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Discover Bank Review: Checking, Savings and CDs

December 20, 2017

Banking, Banks & Credit Unions, CDs, Checking Accounts, Savings Accounts

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Discover Bank
NerdWallet’s rating: 4.5 / 5.0

Wish you got some money back every time you used your debit card? Discover Bank gives it to you: 1% each time you make a qualifying purchase, on up to $3,000 a month.

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

Some of the best savings rates around
Checking comes with a rewards program
Only one branch location

Checking

4.5 / 5.0

Free checking is hard to come by and rewards checking even more so. Discover’s Cashback Checking¹ is both. You’ll receive 1% cash back on qualifying debit card purchases, on up to $3,000 a month. Add in an extensive ATM network and this account almost earns a perfect 5 stars.

As is standard among online banks, Discover doesn’t let you deposit cash; the one exception is at its single branch location, in Delaware.

Pros	Cons
No monthly maintenance fee or minimum balance requirement Free access to more than 60,000 ATMs 1% cashback on qualifying debit card purchases up to $3,000 a month	Doesn't handle cash deposits nationally Doesn't earn interest Has only one physical branch

Account reviewed for rating: Discover Cashback Checking

» Take a look at NerdWallet’s best online checking accounts

Savings

5.0 / 5.0
Discover’s savings account has a competitive annual percentage yield, and because it has no monthly fee and no minimum opening deposit requirement, it’s a simple and stress-free account to use.

Pros	Cons
1.65% APY No monthly fee, balance requirement or minimum opening deposit	$15 fee for each withdrawal in excess of six per month

Account reviewed for rating: Discover Savings Account

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. You can compare Discover’s CDs with others based on multiple factors using our tool.

Pros	Cons
1-year CD: 2.25% APY 3-year CD: 2.45% APY 5-year CD: 2.75% APY	$2,500 minimum opening deposit

Account reviewed for rating: Discover CD

» Find the highest rates on CDs with NerdWallet’s best CD rates

Bank 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 24 hours a day by phone, as well as by mail, by Twitter, or by secure message within the app.

Discover’s main downside is a standard one among online banks: There’s no network of physical locations.

Overdraft fees

3.0 / 5.0

Discover Bank charges a $30 fee for insufficient funds 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, this type of 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 do that 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 monthly cash-back rewards are a rare perk.

All of these make Discover 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: mlambarena@nerdwallet.com. Twitter: @LissaLambarena. NerdWallet writer Spencer Tierney contributed to this report.

Updated December 20, 2017.

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.

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.

The bottom line

Checking

Savings

Certificates of deposit

Bank experience

Money in your pocket

Ratings methodology

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