Discover Bank Review: You Know the Card, but What About the Bank?
When many of us think of Discover, we think of credit cards (including the new Discover it card). However, Discover offers standard banking services as well as credit cards. In fact, Discover Bank features competitive yields on savings products and some loan products.
Discover markets is its savings account as "over 5X the National Savings Average," although the yields aren't the highest available. But they are high enough to justify considering an account with Discover Bank.
A Little History Behind Discover Bank
The Discover card was launched in 1986, but the bank is a more recent invention. The company likes to push that fact that the Brand Keys Customer Loyalty Engagement Index has ranked Discover (the card) #1 in customer loyalty for 17 years in a row.
Discover Bank cropped up during the boom in online banking that occurred a few years ago. The online aspect provides Discover with the ability to offer savings products to consumers, in addition to credit cards.
For the first quarter of 2013, Bankrate gave Discover Bank its 5-Star Safe & Sound rating. Even though Discover Bank is FDIC-insured, many consumers still like to see that their bank has good health.
Features and Benefits of Discover Bank
As you might expect, Discover offers credit cards, including the Discover it card, a version of the Discover it for students, and business credit card options. All of these credit cards are considered reasonably competitive and offer access to Discover's cash back program. In addition to the well-known credit card offerings, Discover Bank offers a range of savings products, as well as three loan products.
As of September 2014, Discover Bank offers 0.85% APY on its online savings account. This is high enough to remain competitive and be a top tier offering, but it's not the highest yield you'll find out there. There is no minimum balance requirement and no monthly fee. However, you do need $500 to open an online savings account.
Money Market Account
Discover Bank also offers a money market account. As of this writing, the APY on a money market account is 0.70% on deposits of between $2,500 and $99,999. Balances of over $100,000 pay a yield of 0.80%. You need $2,500 to open a money market account, and there is a $10 fee for months in which your average daily balance dips below $2,500. You can access funds via check, debit card, or online. However, this is still considered a savings account, so you are limited to six withdrawals a month.
Discover Bank offers competitive CD rates, with a one-year CD at 1.00% as of this writing. If you are willing to lock up the money for a longer period of time, the rates are above 1%. You need a minimum of $2,500 to open a CD account. There are also renewal options that make it easy to build CD ladders and renew your CD when the term is up.
You can include your retirement planning with Discover Bank. Discover Bank can help you rollover your 401(k) to an IRA, or to transfer your IRA. You can also include CDs in an IRA, and Discover Bank can help you do that, too. Although Discover Bank touts its IRA CD, the reality is that the virtually the same APYs are offered, and you don't get any truly special perks; you just hold the CD account in an IRA.
You can choose from three different types of loans with Discover Bank:
- Student Loans
- Personal Loans
Discover Bank touts its personal loan as one that can be used to consolidate debt as well as to finance larger purchases. There are also a variety of student loans to choose from, including those intended for graduate students as well as undergraduate students. It's even possible to get a bar exam loan designed to help law students pay for prep and the cost of the exam.
Discover Bank offers a mobile banking app that makes it easy to access your account from anywhere. You can manage your account from your mobile app, including taking a look at how much interest each account has earned. The mobile banking app from Discover also includes remote deposit. This is a convenient feature that many banks are adopting. It's also possible for you to schedule your bill payments using this app. There is a handy ATM locator that can help you access your money in the "real world" — no matter where you are.
It's also worth noting that Discover is compatible with Google Wallet, so you can add your credit card information to your digital wallet without too much trouble.
Educational Resources and Customer Service
You will find a number of educational resources on the Discover Bank website. There is a retirement planning center, as well as a number of helpful articles on financial management. You can also find an extensive help center that features FAQs related to various products and services. You can find contact information as well, including online contact, phone contact, and even snail mail contact information. Discover claims that it offers 24/7 assistance, so you can call anytime.
Discover offers its own shopping portal, which you can access from the Discover Bank website. If you have a credit card, you can get "super-charged" cash back at more than 200 retailers. For frequent shoppers, this can be a way to build up cash back even faster.
Discover Bank isn't particularly outstanding when it comes to online banking, but it is a solid choice. On savings products, you receive yields that are considered top tier. You can also get access to a different loan products that provide you with a range of options.
Hard-core rate chasers will probably find Discover Bank a bit tame. However, if you are looking for a reliable online bank with easy-to-use features and a mobile app, Discover Bank is a reasonably good choice.