Discover Bank Review: Is It Right for You?

FT Contributor
A smartphone displaying the Discover mobile banking app.

Finding a quality bank that provides the financial services you need for low to no fees is an important part of your financial journey. You work hard for your money — don’t waste it on unnecessary bank fees and finance charges. For example, 98% of credit cards charge late payment fees which could blow your budget. Knowing this ahead of time can save you a lot of money.

Carefully reviewing the terms and conditions of the financial institutions you intend on doing business with is essential to ensure you don’t end up incurring more fees and debt. Here’s a detailed look at Discover Bank’s account offers, as well as the pros and cons of banking with Discover to determine if the bank is right for you.

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Discover Bank Financial Services

Discover Financial Services is best known as the issuer of Discover and Diners Club credit cards. The company also owns Discover Bank to provide consumers with online banking accounts, including checking, savings, money markets, and certificates of deposit (CDs). All banking tasks such as bill payments, transfers, and deposits are managed through Discover’s mobile banking app. Here’s a closer look at your account options:

Checking Accounts

Discover’s checking account doesn’t require a minimum balance and comes with no fees — even stop payment orders, insufficient funds, and checks are free. Besides the free checking perk, customers earn 1% cash back on debit card purchases of up to $3,000 per month.

Savings Accounts

The high-yield online savings account also has no fees — even for returned deposits, insufficient funds, or if you’re ordering official bank checks. Similar to Discover’s checking account policy, there is no minimum opening amount or monthly balance requirements. You’ll earn a 1.60% annual percentage yield (APY) on your savings account balance.

Money Market Accounts

A money market account is a hybrid between a checking and savings account. Discover Bank’s money market account pays you 1.45% annual percentage yield (APY) on balances of up to $100,000 and 1.50% annual percentage yield (APY) on balances over $100,000. Plus, you’ll get a debit card and checks to pay bills and make withdrawals.

Federal law limits money market and savings account withdrawals, transfers, and payments to just six per month. Luckily, ATM withdrawals from your money market account don’t count towards your limit of six withdrawals. To open a money market account, you’ll need to deposit an opening balance of $2,500.

Certificates of Deposit

If you can afford to put your money in a savings account without needing to access the funds for an extended period of time, Discover Bank will reward you with a higher interest rate. Certificate of deposit (CD) accounts earn a 2% annual percentage yield (APY) with a 12-month term or commitment and a 2.10% annual percentage yield (APY) for a five-year term.

The Pros and Cons of an Account With Discover Bank

It’s wise to compare banks before you choose the best bank for your needs. Weigh the following benefits and drawbacks of banking with Discover Bank before you decide.


  • Cash bonuses for savings: Discover Bank occasionally runs new account promotions offering a cash bonus of $150 or more.
  • A 1% cash-back rewards checking account: All purchases made with the debit card linked to the checking account earn you a 1% cash reward on purchases up to $3,000 per month.
  • High savings rates: You can earn between 1.45% and 2.10% interest on Discover Bank’s savings products.
  • A massive ATM network: You’ll have access to 60,000 ATMs nationwide.
  • FDIC insured: Your accounts are protected up to $250,000 when you bank with Discover.
  • No fees: There are no banking fees — even for items you’d expect to be charged for, such as official bank checks and paper checks.
  • No minimum balance requirements: You don’t have to worry about maintaining a minimum balance on any of your accounts.
  • User-friendly mobile banking app: The Discover Bank app is easy to use and doesn’t come with a big learning curve. You can deposit checks by taking a photo of the check. The banking app graphics are clean and easy to understand, so you can quickly get an idea of the state of your accounts.


  • Only one physical branch location: If you prefer to bank in-person, you’ll be disappointed with the lack of branches. Discover is essentially an online-only bank.
  • Mobile banking only: Some consumers are uncomfortable banking from their smartphones.
  • No cash deposits: The lack of physical branches means you won’t be able to deposit your cash. You’ll have to convert the cash into a money order and use the banking app’s mobile deposit feature.
  • No ATM card available for savings accounts: You’d have to transfer funds to your checking account to withdraw the funds at an ATM. Remember, you’re limited to only six transfers and withdrawals per month.
  • No interest-bearing checking accounts: Discover Bank checking doesn’t pay you any interest, but at least there are no fees.
  • No loan services available: The bank doesn’t offer customers any personal loans, mortgages, or auto loan products at this time.

Is Discover Bank Right for You?

Discover Bank is best for customers who don’t need to deposit cash and who receive their paychecks via direct deposit. If you’re comfortable doing your banking using the mobile banking app and don’t want to worry about getting hit with banking fees, Discover Bank could be right for you. Furthermore, you’ll earn a decent interest rate on your savings. Customers who prefer to have a relationship with a banker and don’t trust mobile banking technology should pass on Discover Bank.

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