Discover Card may be the fourth largest credit card brand in the U.S., behind Visa, MasterCard and American Express, but did you know that Discover actually does more than just offer credit cards – and offers online savings in addition to other helpful financial products?
In fact, Discover Bank provides online home banking products such as checking, savings, money market, certificates of deposit, and IRAs.
Furthermore, Discover Bank currently offers a higher than average annual percentage yield (APY) on their online savings account, at 1.70% – which has consumers eager to combine their credit card and banking services to make spending (and saving) money that much easier.
What is a Discover Online Savings Account?
Discover Bank’s savings account is a fully-online account, and as with any online bank, Discover avoids overhead costs associated with maintaining physical branches thus transferring those savings on to you. The Discover Online Savings Account currently offers a 1.70% APY (as of January 2020), with no maintenance fees, no monthly minimums and no minimum opening deposit required. Although, if you want to take advantage of their $150 or $200 bonus promotion, you will need to initially deposit $15,000 or $25,000, respectively. Interest in the Discover online savings account is compounded daily and paid out on a monthly basis. Discover Bank is also FDIC-insured, so you can feel free to enjoy online convenience and their higher than average APY, while receiving a safe and secure way to save money.
What are the Account Fees for a Discover Online Savings Account?
Discover is up front about all of the costs and fees associated with their accounts. Furthermore, they state on their website that, “Our online savings account has first fee forgiveness and no hidden fees.” That said, they want their customers to know what they are signing up for.
Here is the current fee schedule for Discover’s Online Savings Accounts (Updated January 2020):
|Monthly maintenance fee||$0.00|
|Minimum balance fee||$0.00|
|Official bank check||$0.00|
|Expedited delivery of official bank check||$0.00|
|Incoming wire transfers||$0.00|
|Deposited item returned||$0.00/ item|
|Excessive withdrawal fee||$15.00/item|
|Stop payment order for 6 months||$15.00|
|Insufficient funds (1 fee max per day)||$30.00|
|Outgoing wire transfers||$30.00|
What Are The Benefits of a Discover Online Savings Account?
In this section, we’ll review what current customers most commonly say are the advantages to their Discover Savings account.
- Higher than average APY (1.70% as of January 2020)
- No maintenance fees or minimum deposit required to open the account
- Access to your account any time via online or mobile banking
- Easy to electronically deposit checks, make free electronic transfers, and bill pay
- 24/7 U.S.-based customer support
- First fee forgiveness
- Interest compounded daily and paid monthly
- Auto-Save transfer feature
- Up to $200 cash bonus
What Are The Disadvantages of a Discover Online Savings Account?
In this section, we’ll review what current customers most commonly say are the disadvantages to their Discover Savings account.
- Discover’s savings accounts are online only – although there is 1 branch located in Delaware if you need to speak in-person with someone about your account.
- The cash bonus is considered interest and will be reported on IRS Form 1099-INT. Offer may be modified/withdrawn without notice.
- Limited deposit options. The only ways to deposit money into a Discover Savings Account are from direct deposits, online transfer, mobile check deposits or mail. You can’t deposit cash or traveler’s checks.
- Fee for exceeding transactions. Federal regulations limit your monthly withdrawals to (6), and Discover will charge you $15 every time you go over that limit.
And, although 1.70% APY is one of the best ones you will find in the current market, there are some competitors with higher.
As of January 2020, here are some rates from competitors that you may want to check out:
- HSBC Direct – 2.05% APY
- Vio Bank – 2.02% APY
- MySavingsDirect – 1.90% APY
- TAB Bank – 1.90% APY
- CIBC Bank – 1.85% APY
- Citi Accelerate – 1.85% APY
- Citizens Access – 1.85% APY
- CIT Bank Savings Builder – 1.80% APY
- Synchrony Bank – 1.80% APY
- American Express Personal Savings – 1.70% APY
- Barclays Bank – 1.70% APY
- Capital One 360 – 1.70% APY
- Discover – 1.70% APY
- Goldman Sachs – Marcus Account – 1.70% APY
- Ally Bank – 1.60% APY
Is A Discover Online Savings Account FDIC-Insured?
Yes. Discover Bank is a FDIC member, which means that funds deposited in a Discover Savings Account are insured up to the maximum allowed by law.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions. The FDIC insures deposits according to ownership category (such as individual, joint or accounts with beneficiaries). The current maximum amount is $250,000 per depositor, per insured bank, for each account ownership category.
How Do You Open A Discover Online Savings Account?
The application process for a Discover Online Savings account usually takes the average member 5-10 minutes to complete online. In other words, it’s fairly easy to get set up!
Next, click “Open an account” to be redirected to the Account Application
Then, fill out your personal details
Finally, fund your account. Since there’s no minimum opening deposit required, you don’t need to do this immediately. When you’re ready, you can start depositing money into your new savings account.
That’s it! Once your account is active, you can log on any time 24/ 7 to deposit and withdraw funds or make changes. You can also set up automatic deposits into your account to effortlessly build your savings.
How To Access Your Discover Online Savings Account:
Online: Access your account by logging in with your username and password on: https://discover.com
Mobile Device: Bank on your phone/tablet through their mobile app.
Phone: You can call Discover at the following phone numbers 24/7:
PO Box 30416
Salt Lake City, UT 84130
In conclusion, Discover’s Online Savings Account offers a competitive APY at 1.70% – and right now has the added bonus of cashback – which is a great way to earn some extra money on your cash balances for simply opening an online savings account. The lack of physical branches and limited deposit options may have traditional bank members shutter at the inability to speak to someone in person about their account and deposit cash – but in the mobile world we live in today, Discover’s online account and their 24/7 U.S.-based customer support should put minds at ease and make banking (and saving) as stress-free and user-friendly as it can be.
The predecessor to Discover Bank – The Greenwood Trust Company (owned by Sears Department Stores) – was founded in 1911 in Delaware. Then, Discover acquired The Greenwood Trust Company in 1985. As a result of the acquisition, leaders eventually renamed it Discover Bank in 2000. Discover Bank, which is owned and operated by Discover Financial Services, offers credit cards, personal loans, home equity loans, student loans, as well as checking and savings accounts. It’s business is mainly online but has one operating branch located in Greenwood, Delaware. Their mission is, “… to help people spend smarter, manage debt better and save more so they achieve a brighter financial future.”
Kate’s career has focused on consumer behavior and marketing analysis. She is a Senior Staff Writer for BankProfessor.com.