Discover Bank Review

For awhile, I’ve promoted ING and SmartyPig as my bank accounts. It’s true, I love earning my 2.15% interest rate. If you like earning a top rate on your savings, skip the rest of this post and read my SmartyPig review because like me, you’ll fall in love.

But if you don’t like going with a site with a silly name or with a bank you’ve never heard of, then Discover bank may be for you.

To be clear, I still love my ING checking account. It’s so easy to use and one of these days I should get around to writing a glowing review because I’m a huge fan. It’s the savings account I’m not a huge fan of.

When I signed up for the ING saving account, my interest rate was at 1.40%, which was pretty decent. Then the savings dropped down to 1.25% (and now far below that), which definitely doesn’t excite me. When I heard about SmartyPig I jumped on board, but there are other options, and right now, Discover looks like a damn good one.

Why? Because they offer a 0.80% interest rate on savings accounts, which is far better than many other options out there. For example, it’s over 5 times greater than the national rate for savings accounts. Not a bad start.

Discover Bank Products

Many of you have heard about Discover for their credit cards, but they actually offer a bunch of other financial products, all FDIC insured.

Online Savings: This is what interests me most. Although you need a minimum of $500 to open an account, there are no minimum daily balances, no fees, and they’ve got that nice 0.80% interest rate.

Discover Bank also offers Money Market accounts, Certificates of Deposit, and IRA CDs.

The Money Market accounts have a minimum balance of $2,500. They are very similar to high interest checking accounts, which the exception that there is a limited to 6 withdrawals per month. The advantage of money market accounts is that the money is easier to access than with savings accounts. Click here to see the current money market interest rates.

Certificates of Deposit start at 0.40% for 3 months, move to 0.90% for 12 months, 1.75% at 5 years, and caps off at 2.10% at 10 years. That’s pretty competitive compared to other banks I’ve seen. I don’t want to list all their rates, so click here for their current CD rates.

IRA CDs are a safe and conservative to start an IRA. If you like the idea of an investment with a guaranteed return and no risk, an IRA CD may be for you. Discover offers CDs up to 10 years in length. Click here to view their current IRA CD rates.

One of the most important factors in choosing a bank is customer service. Discover has 24/7 live customer service representatives, which is a huge plus. From others, it sounds like they’re prompt and courteous, which is exactly what I’m looking for.

Readers, would you consider Discover as a bank? Or do you prefer to chase the high 2.15% interest rate of SmartyPig?

4 Responses to Discover Bank Review

  1. Jenna says:

    I think I have too many bank accounts as it is, so probably not…

  2. kt- lifedividend says:

    i would consider it as a bank for the reason that they have that online savings account with a nice interest rate. It would be nice for them to reduce the initial deposit to something more manageable because i cannot just keep $500 in an account while i can invest it in my business and probably make more from it

    • Daniel says:

      @kt- lifedividend, I think it’s interesting that they have a $500 account opening minimum but no minimum after that. So as long as you fund with $500, you can withdraw it immediately.

      That being said, the 1.35% interest you earn on less than $500 amounts to at most $6.75 per year, which isn’t enough to warrant opening a new account.

  3. Wow… 10 year CD, nice!

    If they had the 10 yr at 4%, I’d throw a chunk of change their way.

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