Discover Bank Review (2022)

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Discover is best known for its rewards credit cards, but that’s just a portion of its business. It’s a full-service online bank, as well as a payment services company. Discover offers banking and retirement solutions for individuals. Discover is also a lender, with personal, student and home equity loans available.

Because they are strictly an online bank, Discover doesn’t have local branches that customers can visit in person for banking needs. That doesn’t mean they aren’t accessible, though. Discover is known for its superb customer service, which is available 24 hours a day.

Here’s our review of Discover Bank and its personal banking options to see why it was named Best for Avoiding Fees on Forbes Advisor’s list of Best Online Banksand Best for Cash Back on Best Checking Accounts.

Account details and annual percentage yields (APYs) are accurate as of July 12, 2022.

Account Basics

Checking (Cashback Debit)*

Discover checking account are somewhat unusual in the banking world. That’s because—similar to many of its credit card offerings—Discover checking accounts earn cash back rewards. With the Discover Cashback Debit account, customers can earn 1% cash back on up to $3,000 in debit card purchases every month. See website for details.

If you maxed out the $3,000 monthly limit, you would earn $30 cash back every month. Over a year, you would earn $360 cash back just by using your debit card for purchases. If you only spent $2,000 in debit card purchases monthly, that’s still $240 cash back over a year.

Another feature that Discover is known for with its checking accounts is not charging fees. There are no fees for account maintenance, ordering checks, in-network ATM use, online bill pay or replacement debit cards. Discover Cashback Debit accounts have no minimum balance requirements or activity requirements.

Savings

Discover Bank offers an online savings account that pays a competitive 1.20% APY. With $10,000 in your savings account, you would earn over $119 from interest annually. Interest compounds daily and pays out monthly.

There are no fees associated with online savings accounts through Discover. There’s also no minimum balance requirement. Compare that to Bank of America’s Advantage Savings account, which requires a $500 minimum balance to waive its $8 monthly fees.

Money Market

Money market accounts take the earning power of a savings account and also give access to checking features for a more versatile account. The Discover Bank money market account provides customers with ATM access, a debit card and check-writing capabilities.

(Video) Discover Bank Review: Is It Worth It In 2021?

Convenience isn’t the only high point for Discover’s money market accounts. These accounts offer high earning potential. Account balances under $100,000 earn 1.10% APY. Balances of $100,000 and higher earn 1.15% APY. An account balance of $20,000 saved for five years will earn $219 in the first year and $1,120 over five years of saving.

Discover’s money market accounts have no fees and no minimum balance requirements. Money market accounts allow you to earn more interest than you would with a traditional checking account.

CDs

Discover Bank certificates of deposit (CDs) are versatile high-yield accounts that offer guaranteed returns for customers. Discover CD terms range from three months to 10 years, depending on your needs.

Discover offers competitive returns on its CDs that are a bit lower than the best CD rates on the market. Here’s a look at the interest-earning potential of Discover’s CD accounts at different term lengths with an initial deposit of $10,000:

Discover offers a total of 12 CD term lengths.

CD accounts through Discover have a $2,500 minimum deposit.If for some reason you need to access your funds before they reach maturity, you can withdraw them, but you’ll have to pay a penalty. The early withdrawal penalty will depend on the specific length of the CD term. The penalty on a CD with a term under one year is three months’ simple interest.

Opening a CD account is generally considered to be a safe investment because you have FDIC insurance and a guaranteed return, no matter what the market does. Your CD rate is locked in for your term length. The longer your CD term, the higher the rate you’ll receive. You also can create a CD ladder, using Discover CDs with different maturity dates, to build in some flexibility specific to when you withdraw funds.

IRA CDs*

Another option available through Discover is IRA CDs. Customers can choose between Roth IRA CDs and Traditional IRA CDs, depending on their needs. Roth IRA CDs:

  • Are funded with after-tax dollars
  • Contributions aren’t tax-deductible
  • Earnings are tax-free
  • Contributions can be withdrawn at any time without IRS penalty

Traditional IRA CDs are set up differently. Traditional IRA CDs:

  • Are funded with pre-tax money
  • Have tax-deferred earnings
  • Contributions can be tax-deductible up to specific limits
  • Funds can’t be withdrawn without a penalty until age 59½

IRA CDs through Discover can be funded with money from other retirement accounts. Customers also can transfer an IRA from another financial institution into a Discover IRA CD.

