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 (and as a bonus, their IRA CD).

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.

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

Discover Bank AppBeyond 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.

More About the Discover Bank IRA CD

Discover Bank is offering a 12-month IRA CD and a 10-year IRA CD (check rates).

A great retirement investing alternative that not many people have heard about is the IRA CD. That would be a CD inside of a Roth or Traditional IRA. With this approach, you get the security of a CD with the tax-advantages of an IRA.

As a reminder, an IRA is a tax-advantaged retirement account which you use to hold investments, like a stock, bond, or in this case, a CD. A CD is, of course, a certificate of deposit, which is a deposit product with a fixed term and rate. They are also FDIC insured.

Discover Bank is currently the only bank that I know of offering an IRA CD. Their IRA CDs range anywhere from 3 months to 10 years.

  • Discover Bank 12-month IRA CD
  • All Discover Bank IRA CDs

So, who should consider an IRA CD? Ultimately, you need to be making your investment decisions. There is no one-size fits all investment plan. But generally speaking, here’s who should consider an IRA CD:

  • CD investors that want to pay less in taxes.
  • Retirement investors who want an alternative to their MMF to meet their cash asset-class requirements.
  • Beginning investors who want to start an IRA but don’t know about other investment asset classes.

I have faith in the American business for the long-term. For this reason, and being the young guy that I am, 🙂 I stay with domestic stocks for a large percentage of my portfolio.

But with the economy still on shaky ground, and some discussing another possible market crash, some investors may be looking for a safe, secure place to continue investing for retirement.  This approach makes sense for a lot of people. If you’re looking to preserve capital (i.e. keep your retirement money safe), the typical places to turn include a money market fund within your retirement account, or a simple CD or savings account.

MMFs don’t have FDIC Insurance or a return on your money, and CDs outside of an IRA aren’t able to achieve extra tax savings. The IRA CD brings them both together. Learn more about IRA CDs by visiting

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.

Avatar About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.


    Speak Your Mind


  1. 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

  2. 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.

  3. 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.