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
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.
» Take a look at NerdWallet’s best online checking accounts
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. Plus, it offers a solid sign-up bonus. The company says:
“To get your $200 bonus offer:
“What to do: Apply for your first Discover Online Savings Account by 4/2/18, online or by phone. Enter offer code NW318 when applying. Deposit into your account a total of at least $25,000 to earn a $200 bonus by 4/16/18. Maximum bonus eligibility is $200.
“What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded or affinity accounts provided by Discover. Account must be open when bonus is credited. Bonus will be credited to the account by 4/30/18. Bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice.”
How Discover compares to other savings accounts
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.
» Find the highest rates on CDs with NerdWallet’s best CD rates
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.
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: email@example.com. Twitter: @LissaLambarena. NerdWallet writer Spencer Tierney contributed to this report.
Updated December 20, 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.