Discover’s IRA CD terms range from three months to 10 years and they pay similar APYs to Discover’s regular CDs. Discover IRA CDs can be opened with as little as $2,500.

(Video) Discover Bank Review: The Main Things You Should Know

Access on the Go

Discover customers can access their accounts in several ways. Accounts are always accessible online.

Discover Mobile is the bank’s highly rated mobile app, available on iOS (4.9 stars out of 5 on the App Store) and Android (4.7 stars on Google Play). Not only can you access all of your Discover accounts through the app, but you also can take advantage of mobile check deposit by taking a photo with your phone or tablet.

Convenience is a huge aspect of Discover’s mobile app. You can easily log into your account through touch ID. iPhone users also can log in through face ID. People using the app can enable Quick View, which allows you to see your account balances without actually logging into your account. Discover ATMs can be located through the mobile app as well.

Discover has more than 60,000 ATMs available to customers. All of the ATMs in its network are fee-free ATMs. You may get charged a fee by other banks when using an out-of-network ATM.

Another nice feature is access to Zelle, a digital payment network. Discover and Zelle have partnered up, allowing customers to connect bank accounts to the service easily. Zelle lets you send and receive money between almost every U.S.-based bank account. There are no fees charged for this service.

Pros

  • 1% cash back on up to $3,000 per month of debit card purchases
  • No monthly fees, overdraft fees or minimum balances
  • Online bill pay feature
  • 60,000+ fee-free ATMs
  • U.S.-based customer service available 24/7 365 days a year
  • Highly rated mobile app
  • Competitive APYs on savings accounts and CDs
  • IRA CDs available for retirement investments
  • Diverse range of accounts for different financial needs: checking, savings, CDs, credit cards, personal loans

Cons

  • No physical locations
  • No auto loans
  • No reimbursement for out-of-network ATM fees

How Discover Bank Stacks Up

Discover hits a home run with its online banking services. They offer competitive rates on most accounts while having no minimum balances or fees. Checking accounts earn 1% cash back, which isn’t very common in the banking world. See website for details.

Discover stands by its accounts and even offers comparisons to other banks on its website so you can see the differences. Its transparency is great to see. Flexibility is one of Discover’s best traits, evident across all of its banking products.

If the thought of online-only banking scares you, then Discover Bank isn’t the best option for your next bank account. Customers who are okay without a local bank branch should take advantage of high-yield earning with Discover Bank.

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Learn More

Frequently Asked Questions (FAQs)

Does Discover offer any loans?

Yes. Besides its personal banking products, Discover also offers personal loans, student loans and home equity loans.

Personal loans can be taken out through Discover for up to $35,000. The loans have fixed interest rates and can be repaid over a time period ranging from 36 months to 84 months. Those with established credit will qualify for lower APRs than those with an average to poor credit profile. There are no origination fees or other loan fees so long as you pay on time.

Discover student loans cover up to 100% of school costs. Students also can earn a discount for getting good grades. Student loans carry either a variable or fixed interest rate. The specific APR will vary, depending on the creditworthiness of the applicant.

Flexible home equity loans are available through Discover, with terms ranging from 10 years to 30 years. Home equity loan amounts range from $35,000 to $200,000. These loans carry a fixed APR, which will vary based on loan amount and creditworthiness factors.

Is Discover Bank FDIC insured?

Yes, Discover Bank is FDIC insured (FDIC# 5649). The federal government protects your money up to $250,000 per depositor, for each account ownership category, in the event of a bank failure.

(Video) Discover Bank Review | Best Bank In 2022 | Worth it?

Is Discover Bank safe?

Discover Bank takes account security seriously. They do this through the use of fraud monitoring, fraud protection, SSL encryption, bill pay protection, and other security measures. Discover customers will never be held responsible for unauthorized banking transactions.

How good a deal is the Discover 1% cash back debit card?

Discover Bank is one of the few banks that still offers significant cash back rewards for debit card purchases. You can earn 1% cash back on up to $3,000 in debit card purchases each month.

Cash back can be redeemed as an automatic monthly deposit into your Online Savings account, transferred to a Discover Credit Card Cashback Bonus Account or deposited into your Cashback Debit account, Online Savings account or Money Market account. Rewards do not expire so long as your account is kept in good standing.

