Discover doesn’t charge monthly fees for any of its accounts.
Discover; Alyssa Powell/Business Insider
The bottom line: Discover Online Savings Account is a strong online bank, as long as you can afford the opening deposits for a CD or money market account.
Overall bank rating
FeatureInsider rating (out of 5)Savings4.75Checking4.25CD3.75Money market4Trustworthiness5Total score4.25
Pros and cons
ProsCons
Cash back with your debit card
High interest rates on savings, CD, and money market accounts
Long CD terms
24/7 customer service
Can’t bank in personNo interest on your checking account balanceNeed $2,500 to open a CD or money market accountDoesn’t reimburse out-of-network ATM fees
Discover Online Savings Account
The Discover Online Savings Account is a worthwhile option for a no-fee savings account. There’s no monthly service charge and no insufficient funds charge. Discover pays a competitive rate on your savings account balance, and it doesn’t require an initial deposit to open the account.
Discover Cashback Debit Account
It isn’t very common to find a debit card that offers cash back rewards, but Discover lets you earn 1% cash back on up to $3,000 of purchases per month. There are also no monthly service fees with Discover. However, if you enroll in overdraft protection that links your checking to another Discover account, this can be a great low-cost checking account.
You have access to 60,000 ATM locations with Discover, but the bank doesn’t reimburse any out-of-network ATM fees charged by ATM providers.
Discover CD
Discover offers a wider range of CD terms than many competitors — most offer terms up to 5 years, but Discover also has 7-year and 10-year terms. However, it doesn’t offer any unique types of CDs, like no-penalty CDs.
Discover pays competitive rates on CDs, but you’ll need $2,500 to open a Discover CD. While this is lower than some banks’ requirements, plenty of online banks require significantly less.
Discover Money Market Account
The Discover Money Market Account gives you easy access to your money with a debit card and paper checks. You’ll earn 1.20% APY if you have an account balance under $100,000 and 1.25% APY if it’s $100,000 and over.
You’ll need at least $2,500 to open an account, though. Discover has 60,000 free ATMs, but it doesn’t reimburse any out-of-network fees charged by ATM providers.
How Discover Bank works
Discover’s website is easy to navigate, and its mobile app has received 4.5 out of 5 stars in the Google Play store and 4.8 stars in the Apple store.
Once you set up an online account, you can chat 24/7 with a live customer service representative. Discover also provides 24/7 customer service over the phone.
You have access to a debit card with both the checking and money market account. You can use 60,000 ATMs for free, but unlike some competitors, Discover doesn’t reimburse any fees charged by out-of-network ATM providers.
Your Discover Bank account is FDIC insured for up to $250,000, or up to $500,000 for a joint account.
Discover trustworthiness and BBB rating
Discover Bank has received an A+ rating from the Better Business Bureau. A strong BBB rating signifies the company is transparent in how it handles business, responds effectively to customer complaints, and is honest in its advertising.
Some other big-name banks — think Bank of America, Wells Fargo, and Chase — have faced public scrutiny in the past few years for issues like discriminatory lending, fake accounts, and wrongful trading. Discover Bank hasn’t had any major scandals in recent years, though.
How Discover Bank compares
We’ve compared Discover to two other online banks: Capital One 360 and Ally.
Discover Bank
Capital One 360
Ally
Savings APY
0.60% APY
Savings APY
0.50% APY
Savings APY
0.60% APY
Minimum deposits
$2,500 for CDs and money market accounts
Minimum deposits
$0
Minimum deposits
$0
Discover Discover Online Savings AccountCapital One Capital One 360 Performance Savings™Ally Ally High Yield Savings Account
All three online banks offer similar rates on savings accounts. Your decision between these three financial institutions may largely depend on minor differences between different accounts.
If you’re searching for a variety of CD options, you might prefer Discover to Capital One or Ally. Discover has CD terms up to 10 years, the greatest variety of the three.
You also might prefer Discover if you want a rewards checking account. Capital One and Ally offer good checking accounts but neither provides cash back features.
If you don’t have a lot of money to deposit into a CD, Capital One or Ally may be more suitable options. With Discover, you’ll need to deposit at least $2,500 into a CD. Capital One and Ally don’t require a minimum opening deposit, though.
Ally also might be the strongest contender if you’re planning to get a money market account. While Discover and Ally pays similar rates on money market accounts right now, Ally let’s you open an account with $0 while Discover’s money market account requires a minimum of $2,500 or more. Also, Capital One doesn’t have a money market account.