[Update June 25, 2020: Discover Bank lowered the APY on all of their CDs by 0.05 – 0.10% APY.]
[Update June 4, 2020: Discover Bank lowered the APY on all CDs.]
[Update May 28, 2020: Discover Bank lowered the APY on all deposits with terms greater than 12 months. Making this the the third time in a single month in which Discover bank has done that.]
[Update: May 19, 2020: Discover Bank lowered the APY on CDs with terms of 12 months and higher. Short term deposit rates remain unchanged.]
[Update: May 5, 2020: Discover bank lowered the APY on CD terms of 30 months and higher. Shorter term deposits remain unchanged.]
Ever since Sears first introduced the Discover Credit Card back in 1985, the Discover Bank brand has largely become a household name.
Although the bank is often associated with their popular credit cards, they also have a suite of online savings accounts and certificates of deposit with annual percentage yields far above the current national average.
If you’re in the market for an FDIC insured bank CD, Discover Bank is certainly worth exploring.
Discover Bank CD Rates
As you can see the real jump in APY comes at 1 year mark. If you’re open to tying up funds for 12 months, then this is likely the optimal deposit product for you if you choose to go with Discover Bank.
After the 12 month term, the APY doesn’t increase proportionately with the associated term increase, therefor we wouldn’t recommend opting for a longer duration CD with Discover Bank.
How Do Discover Bank CDs Stack Up Against The Competition?
All of Discover Bank’s CDs come with a minimum deposit requirement of $2,500 which is relatively steep compared to other online banks offering FDIC insured certificates of deposit products.
On the other hand, their interest rate and APY are almost always among the top yielding banks nationally for CDs.
In fact, on the CD section of Discover Bank’s website (shown above), they have a very helpful interactive widget that allows you to add other banks and compare current deposit rates. So Discover Bank certainly isn’t shy about pitting their rates against their competitors.
More on Discover Bank’s CD Rate Comparison Widget:
They have a couple banks defaulted into the module when you start – US Bank, Bank of America and Capital One.
You can choose up to 6 different banks to compare, but only 3 at a time.
Unfortunately no credit unions can be added to the comparison module at this time.
Getting Started With Your Discover Bank CD
Purchasing CDs from Discover Bank is a very straight forward process. They have gone above and beyond in perfecting the online application process, optimizing their mobile apps for customer needs and making their fine print easy to understand and accessible.
Opening your Discover Bank CD
Once you’ve found the right CD term for you, you can navigate to Discover Bank’s online CD page here and click the orange “Open an Account” button found at the top right of the page and directly in the center under the words “Lock in your future.”
Now proceed through the application process.
Here are the things you’ll likely need to finish the application:
- full name
- home address
- date of birth
- phone number
- Social Security number
- employment status (employer and length of employment may be requested)
- driver’s license, passport or other form of photo ID
After your application is completed and accepted you can fund the account.
Funding your Discover Bank CD
Upon completing the application you will have exactly 45 days to fund this account. The account can be funded in one of 4 ways. Here are the 4 ways in which you can fund your account:
- Transfer funds from another bank account via an online transfer.
- Transfer funds from another bank account via telephone. This function is only available for your initial transfer. Call 1-800-347-7000 to get started.
- Download their mobile app from iTunes or the Google Play store and complete a mobile check deposit.
- Make a check out to yourself and send it via snail mail to the following address: Discover Bank P.O. Box 30417 Salt Lake City, UT 84130
Discover Bank CD Account Details
There are a few details to your Discover Bank CD that you should be aware of.
First, your deposit is federally insured by the FDIC up to $250,000 in case of bank insolvency during your deposit term.
Second, fees. While this account has very little to worry about in terms of fee’s there are a couple you should be aware of – most notably early withdrawal fees. If you need your funds in the case of an emergency an early withdrawal fee will be applied. That said, this is quite standard with any Bank CD and Discover Bank’s fees in this regard are on par with other major banks.
Discover Bank’s early withdrawal fee structure:
The only other fee you’ll need to be aware of is for outgoing wires. If you plan on moving any money out of the CD upon maturity you’ll incur a $30 fee per wire.
What Happens When Your Discover Bank CD Matures?
Exactly 30 days prior to your Discover Bank CD maturing, Discover Bank will send you a notification making you aware of the date.
Upon maturity you will enter what is referred to as a grace period. The grace period with Discover Bank CDs is 9 days. During these 9 days you can make additional deposits, withdrawal any interest or principal or change the term of your deposit. However, once you take any of the aforementioned actions, this will trigger the end of your grace period, even if the full 9 days are not up.
If you do nothing during the 9 day grace period your CD will automatically renew into the same CD term you had before with whatever current APY Discover Bank is offering on said term.
Earning and Allocating Interest On Your Discover Bank CD
You’ll start earning interest on your deposit the same day it is funded. The interest is compounded daily and returned to the deposit (or another Discover Bank account) once per month.
With the interest earned you can do one of two things:
- The do nothing / default option places the interest back into the CD to compound until maturity.
- If you’re living off of the interest as income, or for whatever reason want the interest to be accessible, you may have it transferred to another Discover bank account.
Discover Bank Customer Sentiment + Account Features
Discover’s performance as a bank is above average with user reviews hovering around 4 out of 5 stars on the top review sites.
The online institution simply has a reputation for being a stand-up company with total transparency, and it’s known for having a team of customer service representatives that are as helpful as they are speedy. User reviews reflect satisfaction with the bank, with only the occasional angry customer reporting excessively long transfer holds, unexpected account closures, and the like.
Likewise, the Discover app is top-notch. Millions of Apple and Android users agree that this mobile banking app deserves a near 5 star rating for a platform that’s almost as simple to use as it is functional. If you’ve read our mobile app reviews of other online banks you’ll quickly notice this is far from the norm. You can download their Apple app here and their Android app here.
Overall, Discover online and mobile banking platforms are user-friendly and representatives are knowledgable and friendly.
Discover has multiple phone lines devoted to various banking needs, and these are all open 24/7 year-round. To open or manage an account, call 1-800-347-7000. For online banking tech support, call 1-800-290-9885. For everything else, visit this page for the right number. Mail can be addressed to:
General Correspondence Discover Bank
P.O. Box 30416
Salt Lake City, UT 84130
Discover has only one branch (the bank’s headquarters in Delaware), but there is a sizable network of ATMs from which you can service your accounts at no cost.
Discover will allow you to make incoming or outgoing ACH transfers of up to $250,000 per month.
Discover Bank CDs consistently feature APYs that are significantly higher than the national average – usually just a handful of basis points away from the highest yielding accounts.
They have invested considerable time and resources into developing one of the most straight and easy to navigate online banks with account perks that outdo many of their competitors.
If you like all of your accounts under one roof, then Discover Bank is definitely worth the look. From online savings accounts, checking accounts, credit cards and CDs, Discover Bank has it all.