Discover Bank Review 2023: Checking and Savings Accounts

Discover Bank is an online bank offering banking products that will cover most of your personal finance needs.
Discover Bank
  • Virtually no fees
  • No min. balance checking/savings
  • Access to 60,000+ no-fee ATMs
Overall Rating 4.5
The Penny Hoarder Overall Rating
Checking starstarstarstarempty star
Savings starstarstarstarempty star
Fees starstarstarstarstar
ATM access starstarstarstarstar
This is a review of Discover, which has an overall rating of 4.5 stars.

When you hear the name “Discover,” you probably think of a shiny blue Discover Credit Card. That’s understandable, as the Discover Card is one of the largest credit card issuers in the United States with approximately 57 million credit card holders.

But Discover didn’t stop with just credit cards. The financial services giant got into virtual banking with Discover Bank, an online bank that offers checking, savings and more.

Considering an online bank? The Penny Hoarder has rounded up the best online banks for 2023.

If you use a Discover Card, you may be inclined to pull your financial services together under one company. Your credit card, checking, savings and CDs could all be in one handy place.

Even if you aren’t an existing or prior customer, Discover’s banking services stand on their own, offering competitive rates, no required minimum balance for checking or savings accounts, and free overdraft protection.

But is that the best choice for you and your finances? Our review will give you an honest look at the bank’s checking and savings features and other financial services Discover offers, so that  you can make an informed decision about where you do your banking.

Discover Checking Account

Discover Bank’s checking account is actually called the Discover Cashback Debit account, but it operates much like a standard checking account with a few additional benefits — mainly no minimum deposit and no monthly fees. Now, at the moment, Discover is not accepting new applications for Cashback Debit accounts, but on its website, you can sign up to be alerted once applications are back open.

While it’s possible changes could be on the horizon, here’s what to know about the account as it’s currently set up.

Cashback Debit

Best for No Fee Checking

4 out of 5 Overall

Key Features
  • No minimum opening deposit
  • No monthly fee, balance, or activity requirement
  • 1% cash back on debit card purchases
Discover’s Cashback Debit account offers a simple, free checking service. This account doesn’t earn interest, but does reward you with 1% back on your Discover debit card purchases up to $3,000 a month.
Key Info

None, but 1% cash back on debit card purchases (on up $3,000 in purchases a month)
Monthly fee
ATM access
60,000+ nationwide
Minimum starting balance
Minimum balance required to maintain

More Information About Discover Cashback Debit

The Discover Cashback Debit’s claim to fame is that you can earn cash back without having to meet any complicated requirements. It’s simple. There is no minimum opening deposit, no balance or activities requirements, and no monthly maintenance fee–making it easy to get started.  

You also won’t get pinged with any additional fees. There are no fees for online bill pay and no overdraft charges. 

To opt for overdraft protection, simply link your account to another account, and Discover Bank will pull money from that account to cover the overdraft with no transaction fee. If you don’t opt for the protection, the bank will decline any transaction that will put your account into the red. We really like that this protection is offered for free. 

Like most online banks, you won't be able to deposit cash through the ATMs, but Discover does offer access to Zelle, a mobile application that allows for bank-to-bank transfers of money, so it’s easy to get your money where it needs to go.   

Finally, while you won’t earn interest on the money in your account, you’ll get 1% cash back on all of your debit transactions — up to $3,000 per month. That’s potentially an extra $30 coming your way each month.

Savings aren’t the only accounts where you can earn interest. These six banks are tops for high-interest checking accounts.

Discover Bank Online Savings Account

Discover Bank Online Savings Account is a high yield savings account that allows you to earn interest while you save. There’s no monthly maintenance fee or required minimum balance for your account, making it a pretty simple savings account to use.

Discover Online Savings Account

Best for a No Fee Savings Option

4 out of 5 Overall

Key Features
  • No minimum opening deposit
  • No insufficient fund fee
  • Competitive interest rates
The Discover Online Savings Account is an online high yield savings account offering competitive interest rates with no hoops to jump through.
Key Info

3.30% APY
Monthly fee
ATM access
60,000+ if linked to Discover Cashback Debit, no ATM access without
Minimum starting balance
Minimum balance required to maintain

More Information About Discover Online Savings

Discover’s Online Savings Account is a pretty solid option compared to other financial institutions on the market.  Currently, this Discover savings account offers 3.30% APY, which is ten the national average. Plus, with no minimum balance requirements, you’ll begin to accrue interest as soon as you have money in the savings account, whether it’s $5 or $5,000.

Again, we also like the promise of no fees (except for a $30 fee for outgoing wire transfers) and the access to Zelle and Discover’s mobile app for check deposits and transfers. 

There’s no free ATM card with the Discover Online Savings Account, so you won’t have physical access to your savings unless you also have a Discover Cashback Debit account. 

Like other banks, Discover Online Savings Accounts do limit the number of certain types of withdrawals and transfers to 6 per month. However, there is no limit to official checks you can have mailed to you and ordering these checks is completely free.

Discover Bank Money Market Account

The Discover Money Market Account combines the convenience of a checking account with the interest earning benefit of a savings account.

Money Market Account

Best for People with Large Bank Accounts

4 out of 5 Overall

Key Features
  • Large minimum deposit
  • Competitive interest rate
  • ATM access
The Discover Money Market Account offers competitive interest rates and ATM access. The only downside is the steep minimum starting balance of $2,500.
Key Info

3.20% - 3.25%
Monthly fee
ATM access
Minimum starting balance
Minimum balance required to maintain

More Information About Discover Money Market

Unlike a checking or savings account, money market accounts allow you earn interest and still have easy access to your cash. Accordingly, the Discovers Money Market Account allows you to do just that. The only major downside is the large minimum deposit of $2,500. 

