Discover® Bank
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Strengths
- Cashback Checking product
- Competitive interest rate
- Full-featured mobile app
Discover is a company that has been around for decades. Most people know about the Discover Card, first introduced in 1985 by Sears. At the time, it was novel because it had no annual fee and offered cardholders a higher than average credit limit.
Back then, credit cards were special. Companies hadn’t realized how much money they could make off interest and so many latched onto the convenience and safety of not carrying a lot of cash. To get a credit card meant paying an annual fee. Discover went away from that.
When Discover Card started, Discover Financial wasn’t even its own entity. Discover Financial started as Greenwood Trust Company, which Sears acquired in 1985 to issue the Discover Card. Sears wanted to offer more financial services, to go with their brokerage and real estate groups. They had acquired Dean Witter Reynolds (brokerage) and Coldwell, Bank & Company (real estate), Greenwood Trust Company was the next piece.
Discover Financial Services, as it would be called, would eventually be renamed to Discover® Bank in 2000.
Head spinning yet?
These days, Discover Bank is its own entity. Sears eventually spun out all the other pieces. Sears sold Discover in 1993 to Dean Witter. Dean Witter merged with Morgan Stanley in 1997. In 2007, Morgan Stanley spun out Discover Financial Services so now it’s its own company.
Table of Contents
About Discover Bank
You know the history of Discover Bank, let’s look at today.
Discover Bank (FDIC# 5649) is headquartered out of Greenwood, DE (sound familiar?). They offer the laundry list of bank products, from deposits (savings, checking, CD) to loans, credit cards, and everything else in between.
You can contact Discover Bank by calling 1-800-347-7000 and they accept general correspondence at Discover Bank, PO Box 30416, Salt Lake City, UT 84130.
For today, we’re going to be looking strictly at their deposit products (no credit cards, no loans).
Discover Bank Products
They offer the full range with a few (good) twists.
The Discover® Cashback Debit is something you don’t see every day. It’s a checking account that not only offers a high-interest rate (as you’d expect from an online bank) but they will give you 1% cashback on up to $3,000 in debit card purchases each month (see website for details). Cashback on a debit card is rare (Did you know that Discover Card was one of the first credit cards to offer cashback on purchases?).
Their other products are fairly typical for an online bank. Their online savings and money market accounts offer comparable rates. No minimums and no monthly balance requirements.
The ATM network is huge – 60,000 locations – and they use Allpoint and MoneyPass’s networks.
Their certificates of deposit are a little different in that the minimum to open one is $2,500. Most other online banks don’t require a minimum (technically $1). Discover is also one of the few banks that offer an 84-month (7 years) and 120-month (10 years) CD. Most banks stop at a 60-month (5 years) certificate of deposit product.
Discover Bank Fee Structure
Think of a fee at any other bank – chances are Discover Bank doesn’t charge you for it.
- No monthly maintenance fee on any deposit account (Cashback Checking, Online Savings, Money Market, CDs, or IRA CDs)
- No minimum balance on Cashback Checking or Online Savings
- No fee on ATM withdrawals in-network (60,000 ATMs) on Cashback Checking
- No fee on check reorders on Cashback Checking
- No fee on online transfers on Cashback Checking, Online Savings, or Money Market
- No fee on online billpay for Cashback Checking and Money Market
If you’ve ever made an “excessive number of withdrawals” from a savings account, you were probably upset by the fee. It’s Regulation D limits the number of transfers you can make from a savings account. Well, Discover does not charge you a fee for that. They also don’t charge one for a stop payment or insufficient funds.
Discover Mobile Banking Smartphone App
Discover has a mobile banking app that is on par with any other online bank out there. Anything you would want from a branch or online is available – you can check your account, make transfers, find an ATM, and even deposit checks with mobile deposit.
If you have an Apple Watch, Discover Mobile is available on that too. You can access your account, get reminders, and Cashback Bonus notifications.
The mobile banking app is available on iOS and Android devices.
Is It Worth Getting?
If you do not have an online bank, Discover’s online savings account is a solid choice.
It has a competitive interest rate, nice range of certificates of deposit terms and rates, plus it offers a checking account reward – a rarity. They check all the boxes and add a cherry on top.
Their Cashback Debit account product is one of the biggest advantages. You do not see debit rewards very often and 1% cash back on up to $3,000 in purchases each month is very generous. There’s a type of checking account, known as a reward checking account, that will only give you a high-interest rate if you use your debit card 10-15 times a month!
If you already have an online bank that you like, Discover Bank is similar (the rewards checking is nice but 1% of the maximum $3,000 is only $30, may not be worth switching). Discover Bank has no minimum balance or maintenance fees so it won’t cost you anything – plus you still get a high-interest rate on the account so you don’t lose out there.
Lastly, if awards are important to you, they have a 5 Star Rating Safe & Sound from Bankrate and a 5 Star Rating from Nerdwallet.
Overall, a solid lineup of deposit products with a true shining star in the Cashback Checking account and its rewards.
Mr. Freaky Frugal says
I use Ally Bank and I’m really happy with it. However, I did recently get the Discover Card and it’s fantastic!
I also temporarily opened a Discover Savings account just to get the $200 bank bonus. 🙂
john citeroni says
Of all the different big companies i have used . they by far offer the best service
Aging with Freedom says
We’re in love with Personal Capital as well. That’s a good measure of being in tune with your other analyses.
Our brick and mortar bank essentially isn’t anymore. At least for us. It closed the only convenient branch office. So for all practical purposes, it’s an online bank for us. That does open up the question, can we do better with another online bank. Interesting review of Discover Bank.
Also, find the Realty Shares option an intriguing way to invest in real estate when we don’t like the local market for investment properties. We’ll check that out.
David Harbin says
I’ve been pleased with Discover Banking for years!