This is my review of Discover Bank.
Discover Bank Review
Discover, yes the same Discover that runs Discover Cards, has it’s own bank. For a while now I’ve known about this bank, but just didn’t take the time to give it a full review. I’m here today to share what I know about this bank, in particular, their online savings account. I know you readers are always on the lookout for the best places to keep your emergency savings. As you know, I think online savings accounts are the best place for that. So, let’s see if Discover Bank will suit your needs. If you want to skip my review and go straight to the latest Discover Bank offering click the banner below:
About Discover Bank
In 2000, the Greenwood Trust Company, in existence since 1911, becomes Discover Bank. Up until last year, 2009, they only offered the money money market account as a place to keep your liquid savings. Since they’ve opened the full online savings account, they’ve gained in popularity and are now seen as a direct competitor to the ING’s of the banking industry.
Discover Bank Online Savings
The online savings account is arguably Discover’s best offering. That’s why I’m going to make it the focus of this review. The savings account started being offered in the summer of 2009. That makes sense. Because I hadn’t heard of or cared about Discover Bank prior to that point.
Right now the rate on the account is excellent, even compared to other online savings accounts. The account requires a minimum initial deposit of $500. It’s FDIC insured, has no messy fees or minimum balance requirements, no fees on the first 6 monthly money transfers out, no fees on incoming domestic and international wires. You get full online access to your account.
Deposits are always a main concern of those entering into the online savings world. And I can assure you that Discover offers free online transfers between your other connected accounts. So, if you have a checking account, with BOA for example, you’ll only need to make an online money transfer to deposit money into the account. You can also mail in a check if you like. The address for Discover Bank deposits is PO Box 30417, Salt Lake City, UT 84130.
Other Services
Beyond the online savings account, Discover Bank offers a money market account, certificates of deposit (CDs), and an IRA CD. The money market account is pretty straight forward. They present the money market account as if it should be used like a checking account. Before they offered the savings account, this is how they provided a good return for savers.
They offer a full catalog of CDs (12 in total) ranging from 3 months to 10 years. Finally, the IRA CD is a great way to shelter your stable investment returns from taxes. If you have an old 401k you aren’t using, you could roll it over into this IRA CD without tax consequences. The Discover Bank routing number is 031100649.
What I Don’t Like About Discover Bank
I really don’t like the initial deposit requirement of $500. Beyond that, I don’t see much difference between this offering and other banks.
What I Like About Discover Bank
I really like that Discover Bank seems committed to providing a straight-forward savings account, free of stupid fees, with a solid interest rate on their savings product. Right now it’s one of the top high yield savings account rates.
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{ 5 comments… read them below or add one }
I had no idea that Discover offered a savings accoumt, it will be interesting to see how they stack up against my credit union and the other savings programs available.
@Kate – Yeah, I can’t say I’ve seen them in any major publications or on TV. I think their advertising has mainly been online. But I’m sure they’ve also promoted it to their card holders as well. Right now the rate is one of the best of the online banks.
wow is this too good to be true? That definitely better than the rate I am getting with ING right now, and I though ING were the best around. Right now I’m getting 1.10 with ING. Do you know if you can have many different accounts and attach your own label to them? It sounds silly, but its a nice little feature I enjoy:)
@MyFinancialObjectives – You can have more than one account. You can actually use the initial application to set them all up. You can have as many as 5. I use this approach as well and really enjoy it.
Ahh good to know… Wow seems like Discover may have ING beat! I’m pretty sure that rate is higher than Ally, which I thought was the current interest rate leader. If I actually had a substantial amount of cash in my savings I would consider switching! Thanks for the info!