The hefty initial deposit isn’t the only thing that makes this account best for big savers: it also offers higher returns for balances over $100,000. Account holders with balances over $100,000 receive 3.25% APY while account holders with balances under $100,000 get 3.20% APY. Both rates are competitive, but ultimately less than the interest offered by Discover Online Saving Account.  

The upside of a Discover’s Money Market Account is access to Discover’s vast network of no-fee ATMs. Discover has ATMs everywhere but we suggest you double check your location with their ATM Lookup because Discover does not reimburse any out-of-network ATM fees. 

What Other Services Does Discover Bank Offer?

Discover Bank is a full service online bank that covers more than just your savings and checking accounts needs. Among the additional services are:

  • Certificates of deposits
  • Retirement accounts
  • Discover Loans

Certificates of Deposit

Discover CDs offer competitive rates that vary depending on the length of term. Currently, Discover is offering 4.15% APY for 12 months, 4.30% for 24 months, and 4.40% APY for 5 years. We like the varied terms lengths and no account fees, but the $2,500 minimum deposit is pretty steep compared to other online CDs.

Retirement Accounts

Discover offers two types of retirement accounts: IRA CDs and IRA Savings.

Discover IRA CDs provide guaranteed returns because you lock in your rate for a set term. For example, Discover offers 4.30% APY for a 24-month term and4.40% APY for a 5 year term. Like a normal certificate of deposit, however, the money in your IRA CD is off limits until the term period is up.

If you’re looking for more flexibility, a Discover IRA Savings account might be a better option. This retirement savings account provides the tax benefit of an IRA with the flexibility of a savings account. Plus, unlike the Discover IRA CD, there is no minimum deposit so you can start saving right away.

How you deposit cash into either of your Discover retirement accounts will depend on whether you want a Roth or Traditional IRA-–basically, whether you want to pay before or after taxes. If you want to figure out which option might be right for you, check out our overview on Roth vs. Traditional IRAs.

Discover Loans

Discover offers several loans to meet your financial needs, namely Discover Home LoansDiscover Personal Loans, and Discover Student Loans. Each of the loans is upfront and clear about the cost of the loan, including a calculator that allows you to see exactly how much the loan will cost. We love the peace of mind this clarity affords.

Discover continues its no-fee format with their loans with no origination fees or other fees as long as you pay on time. Plus it offers other benefits like possible same day decisions for personal loans and a rate reduction for good grades on student loans. In short, Discover has some solid loan offerings.

Discover Mobile App

Discover Bank’s mobile app receives 4.9 out of 5 stars in the Apple App Store and 4.7 out of 5 stars in the Google Play Store. Both are pretty typical of what we’ve seen for other banking apps.

Their app has a simple login as well as the ability to set a “quick view,” which can give you an account snapshot without logging in at all. Once you’re in your account, you can transfer money, pay bills, freeze or unfreeze your cards, upload a mobile check deposit, or even put in a travel notification so you won’t have issues with your card while you’re on vacation.

Pros and Cons of Discover Bank

Discover Bank holds its own against other banks with its promises of no fees and cashback offerings, but online banking still makes some people wary. Here are the top advantages and disadvantages for Discover Banks so that you can make the best decision for your financial needs.

  • No monthly fees
  • Cashback on checking accounts
  • Large no-fee ATM network 60,000+
  • 24/7 customer service
  • Competitive interest rate rates

  • No physical branches
  • Steep minimum deposit for CDs and Money Market Account

Alternatives to Discover

As we’ve said Discover offers pretty good coverage of basic financial needs, but it’s not the only option on the market. If you’re still searching for your perfect bank, a good place to start is our Bank Reviews From Penny Hoarder Experts.

If you’re new to online banks and looking for more options there, look at our Best Online Banks for 2023 for a more comprehensive overview. While few offer the same no fee promise as Discover, many online banks offer options with higher APY, which is sometimes worth the extra required effort.

Or, if your needs are a bit more specific, you should check out our 7 Best Banks for Students, Best Banks for Small Business, or 6 Best Banks for Military.

Basically, if Discover doesn’t work, finding the right alternative is just a click away.

Frequently Asked Questions (FAQ) About Discover Bank

If you’re still figuring out if Discover Bank is the right bank for your financial needs, check out these frequently asked questions to answer any last quandaries.

Does Discover Offer Loans?

Yes, Discover Bank offers several different types of loans, namely personal loans, student loans, and home loans. Each of these loans offer competitive rates and no fees as long as you pay your payments on time.

Is Discover Safe?

Yes, using Discover Bank is safe. Discover Bank is a FDIC insured bank, meaning the government protects your money in Discover Bank upto $250,000. In short, your money is safe.

Is a Discover Bank Account Worth It?

Discover Bank is a good choice for most consumers. It has no monthly maintenance fees and no overdraft fees–plus access to 60,000+ no-fee ATMs. It’s simple to use and easy to get an account.

Discover Bank is entirely an online bank, however, so if you’re looking for brick-and-mortar banking, Discover Bank is not a good choice for you.

What Are the Benefits of Discover Bank?

Discover Bank offers convenient online banking that will fit the needs for most consumers. All of Discover’s banking accounts have no monthly fees or overdraft fees plus each account offers competitive rates to help you earn money as you save. They have a large ATM network and a solid mobile app, plus there are no minimum amount requirements in any of their basic savings or checking accounts. 

Discover's checking account does not allow you to earn interest, but does allow you to earn 1% cash back each month, and Discover saving account offers a competitive rate of 3.30% APY.

Contributor Whitney Hansen covers banking and investing for The Penny Hoarder. She also writes on other personal finance topics. Freelancer Sean Cudahy contributed to this report.