Discover® Cashback Debit Checking
Discover’s checking account is somewhat unusual in the banking world. That’s because—similar to many of Discover’s credit card offerings—the checking account earns cash-back rewards. With the Discover® Cashback Debit Checking account, customers can earn 1% cash back on up to $3,000 in debit card purchases each month. See website for details.
If you maxed out the $3,000 monthly limit, you would earn $30 cash back every month. Over a year, you would earn $360 cash back just by using your debit card for purchases. If you only spent $2,000 in debit card purchases monthly, that’s still $240 cash back over a year.
Another feature that Discover is known for with its checking accounts is not charging fees. There are no fees for account maintenance, ordering checks, in-network ATM use, online bill pay or replacement debit cards. Discover Cashback Debit accounts have no minimum balance requirements or activity requirements.
Discover® Savings Account
Discover Bank offers an online savings account that pays a competitive 4.30% APY. Interest compounds daily and pays out monthly.
There are virtually no fees associated with the Discover® Bank Online Savings Account. There’s also no minimum balance requirement. Compare that to Bank of America Advantage Savings, which requires a $500 minimum balance to waive its $8 monthly fees.
Discover® Money Market Account
Money market accounts take the earning power of a savings account and also give access to checking features for a more versatile account. The Discover® Money Market Account provides customers with ATM access, a debit card and check-writing capabilities.
Convenience isn’t the only high point for Discover’s money market accounts. These accounts offer high earning potential. It currently offers a 4.15% APY for balances under $100,000 and 4.20% APY for balances $100,000 and over.
Discover’s money market accounts have no fees and no minimum balance requirements. Money market accounts allow you to earn more interest than you would with a traditional checking account.
Discover® CDs
Discover® Certificates of Deposit are versatile high-yield accounts that offer guaranteed returns for customers. Discover CD terms range from three months to 10 years, depending on your needs.
Discover offers competitive returns on its CDs that are a bit lower than the best CD rates on the market. Here’s a look at the interest-earning potential of Discover’s CD accounts at different term lengths with an initial deposit of $10,000:
| CD Term | APY | Interest Earned on $10,000 |
|---|---|---|
3 Months | 2.00% | $49 |
6 Months | 4.25% | $210 |
9 Months | 4.25% | $316 |
12 Months | 4.80% | $480 |
18 Months | 4.50% | $682 |
24 Months | 4.00% | $815 |
30 Months | 3.75% | $963 |
36 Months | 3.75% | $1,167 |
48 Months | 3.75% | $1,585 |
60 Months | 3.75% | $2,020 |
84 Months | 3.75% | $2,938 |
120 Months | 3.75% | $4,448 |
Discover offers a total of 12 CD term lengths.
CD accounts through Discover have a $2,500 minimum deposit. If for some reason you need to access your funds before they reach maturity, you can withdraw them, but you’ll have to pay a penalty. The early withdrawal penalty will depend on the specific length of the CD term. The penalty on a CD with a term under one year is three months’ simple interest.
Opening a CD account is generally considered to be a safe investment because you have FDIC insurance and a guaranteed return, no matter what the market does. Your CD rate is locked in for your term length. The longer your CD term, the higher the rate you’ll receive. You also can create a CD ladder, using Discover CDs with different maturity dates, to build in some flexibility specific to when you withdraw funds.
Discover® IRA CDs*
Another option available through Discover is IRA CDs. Customers can choose between Roth IRA CDs and Traditional IRA CDs, depending on their needs. Roth IRA CDs:
- Are funded with after-tax dollars
- Contributions aren’t tax-deductible
- Earnings are tax-free
- Contributions can be withdrawn at any time without IRS penalty
Traditional IRA CDs are set up differently. Traditional IRA CDs:
- Are funded with pre-tax money
- Have tax-deferred earnings
- Contributions can be tax-deductible up to specific limits
- Funds can’t be withdrawn without a penalty until age 59½
IRA CDs through Discover can be funded with money from other retirement accounts. Customers also can transfer an IRA from another financial institution into a Discover IRA CD. Discover’s IRA CD terms range from three months to 10 years, and they pay similar APYs to Discover’s regular CDs. Discover IRA CDs can be opened with as little as $2,500.
