Not Just Credit: Discover Bank Offers a Savings Account Too

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 online savings 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 Capital One 360′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 money market 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.



Last Edited: May 14, 2014 @ 3:22 pm
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.

Comments

  1. 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.

  2. @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.

  3. MyFinancialObjectives says:

    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:)

  4. @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.

  5. MyFinancialObjectives says:

    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!

  6. Tem Roka says:

    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.

  7. Tem Roka says:

    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.

  8. 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 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.

  9. My experience w/ Discover Savings was exceptionally poor.  I have multiple other online accounts since early 2006 and am familiar with the process.  I opened the Discover account with the $500 min to test drive the exchange.  It took 8 days between opening the account and the money actually showing up at Discover!  I phoned a few times while waiting.  The CSRs were all very nice, and equally under-trained.  I asked the same questions each time, and received a different answer from each person I spoke with.

    Each CSR repeatedly assured me this extra long wait was merely because it was the initial transfer, but subsequent transfers would move much more quickly.  Once my $500 posted I decided to do my own test. 

    Utilizing the same linked account, I made a transfer to my Discover account and 5 minutes later made a transfer to another online account.  Three separate banks.
    The following day my linked account and other online account both showed a pending transaction. The 2nd day showed the funds removed from the linked account & posted to the other online account.
    With Discover, the money immediately disappeared from my linked account & 3 days later I am still waiting for it to post to the Discover account.  It is not even listed as pending on my Discover account.

    Once the funds are finally posted, I will transfer all of the money out and close the Discover account.  My genuine concern is how many weeks it will take for this to happen