FAQs

Is Discover Bank a good bank? ›

Discover offers a wide range of banking products - including checking, savings, CDs, and more. In fact, most of the time, Discover Bank is on our list of the best high yield savings accounts and our list of the best money market accounts. They also have a very compelling checking account and great CDs.

Is Discover Bank secure? ›

Is Discover Bank Safe? Your deposits with Discover Bank is safe and protected by FDIC insurance (FDIC #5649). FDIC insures your deposits up to $250,000. Discover uses state-of-the-art encryption to protect your transactions and data.

Is Discover Bank a big bank? ›

Discover is a popular option, as the big-name financial institution still offers savers a competitive rate (unlike many brick-and-mortar banks), as well as other easy access to other Discover accounts that help you manage your money in one place.

Is Discover Bank free? ›

We're an online bank that says goodbye to gimmicks, gotchas and fees. Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network. No monthly fees on any account.

Is Discover owned by Chase? ›

About Discover Financial Services, Inc. Discover Financial Services, Inc., a business unit of Morgan Stanley (NYSE:MWD), operates the Discover Card brands and the Discover Business Services network for its more than 50 million Cardmembers.

Can I deposit cash into Discover Bank? ›

Digital-only banks like Discover's only allow you to withdraw cash from ATMs; you can't deposit cash or physical checks.

Who is Discover Bank owned by? ›

Discover Financial
TypePublic
Number of employees17,600 (2020)
ParentDean Witter Reynolds (1985–1997) Morgan Stanley (1997–2007) Independent (2007–present)
SubsidiariesDiners Club International Discover Bank Discover Network Pulse
Websitediscoverfinancial.com
13 more rows

Is Discover an ethical bank? ›

Discover Bank

It is not certified directly by any organization as an ethical financial institution. However, it is still doing a lot to help society. Discover has invested more than $14 million to teach financial skills to high schoolers and $1 million of those, especially in Chicago Public School.

What is best online bank? ›

Jump to our picks for the Best Online Banks: For banks with checking and savings accounts: Discover || Alliant || One || Varo || Monifi || Ally || SoFi. For banks with savings accounts only: Marcus by Goldman Sachs || Bread Savings || Synchrony Bank.

Who is the number 1 bank in America? ›

JPMorgan Chase & Co.

What is the most trusted bank? ›

Last week Newsweek recognized Texas Capital Bank as the most trusted bank in America, based on a first-of-its kind survey Newsweek conducted with market research firm Statista.

Which bank is best in USA? ›

The Top 10 Banks in America
  • JPMorgan-Chase. At the top of the list, JPMorgan-Chase holds $3.19 trillion in assets. ...
  • Bank of America. With $2.35 trillion in consolidated assets, Bank of America is second on the list. ...
  • Wells Fargo. ...
  • Citibank/Citigroup. ...
  • U.S. Bank/U.S. Bancorp. ...
  • Truist Bank. ...
  • PNC. ...
  • TD Bank.
Oct 27, 2021

Can I use my Discover Card at any ATM? ›

A Discover Card Can Be Used at Banks, Credit Unions, ATMs and Certain Stores for Cash. Sometimes you need cash and when you do, it's possible to use your Discover card at a bank, ATM or credit union for a cash advance up to the limit specified in your contract.

What bank does Discover use? ›

Most cards with the Discover brand are issued by Discover Bank, formerly the Greenwood Trust Company. Discover transactions are processed through the Discover Network payment network.

Is Discover bank insured? ›

Note that many online savings accounts, as well as savings accounts at brick-and-mortar institutions, are FDIC-insured. For instance, the Discover Online Savings Account is insured for up to $250,000 per account type per accountholder.

What ATM does discovery bank use? ›

To withdraw cash: Use any Visa-branded ATM Visit one of our participating retailers: Pick n Pay Checkers Shoprite Select Spar stores.

How do I withdraw money from Discovery bank? ›

You can withdraw cash by:
  1. Using any Visa-branded ATM.
  2. Visiting one of our participating retailers: Pick n Pay. Checkers. Shoprite. Select Spar stores.

How much can I withdraw from Discover ATM? ›

You can easily withdraw money daily with the Discover Cashback Debit Account at an ATM or at the register at participating retailers. You can also send and receive money in minutes with Zelle. However, ATM withdrawals are limited to $510 per day.

Is Discover Card hard to get? ›

A 700+ credit score is needed to get most Discover credit cards, but there's no minimum credit score needed for a few Discover cards. You can get the Discover it® Secured Credit Card with a bad credit score (below 640).

