Discover Bank Review: You Know the Card, but What About the Bank?

By Miranda Marquit on 2 August 2013 (Updated 17 September 2014) 2 comments

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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.

Online Savings

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.

CDs

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.

Retirement

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.

Loan Products

You can choose from three different types of loans with Discover Bank:

  1. Mortgages
  2. Student Loans
  3. 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.

Mobile Banking

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.

ShopDiscover

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.

Bottom Line

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.

Click here to apply now.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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I havent done anything with Discover in years. I had a credit card with them years ago and really enjoyed the card and the service they offered. But I cut down to having just to cards and cut them out. If their banking service is anything let their credit card services were they should be in good shape. I am still a little on the fence about dealing with a bank without and brick and mortar places though.

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Michael

Discover Bank has been a nightmare. I had a check that I had overnighted to them and was told that it would post to the account the same day. It never did. When I called they informed me that it would be four days to post so I waited the 4 days and the funds never became available. I called and they said 4 business days and that it would post the next day. I checked the next day and nothing. When I called them back they then informed me that it wouldn't post till after the weekend. I tried to explain to a supervisor that I have been given the wrong information all week. I asked if there was anything they could do and she said no. I then asked the supervisor to listen to the calls she said she was hesitant to listen to the call because it wouldn't change anything. On top of all this the account was compromised due to the Target security breach sending my account into the negative. i asked to have all the fraud charges disputed and to this date I do not see any credits for these. Discover Bank is a joke.