificates of deposit
5.0 / 5.0
Discover’s CD rates are highly competitive, but they require a higher opening deposit than some other banks. Term lengths vary from three months to 10 years, and you stand to earn more money on longer terms.
» MORE: Best CD rates
Discover customer experience
4.0 / 5.0
The bank’s website shows rates and fees clearly, and the mobile app on iOS and Android phones receives high ratings. If you need help, you can reach a representative by mail, or 24 hours a day by phone, email or Twitter.
Discover’s main downside is standard among online banks: There’s no network of physical locations.
Discover overdraft fees
3.5 / 5.0
Discover Bank charges a nonsufficient funds $30 fee if you try to make a transaction without enough funds in your account. But only one fee is charged per day, regardless of the number of transactions. At other institutions, an overdraft fee might be charged multiple times in a single day, potentially adding up to hundreds of dollars.
You can avoid a fee altogether with free automatic transfers from a linked savings or money market account. However, if you can’t cover the overdraft with the linked account either, you’ll still be charged the $30 fee. These transfers don’t apply to ATM withdrawals or debit card purchases, which would be declined without a fee charged.
Money in your pocket
Discover Bank’s free ATMs and fee-free services mean you keep more money in your pocket. And the $10 monthly cash-back rewards are a rare perk.
Discover’s a good option, but 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.
Melissa Lambarena is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @LissaLambarena. NerdWallet writer Spencer Tierney contributed to this report.
Updated May 23, 2017.
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.