Discover Bank Savings Account Review

by Junior Boomer on July 20, 2010

All of us have heard about a Discover card being used as a from of payment, but did you know that Discover offers online money market and savings accounts, as well as CD’s and an IRA CD that is tax differed. Discover’s savings account is amongst the highest yielding simple savings accounts available to you and it’s a completely online account.

Savings Account:

Discover’s savings account has a yield of 1.35%APY with a minimum deposit of $500. They offer free online transfers from any other established account with any other bank that offers online services via online transfer. If you do not have an existing online account, you can simply mail a check. There is no minimum balance on your Discover savings account, but beware that you only receive six free authorized transfers from your savings account before a fee will be assessed. These include automatic as well as telephone transfers. The 1.35%APY only applies to a balance of over $500, if your balance falls below this level you will not be assessed a fee, but your interest rate may be marginally lower. The interest rate is very attractive however because it’s roughly 5 times higher than the national average for savings accounts. Discover is also protected under the FDIC so your money will be insured up to $250,000. Beyond a fee for over six authorized transfers per statement cycle, Discover has no hidden fee’s attached to their savings account which makes online banking a simple non-frustrating process.

Discover Bank Current Rates

Discover Bank Offers Money Market

Discover’s online money market account can be treated in the same respects as a checking account. The money market account has an APY of 1.20% on any balance over $10,000. The money can be withdrawn from the money market account via any ATM with the PULSE or Discover logo. The same principles apply with their money market account as with the savings where you will only receive six free authorized transfers per statement cycle. You can withdraw money from your Discover money market account via Discover debit card which will be provided upon opening the account, or checks which you will also have the option to obtain upon opening your money market account. There is no limit to the amount of withdrawals made with your debit card or through check.

Also Offer Competitive CD’s

Discover offers a range of CD’s that are all FDIC insured ranging from 3 months to 10 years. The rates are highly competitive and you have the option to leave the interest in the account, or have it transferred to a separate account of your choosing. The CD’s also have no market risk so your principle is secure which makes it not subject to market fluctuations. Discover also offers an IRA CD which you will be able to roll over an existing 401k into the Discover IRA CD with no tax consequence. They offer an attractive 3.5% APY on their IRA CD.

Discover Customer Service:

Discover is a well known brand name so if you’re a skeptic of online accounts, Discover may be a good option for you. They offer online customer support as well as 24 hour phone service at 1-800-347-7000. The web sit is easy to use and simple to navigate. Upon setting up your first account whether it be Savings or CD, you will not have to re-fill out the paper work for up to a total of five accounts. If you decided to make Discover your sole banking option, they will make the switch easy and with less paperwork.

Interested in checking out Discover Bank? Click here to check out their rates today.
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{ 3 comments… read them below or add one }

Blue Spyder November 2, 2010 at 6:45 pm

It’s gonna be a toss-up between Discover and AmEx, the rest of the online banks I just don’t trust at all, especially Ally and Sallie Mae

Tem Roka May 10, 2012 at 11:04 pm

I should have seen the warning signs. When I first opened the account in August 2011, Discover tried to pull the initial deposit amount ($9,000) THREE TIMES from my other bank, resulting in multiple overdraft charges of $105. When I asked my bank about this, they told me that I needed to get refunded from Discover and of course Discover told me otherwise. So basically I had to fight with both banks and then eventually closed off my original bank account (since their service was worse than Discover’s). What a mistake.

Things were going well for a while with Discover as I had a regular deposit in place. But after unacceptable delays in money transfers and having to wait almost a week for each transaction to occur, I decided to pull out from Discover and open a HSBC bank account that only takes 3 days per transfer. As I was pulling out all my money, of course Discover did what they do the best-they repeatedly tried to “transfer” money into my other account multiple times, resulting in $35 overdraft fees. When I called Discover to ask how on earth this multiple pull happened, they explained that I logged on and transferred the money multiple times myself (they even got a tech person at Discover to verify this!). This was the most insane excuse I have ever heard. And all of this mysterious ‘transfer’ that I requested all occurred after I emptied out my account. When I asked them “why would I try to make transfers from an empty account?”, they were like, “I can see that this doesn’t make sense and there must have been a mistake”. So I asked for a refund for the $35 fee they charged but they told me that was impossible.

I realized that this is how Discover penalizes people who empty out their accounts–they falsely charge you with fees based on a fake transfer that their system creates. This is the most unbelievable experience I have ever had with a bank. I truly believe that Discover bank is committing a crime through their fraudulent practices.

Roger July 3, 2012 at 8:55 pm

Opening an online savings account with Discover Bank is a mistake. I found out the hard way. They are a day or two slow in transferring money out. That hurt a little but one can live with that. There are several other minor things that are troublesome, including horrible customer service. One can live with some of these things, as long as my money is fine. The big issue came when I transferred everything out of the account on the 24th of the month. I was stunned when I didn’t get any interest for the month, 24 days in. They told me that I forfeited that when I transferred everything out. AWFUL.

I never thought I’d say this but American Express (http://personalsavings.americanexpress.com/) is much better. Money transfers on time, better rates, plus, they do not steal your interest money. I have learned from experience, I hope no one else suffers my fate.

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