Are you looking for a new online savings account with high interest rates?
Not long ago I was looking for another online savings account that offered better interest rates than I was currently getting, and easy access. My research led me to open a Discover Bank account and I thought I would share a little bit about their bank. If you are looking for a new online bank, then Discover is one worth consideration as they currently offer one of the best online savings accounts based on criteria such as interest rates, ease of use, and bank features. Interest rates at Discover Bank are currently over 5 times the national average – which was enough to pique my interest!
Discover Bank Overview
Discover Bank has been around since the year 2000, when Greenwood Trust Company joined Discover Financial Services, and changed its name to Discover Bank. Greenwood Trust Company was also the issuing bank for Discover Credit Cards. Even though Discover Bank has been around for over a decade, I didn’t know they had a bank until about a year ago, when they began more heavily promoting their online bank (I currently use a Discover Business Card, so I probably should have known this!).
Discover Bank Products
Along with their well known credit card products, Discover Bank offers a wide range of banking and other financial products, including an online savings account, checking accounts, money market accounts, CD’s, and IRAs.
All of these accounts share the following common features: Interest rates over 5x national average, 24/7 Live Customer Service, Online Account Management, FDIC Deposit Insurance up to $250,000 per individual account holder (FDIC certificate 5649).
Setting up and using an online account is incredibly quick and easy. There are some brief instructions at the end of this review showing how to open an account. As for ease of use, I give it 5 stars out of 5. I haven’t had any issues linking any of my other bank accounts to my Discover Online Savings Account, and transfers are free, quick, and easy.
Right now I primarily use my Discover account to maintain my emergency fund. I use it to hold cash that I want to earn higher than average interest on, but that I don’t need right away. If I need it I can get it to my primary account within about two days. However, you can easily use this as your primary account as it is easy to link a Discover checking account, your Discover credit card, online bill payments, and just about anything else you need to do.
Here is some more info about their other products:
Discover Bank Online Savings Account
You need a minimum of $500 to open a Discover Bank account, but there is no minimum daily balance, there are no fees, and Discover Bank currently offers some of the highest rates in the US. Discover Bank offers great interest rates – usually near the top in the nation.
As I mentioned in the previous section, it’s quick and easy to link your Discover Bank savings account to any other bank account you may have, giving you quick access to high interest rates, but easy access to your funds if you need them.
Discover Bank CD’s
Like most banks, Discover offers Certificates of Deposit (CDs) with higher rates depending on the length of the term. You can take out a CD for as little as three months or as long as 10 years. The minimum deposit is $2,500 and the interest rates increase the longer you lock your money into a CD.
Based on what I have seen at BankRates and a few other interest rate aggregator sites, Discover Bank has very competitive CD Rates. Because the rates change frequently based on length of the CD and other factors, I can’t list them all here, but you can find current Discover Bank CD Rates by visiting their site.
Many, but not all online banks offer IRA CDs. Personally, I prefer to open IRAs at a brokerage over banks, but I understand the need or desire to use CDs as an investment vehicle, particularly if you want an investment with a guaranteed return and no risk. Discover Bank offers IRA CDs up to 10 years in length.
Discover offers both a Roth IRA and tradition IRA CD. Just like your Roth IRA in your brokerage account, you invest after you pay the taxes on the money and it grows and is withdrawn tax free. The Traditional IRA CD has slightly different tax benefits – you invest before paying taxes on the income, the account grows tax free, and then you pay taxes on the money you withdraw.
If you are looking at doing this for the long term by setting up a CD ladder, then the CD rates you get from Discover Bank are very competitive. A Discover Bank IRA CD will allow you get both guaranteed savings and the tax benefits from a retirement account. If variations in the stock market concern you or you want to have guaranteed income without the possibility of losing money, then a CD is a nice way to steady out a portfolio that is heavy on stocks.
Discover Money Market Account
Discover Bank money market accounts have a minimum opening balance and minimum daily balance of $2,500. These accounts are similar to a high interest checking account, but are limited to 6 withdrawals per month. They are usually good for paying bills and gaining access to your funds more easily than with a standard savings account. However, you need to maintain a balance of $10,000 to have a comparable interest rate to the savings account. The interest rates frequently change, You can find Discover Bank Money Market rates by visiting their site.
See more about product offerings and rates at http://www.discoverbank.com/
Opening a Discover Bank Account
Opening a Discover Bank account is quick and easy. It is a 5 step process which can be quickly handled online. Like opening most financial accounts, it takes about 15 minutes and requires some personal information including your name, birthdate, and SSN.
- Step 1. Go over the DiscoverBank.com
- Step 2. Enter personal info. I opened a joint account, so I had my wife’s info at hand.
- Step 3. Fund the account. You can fund your new Discover Bank account with an ACH transfer, from another checking account, or by wire transfer if you wish.
- Step 4. Verify information and electronically sign your application.
- Step 5. Verify information against your credit report (a common form of identity verification for many online financial applications. You will probably be asked questions regarding any loans or credit accounts you have opened).
That’s it! Afterward you will receive a verification e-mail. In a few days you will receive a welcome package in the mail.
Discover Bank Customer Service
So far I have only had to contact customer service once (directly after opening my account) and they were prompt and courteous, which is more than you will find at the customer service for some banks.
Discover Bank contact information
- Customer service: 1-800-347-7000
- Bank website: http://www.discoverbank.com/
- Headquarters: 502 E. Market Street, Greenwood, DE 19950