This online bank offers transparency and great rates on a number of essential financial services.
If your banking needs err on the basic side and you can’t remember the last time you stepped foot in a physical branch, you may want to consider an online-only bank. Discover currently operates the biggest online-only bank in the country, and its checking and savings accounts offer competitive rates and easy access.
What banking products does Discover offer?
- Discover Online Savings Account. This high interest savings account has no monthly fees or balance requirements, making it easier to save.
- Discover Cashback Debit. Earn 1% cash back on eligible purchases with this free, easily accessible checking account.
- Discover Money Market Account. Get 1.95% APY or more with this low-fee money market account that’s designed to help maximize your savings.
- Discover CDs. Discover’s certificates of deposit offer flexible terms, up to 3.05% APY and have almost no fees.
How does it compare to other banks and services?Discover holds over $63 billion in deposits, making it the 31st-largest FDIC-insured institution in the country. While that’s only a fraction of the amounts held by the Big Four Banks, it’s the biggest online-only bank in the country, which is quite impressive considering it’s only been in business since 2007.
While it’s headquartered in Riverwoods, Illinois, it operates entirely online, meaning there are no physical branches.
Why should I open an account at Discover?
Opening an account with Discover means that you’ll have access to great rates, personalized customer support and wide range of services both online and through their mobile app. Some other benefits include:
- FDIC deposit insurance. Discover is FDIC-insured, which protects deposits up to $250,000 in the unlikely event that the bank fails.
- Security. This bank uses proactive fraud monitoring, $0 liability protection, bill pay protection and more.
- No hidden fees. Discover is completely transparent with regards to its fees, meaning you won’t find any unexpected charges to your account.
- Connected accounts. If you have more than one account at Discover, you’ll be able to connect them to manage all of your money in one place.
- Minimal fees. Discover doesn’t charge annual fees or incoming wire transfer fees, has no monthly minimum balance requirements and won’t charge you for official bank checks.
- Large ATM network. Discover offers access to over 415,000 ATMs with over 60,000 surcharge-free ATMs through Allpoint or MoneyPass networks.
- Comprehensive learning center. The Modern Money Blog helps customers learn about personal finance to promote responsible financial behavior.
What should I look out for?Discover is a popular bank that offers a number of benefits, but there are a few things to look out for:
- High minimum deposits for money market accounts and CDs. Discover requires a minimum deposit of $2,500 to open a money market or CD, which is higher than many of its competitors.
- One branch. Discover operates entirely online and only has one branch that’s located in Greenwood, Delaware. If you prefer to bank in person, this bank might not be for you.
- Small product selection. While Discover does offer the basics — checking and savings accounts, money market accounts and CDs — it doesn’t go too far beyond the essentials.
- Long processing times. Discover might put a hold on new transfers and it often takes a while to process mailed deposits.
- Difficult deposits. To deposit money, you’ll need to make an online transfer from another bank account, use mobile check deposit, set up direct deposit or mail a check payable to you with your account number on the memo line. You can’t deposit cash and the bank will not accept traveler’s checks.
- Withdrawal limits. Like all savings accounts, you’re limited to six withdrawals per month. If you exceed this limit, you’ll be charged a fee and risk having your account closed.
What do regulators and customers say?
Discover Financial is FDIC-insured, meaning that deposits up to $250,000 are protected by the FDIC if the bank were to fail. However, it holds higher ratings from the BBB and the top three credit ratings agencies, which have also forecasted it to have a stable and positive outlook. It’s officially accredited on the BBB website alongside an A+ rating, though it only holds a 1.5 out of 5-star rating from customers. Many customers express frustration with customer service, long wait times and poor communication.