Is Discover a good company? ›

Investor's Business Daily ranked Discover in its Most Trusted Financial Companies list in 2021. Most notably, Discover was recognized in the overall top 25 most trusted list at #8 for credit cards and #1 in the credit card category line of business.

What places do not accept Discover? ›

One major national chain outlet that doesn't accept Discover at any outlets is Costco, which only honors one credit card brand at its members-only warehouse stores, tire centers and gas stations.

Is Discover a good debit card? ›

The Discover Cashback Debit account is best for those who use their debit cards often and don't usually maintain a high checking account balance. The lack of minimum balance or activity requirements, plus the free checks and debit card replacements make this an affordable account.

Is Discover online savings account safe? ›

Yes, Discover Bank is FDIC insured (FDIC# 5649). The federal government protects your money up to $250,000 per depositor, for each account ownership category, in the event of a bank failure.

Is Discover socially responsible? ›

Discover Online Savings Account isn't a socially responsible bank account, but your dollars still go to support improving financial literacy in US high schools.

What is the safest online bank? ›

The Verdict

Citibank and Bank of America offer the most protection for their customers, each providing three additional dimensions of security.

Does Discover bank have Zelle? ›

--(BUSINESS WIRE)-- Discover announced that the Zelle® Person-to-Person (P2P) experience is now available on its mobile app and online account center, allowing Discover checking, savings and money market account customers to easily send and receive money with almost any bank account in the U.S1.

What is disadvantage of online banking? ›

With online banks, it's not that simple. “Many online banks make it exceedingly difficult to deposit cash,” said David Wurst, Owner and CEO at Webcitz.”If this is something you intend to do frequently, it's worth checking the [online] bank's policy.

What bank is better than Chase? ›

Chase: Best for bonuses, brick-and-mortar bank with great checking sign-up bonuses and a large branch network. Discover: Best for cash back, online bank with a competitive savings rate and cash-back checking. Alliant Credit Union: Best for ATMs, online credit union with high rates and a huge ATM network.

What is a good bank to use? ›

Best banks, credit unions and neobanks
Financial institutionBest for ...
Charles SchwabOverall, ATM availability.
Ally BankOverall, flexible overdraft options.
Alliant Credit UnionOverall, high rates.
Capital OneOverall, tools.
10 more rows

What bank is in all 50 states? ›

In terms of a presence in every state, Chase Bank comes the closest with retail locations in all of the lower 48 states.

Which bank is safest in USA? ›

The Safest Banks in the U.S.
  • Wells Fargo.
  • JPMorgan Chase.
  • U.S. Bank.
  • PNC Bank.
  • Citibank.
  • Capital One.
  • M&T Bank Corporation.
  • AgriBank.
May 30, 2022

What is the least trusted bank? ›

Wells Fargo

So, it's no surprise it's overall reputation score of 63.0, which is considered "poor" by the poll's standards, is the lowest of all the banks on the list of the 100 most visible companies. RELATED: This Is the Least Trusted Retailer in the U.S. Right Now, Data Shows.

What bank has highest customer satisfaction? ›

Capital One received the highest customer satisfaction score among the largest banks in the United States as of 2021, with a score reaching 692 points out of 1,000 possible.

What's the safest bank to put your money in? ›

1. Wells Fargo & CompanyWells Fargo & Company (NYSE:WFC) is the undisputed safest bank in America, now that JP Morgan Chase & Co.

How many bank accounts should I have? ›

At a minimum, it's a good idea to have one bank account for everyday expenses and a separate savings account to earn interest on your savings. However, there are a number of other types of bank accounts you might want to open as well, such as a joint bank account, an offset account or a business bank account.

Which is the best bank account to open? ›

Best Bank Accounts in India
  • Punjab National Bank.
  • Union Bank of India.
  • HDFC Bank.
  • ICICI Bank.
  • Kotak Bank.
  • Bank of India.
  • Axis Bank.
  • Canara Bank.
Dec 15, 2021

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1. Discover Bank vs. Capital One 360 | Which Account is Best?
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2. Discover Bank Review: Is It Still Worth It? (2021 Update)
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3. Discover Bank Review: Is It Worth It In 2022?
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4. Discover Bank Review - Checking, Savings, debit card, and Credit Card all in one Solution?
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