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Discover Bank review

Discover's cashback checking account lets you spend and earn at the same time.

Discover review
(Image: © Discover)

Our Verdict

Discover deserves its place at the top table of online banking for its cashback checking account alone. Paying up to $30 a month simply for spending your own cash, the benefits are obvious, while there are no fees or minimum balances to be concerned about either. Elsewhere, the rates on its CDs stand up to scrutiny too - and if you want to set and forget your rate for the next decade, Discover has a super-long 10-year term as well.

For

  • Outstanding cashback checking account
  • Competitive CD rates and long terms
  • No account fees

Against

  • Won't reimburse out-of-network ATM fees

Although probably best known for its credit cards, Discover Bank has more than enough on offer in the way of checking and savings services to make it one of the best online banks overall. Since launching in the mid-1980s, Discover has built its reputation around promoting better financial habits among its customers. 

The bank has financial solutions across almost every area of personal finance, from credit cards to student loans and home loans. Such is Discover's all-round expertise, we also recognize the bank as one of the best debt consolidation companies and for its excellent home equity loan proposition. 

  • Note that rates were correct as at September 2020, but may have changed since.

Discover review: Account options

The standout option among Discover's full range of account offerings is the checking account which, rather than paying interest on your balance, instead pays cashback, depending on how much you spend. With 1% cashback paid on up to $3,000 in debit card purchases each month, this equates to a potential monthly return of $30, or $360 over a full year. 

Key figures

Basic checking: 1% cashback on debit card spend, max $30 p/m
Premium checking: 1% cashback on debit card spend, max $30 p/m
Savings: 0.70%
Money market: 0.55% - 0.60%
Short term CD: 0.70%
Long term CD: 0.95%
Fund availability: 1-4 business days
Number of ATMs in Network: 60,000+

Its online savings account is more conventional in paying a highly competitive 0.70%, and like the checking account, has no minimum balance requirements. The money market account is slightly less generous than what is available elsewhere, paying 0.55% on balances under $100,000 and 0.60% if you are able to save more - Axos Bank, by comparison, pays 0.90%. 

If you're looking for guaranteed returns, Discover's CD accounts are definitely worth considering, particularly if you want to lock your funds away for the very long term. Rates start at 0.25% for a three-month CD, but rise gradually up to a maximum of 0.95% on its five, seven and 10-year options. 

Discover review: Features

If you're wondering about fees, then you don't have to - Discover has no charges attached to its checking, savings, accounts, money market or CD accounts. The only time you might have to pay something is a service charge for an outgoing wire transfer, or if you use a non-Discover ATM which is not part of the 60,000+ ATMs in its no-fee network. The ATM situation is worth bearing mind, however, as Discover doesn't offer any refund on out-of-network ATM fees in the same way that most other online banks will.

Mobile banking is an option, allowing you to check your account anywhere at anytime - you can even skip the passcode and log in with touch or face ID. Perhaps most useful, however, is the ATM locator and the option to deposit a check by snapping a photo of it. 

Discover review: Service

Deposited funds should be available to you within one to four business days, which means there is a chance of a slightly longer wait than the fastest banks elsewhere. 

Given the all-encompassing nature of Discover's financial product range, it is unsurprising to find the website hosts a variety of tools and calculators that you can use to analyze and refine your finances. 

Discover review

(Image credit: Discover)

Should you have a concern or question, the FAQ section is extremely well-stocked with clear and concise answers. And if you can't find what you're looking for, support is available if you log in through your online account, or you can call the bank 24/7, or mail your query. 

Discover review: Security

Discover is, of course, FDIC insured, which means that if the bank fails, you can recover your money. In terms of online security, Discover offers all the usual protocols, and will authenticate you with your user ID and password, and time-out your session after a period of inactivity.

And if there is a log in to your account from an unrecognized computer or mobile device, you'll automatically be sent an identification code via text message, phone call, or e-mail to make sure it is you and not someone else. 

Should you use Discover? 

Discover deserves its place among the best online banks on the strength of its cashback checking account alone. The potential to earn $30 a month simply for spending your own money is a truly excellent return in these times. If you're looking for something more traditional for your savings, Discover's CDs are a good option too, particularly if you want to guarantee your rate for the long-term, while the absence of any fees is always welcome news to any saver.