DocPHY.com: Discover Bank Review: Checking, Savings and CDs

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Wish you had a nickel for every time you used your debit card? Discover Bank gives you two: 10 cents each time you swipe, pay a bill online or write a check, up to $10 a month.

The online bank also has high-yield savings and CDs as well as free access to a broad ATM network. Although it only has one physical branch, the bank’s services might make up for it.

The bottom line

A checking account that earns cash back

Some of the best savings rates

Only one branch location

Our Ratings
Checking
Savings
Certificates of deposit (CDs)
Customer experience
Overdraft fees
Overall

Read on for more information about Discover Bank’s checking and savings products, CDs, customer experience and fees.

Discover checking

Free checking is hard to come by and rewards checking even more so. Discover’s Cashback Checking is both. Add in an extensive ATM network and this account almost earns a perfect 5 stars.

But there are two caveats. To apply for Discover checking, you need to have another Discover account, such as a credit card or savings account. And getting the maximum cash back of $10 per month might be difficult if you’re not a frequent spender. The 10 cents per debit card swipe, bill pay or check means you’d need to make 100 transactions. That’s more than three qualifying transactions every day. If you want an easier way to earn cash back, credit cards may be a better option.

As is standard among online banks, Discover doesn’t let you deposit cash; the one exception is at its single branch location, in Delaware.

Pros	Cons
No monthly maintenance fee or minimum balance requirement Free access to 60,000 ATMs Up to $10 in cash back per month	Doesn't handle cash deposits nationally Doesn't earn interest Has only one physical branch

Account reviewed for rating: Discover Cashback Checking» MORE: NerdWallet’s best online checking accounts

Discover savings

5.0 / 5.0
Discover’s savings account has a competitive annual percentage yield, and no fees and no minimum opening deposit requirement make it a simple and stress-free account to use. Plus, you can earn a bonus.

Pros	Cons
1.01% APY No monthly fee, balance requirement or minimum opening deposit Savings bonus available	$15 fee charged if you exceed six monthly withdrawals

Account reviewed for rating: Discover Savings Account» MORE: NerdWallet’s best savings accounts

Certificates of deposit

5.0 / 5.0

Discover’s CD rates are highly competitive, but they require a higher opening deposit than some other banks. Term lengths vary from three months to 10 years, and you stand to earn more money on longer terms.

Pros	Cons
2-year CD: 1.35% APY. 3-year CD: 1.50% APY 5-year CD: 2.00% APY	$2,500 minimum opening deposit

Account reviewed for rating: Discover CD» MORE: Best CD rates

Discover customer experience

4.0 / 5.0

The bank’s website shows rates and fees clearly, and the mobile app on iOS and Android phones receives high ratings. If you need help, you can reach a representative by mail, or 24 hours a day by phone, email or Twitter.

Discover’s main downside is standard among online banks: There’s no network of physical locations.

Discover overdraft fees

3.5 / 5.0

Discover Bank charges a $30 fee if you try to make a transaction without enough funds in your account. But only one fee is charged per day, regardless of the number of transactions. At other institutions, this overdraft fee might be charged multiple times in a single day, potentially adding up to hundreds of dollars.

You can avoid this fee altogether with free overdraft protection transfers by linking a savings or money market account. However, if you can’t cover the overdraft with the linked account either, you’ll still be charged the $30 fee. These transfers don’t apply to ATM withdrawals or debit card purchases, which would be declined without a fee charged.

Money in your pocket

Discover Bank’s free ATMs and fee-free services mean you keep more money in your pocket. And the $10 monthly cash-back rewards are a rare perk.

Discover’s a good option, but if checking account rewards are what you’re after, shop around to ensure that you’re getting the best deal based on your spending habits.

Melissa Lambarena is a staff writer at NerdWallet, a personal finance website. Email: mlambarena@nerdwallet.com. Twitter: @LissaLambarena. NerdWallet writer Spencer Tierney contributed to this report.

Updated May 23, 2017.

RATINGS METHODOLOGY

For banks and credit unions, NerdWallet’s overall rating is a weighted average of each subcategory: checking accounts, savings and money market accounts, CDs, customer experience and other fees. Factors we consider, depending on the subcategory, include rates and fees, ATM and branch access, account features and limits, user-facing tech and customer service. Several Nerds contribute to each financial institution’s ratings to ensure consistency and accuracy.

What the ratings mean: