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Discover Bank® (Member FDIC) pays a much better savings rate than most traditional banks.
With fewer overhead costs than their brick-and-mortar counterparts, the best online banks often pass savings on to customers through better rates and lower fees — and Discover Bank (FDIC Insured) shines on both counts.
What is a Discover Savings Account?
Discover® Online Savings Account
Discover Bank, Member FDIC
Insider’s Rating
4.75/5
Perks
Earn 4.25% Annual Percentage Yield (APY). $0 minimum deposit. FDIC Insured.
Fees
no monthly service fee
Annual Percentage Yield (APY)
4.25% (as of 3/14/24)
Minimum Opening Deposit
$0
Pros
- Competitive APY
- No monthly service fee
- No opening deposit
- No insufficient funds fee
- No excess withdrawal fee
Cons
- Only 1 branch location
- No debit card unless you open a checking account
Insider’s Take
The best high-yield savings accounts offer competitive interest rates and low fees, and the Discover Online Savings Account comes with both. The minimum opening deposit might be especially attractive to new savers who don't meet the higher initial deposits some banks require.
Product Details
- No monthly balance requirements
- 100% US-based customer service available 24/7
- No hidden fees
- Interest compounded daily, paid monthly
- FDIC insured
Discover offers one main savings account, the Discover® Online Savings Account. It is a high-yield savings account, offering higher rates than many brick-and-mortar banks do. It also doesn't require a minimum opening deposit or monthly service fee.
Discover also offers more specialized types of savings accounts, such as certificates of deposit and a money market account.
Discover Savings Rates
Discover Bank (FDIC Insured) is an online bank and payment services company headquartered in Chicago. The Discover Bank savings account interest rates for the Discover® Online Savings Account are 4.25% (as of 3/14/24) APY (Annual Percentage Yield), which is drastically higher than the average savings account interest rate.
There is no monthly service fee and a $0 minimum deposit, and you'll earn the same rate regardless of your balance.
Discover Savings Rates Pros and Cons
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Key Features and Benefits for Discover Savings Accounts
Current Discover Savings Interest Rate
Discover offers a much higher interest rate than many large banks do, giving 4.25% (as of 3/14/24) on its savings account.
If you have a Discover credit cardand want to keep your finance products at the same place while still earning a good rate, this might be a good choice for you. However, if you're only interested in getting the best possible rate, the best high-yield savings accounts of 2024 have higher rates.
Discover Savings Monthly Maintenance Fees
The Discover® Online Savings Account does not charge any monthly maintenance fees, making it a free savings account. It also doesn't require a minimum opening deposit or charge insufficient funds fees, making it a good bank if you want to avoid bank fees.
Online and Mobile Discover Savings Access
You can access your Discover® Online Savings Account through Discover's website or through their mobile banking app. Their mobile banking app is well-rated on both Google Play and the Apple App Store, so you won't have to worry about a poorly-optimized mobile banking experience.
Discover Customer Service and Support
Discover is a bank with 24/7 customer service, which you can access via their phone lines. You can also send a message to customer service via their website or app. However, because Discover is an online bank, you won't be able to go into a branch to get in-person help.
How to Open a Discover Savings Account
Step-by-Step Guide to Opening a Discover Savings Account
Since Discover is an online bank, you won't be able to open an account in a physical branch. You can open a savings account either by calling customer service or by using Discover's website or app. The information you need to open a Discover account is similar to what you need to open a bank account in general; you'll need to provide some personal information to open an account, such as your name, Social Security number, and address. You can generally open an account in minutes if you have your information prepared.
Discover Savings Initial Deposit and Minimum Balance Requirements
The Discover® Online Savings Account does not require an opening deposit to open a savings account. It also doesn't require you to keep a certain amount of money in the account to avoid monthly service fees, either, so you don't need to worry about facing penalties for not initially depositing money into your account.
Managing Your Discover Savings Account
Tips for Maximizing Savings with Discover
The good news is that the Discover® Online Savings Account is easy to manage. You don't need to have a certain amount of money to earn the best interest rate or to avoid fees, so you don't need to jump through hoops to make sure you're maximizing savings. That being said, using budgeting apps or working your savings account into your budgeting plan will help you make the best progress towards your savings goals.
Understanding Fees and Charges from Discover
The only fee that Discover charges is for making an outgoing wire transfer. If you need to make a wire transfer, you'll need to pay $30. However, incoming wire transfers don't cost you any money, whether they're domestic or international.
Discover Savings Rates FAQs
What types of savings accounts does Discover Bank offer?
Discover offers one savings account, a high-yield savings account. A high-yield savings account is an account that online banks and credit unions offer that pays above-average interest rates on deposits. The Discover® Online Savings Account pays 4.25% (as of 3/14/24) APY, well above the national average.
Is the Discover savings account worth it?
The Discover® Online Savings Account may be worthwhile if you want to open a high-yield savings account from a popular online bank. There are other online financial institutions that pay a high savings rate right now, but it still could be a good choice if you want to do all your banking with one institution.
How competitive are Discover Bank's interest rates?
The Discover® Online Savings Account currently pays 4.25% (as of 3/14/24) APY. The average savings rate is only 0.45%, according to the FDIC. It's a good rate for a large bank, although there are some smaller online banks that offer a higher rate.
Are there any fees associated with Discover savings accounts?
No, the Discover® Online Savings Account doesn't have monthly account fees or minimum balance requirements. There are also zero fees for official bank checks, stop payment orders, insufficient funds, or bounced checks. Additionally, Discover doesn't charge an excess withdrawal fee (some banks charge a fee of about $10 if you make more than six monthly withdrawals from a savings account). The only fee it charges is a $30 fee for outgoing wire transfers.
Is it safe to keep money in a Discover savings account?
Yes, Discover Bank is a Member FDIC bank. Deposits held in a Discover Online Savings Account are insured for up to $250,000 per depositor, per account ownership type.
What is the disadvantage of a Discover savings account?
The Discover® Online Savings Account has a lot of perks, but it may not be right for everyone. Discover doesn't have any physical branches, so you should be comfortable banking online. One disadvantage is that the account doesn't come with an ATM card. You can withdraw money by transferring it to your Discover® Cashback Debit Account or an external bank account, though the latter option may take a few days. Or withdraw money with a domestic or international wire transfer or by requesting an official bank check.
Who is eligible to open a Discover savings account?
Discover Online Savings accounts are available to U.S. citizens or residents with a valid social security number or taxpayer identification number.
How can I maximize my savings with a Discover account?
To maximize your savings, set up automatic transfers to your savings account and avoid any unnecessary withdrawals to make sure your balance continues to grow.
How Discover Savings Rates Compare
Discover Online Savings vs. American Express® High Yield Savings Account
The American Express® High Yield Savings Account (Member FDIC) pays 4.25% (as of 4/25/24) APY (annual percentage yield), so your choice between the two banks will come down to factors other than their interest rates.
Neither bank has monthly service fees, excess transaction fees, or minimum opening deposit requirements. Both banks offer 24/7 customer support, a highly rated mobile app, and various banking products, including checking accounts, CDs, credit cards, and personal loans.
One noteworthy distinction when it comes to comparing Discover savings accounts to other banks pertains to mobile check deposits. With American Express National Bank (Member FDIC), you can deposit up to six checks totaling $50,000 during any seven-day period, with a limit of $25,000 per check — a flexible limit compared to many online banks. Discover's online disclosure doesn't specify limits; however, a customer service representative told us the limits are dynamic and new customers might start with a monthly limit of about $500.
You can't go wrong with either account in terms of interest rates and fees. Still, American Express National Bank may be the better option if you want more flexibility regarding mobile deposits. Otherwise, the decision may come down to your preferences and previous experiences with either bank.
American Express National Bank Review
Discover Online Savings vs. Capital One 360 Performance Savings
Capital One 360 is a suite of banking products from Capital One, one of the nation's largest banks by assets. While Capital One is primarily an online bank, it has physical branches in a handful of states and about 50 cafés (a cross between a bank branch and a coffee shop). Discover is an online-only bank, so it doesn't have any branch locations.
The Capital One 360 Performance Savings account offers a 4.25% APY on any balance. The interest in Discover's account compounds daily, while Capital One's interest compounds monthly. Depending on how much money you keep in savings, this may or may not make a significant difference.
The banks share similar features, including zero monthly fees or overdraft fees, a $0 minimum opening deposit, and no requirements to earn the APY. Both banks offer mobile check deposit with dynamic daily and monthly limits. Discover comes out ahead with 24/7 customer service; Capital One has live support seven days per week, but from 8 a.m. to 11 p.m. ET.
Discover and Capital One offer such similar rates, fees, and features that deciding between the two can be tricky. Ultimately, customers who live near a Capital One branch or café might choose it over Discover for the convenience of in-person banking. Discover might be a better fit if you prefer 24/7 customer support.
Capital One 360 Review
Is a Discover Savings Account Right For You?
The best high-yield savings accounts offer competitive interest rates and low fees, and the Discover® Online Savings Account comes with both: You'll earn 4.25% (as of 3/14/24) APY while paying zero account fees. The $0 minimum opening deposit might be especially attractive to new savers who don't meet the higher initial deposits some banks require.
Why You Should Trust Us: How We Reviewed Discover Online Savings
We rate banks on a scale from zero to five stars, with five being the most favorable. For our Discover® Online Savings Account review, we used Business Insider's savings account methodology, which considers minimum opening deposits, monthly service fees, interest rates, customer support, mobile app ratings, and the company's ethics.
When considering whether or not Discover is right for you, consider its additional product lines:
- Best Discover Credit Cards
- Discover Student Loan Review
- Discover Personal Loan Review
- Discover Home Loans Review
Jean Folger has 15+ years of experience as a financial writer covering real estate, investing, active trading, retirement planning, and retiring abroad. She is co-founder of PowerZone Trading, a company that has provided programming, consulting, and strategy development services to active traders and investors since 2004. Previously, Jean was a real estate broker, an English teacher, and a trip leader for an adventure travel company.
Personal Finance Insider editorial fellow
Kit Pulliam (they/them) is a banking expert who specializes in certificates of deposit, savings accounts, and checking accounts. They’ve been reporting, editing, and fact-checking personal finance stories for more than four years.ExperienceKit has spent their career making complicated concepts more accessible to the average person. As a tutor in math and reading comprehension after college, they melded the certainty of numbers with the flexibility of words, a skill that has served them in the personal finance field since.Before Business Insider, Kit was an editorial specialist for Tax Analysts, diving into the tax code to help readers get the best information about a confusing but necessary subject.They find banking similar to taxes in that way: There are some things everyone needs to know because just about everyone needs to work with a bank — and you don’t want to end up with an account that doesn’t serve your needs.As interest rates change, they enjoy the fast pace of reviewing rates for products like CDs and high-yield savings, which can change daily and have a direct impact on readers’ money.ExpertiseTheir expertise includes:
- Certificates of deposit
- Savings accounts
- Checking accounts
- CD rates
- Bank reviews
EducationKit is an alumnus of Vanderbilt University, where they studied English and psychology and received the Jum C. Nunnally Honors Research Award for their senior thesis.Outside personal finance, Kit enjoys reading, film, video games, and cross stitching. They are based in the DC area.
Compliance and Operations Associate
Evelyn He is a Compliance and Operations Associate on the Personal Finance team to ensure content accuracy and editorial independence so readers get up-to-date and objective financial advice.The compliance team's mission is to provide readers with fact-checked and current stories so they can make informed financial decisions. The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team.
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Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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