I’ve opened an online savings account with American Express in the past, but they have lowered their rates a couple of times. I decided to begin looking around to see what else was available and found the Discover Bank Online Savings Account. After some reading and research, I decided that Discover Bank is probably the best current option for a high-yield online savings account.
Keep in mind that a savings account is best suited for short-term needs. The money is readily available for withdrawal, but the interest rates are quite low (meaning you might lose purchasing power due to inflation).
If you are looking to build wealth for retirement or other long-term goals, you should consider investing in stocks and bonds which have outperformed savings accounts significantly over time. If you’re looking for a place to start, I’ve written extensive reviews on great investment firms like Betterment and Wealthfront.
Now back to the Discover Savings review.
Discover has been around forever. The banking side of their business came about in the year 2000, after a merger with another firm. They now offer numerous different account and loan options. And of course, they issue the wildly popular Discover It Card that we love and use.
Discover Bank Online Savings Account Review
The Online Savings Account is the best option that Discover currently offers. It pays the highest interest rate and is the easiest to set up.
Opening a new account requires a $500 initial deposit, but after that time there are no monthly account minimums or maintenance fees.
As with all other online savings accounts, all transfer of monies is done online. You can send and receive money from almost any source, but the easiest way is to have a local checking account with a bank, and then this online savings account that is connected. This makes it easy to send/receive money when needed.
All online savings accounts, including Discover, impose a maximum limit of 6 money transfers per statement cycle. You are allowed only six (6) transfers from your Discover savings account to any other bank account. Deposits into the Discover Savings Account are not restricted.
If you exceed 6 transfers, you will be charged a fee. This rule applies to all online savings accounts, and is not unique to Discover.
Discover Savings Account Benefits
The Discover Online Savings Account has a number of different benefits and perks:
- 0.95% current interest rate. This is always among the highest rates currently available and interest rates will continue rising as the economy recovers and short-term interest rates rise.
- 24/7 live (U.S. based) customer support. Our interactions with Discover customer support has been stellar. They are kind, helpful, and can speak English well. As an added bonus, they’ve even sent us a gift card as a moving gift in the past.
- FDIC insurance up to $250,000. If anything should go wrong with Discover Bank or another party, the Federal government insures each account up to $250,000.
- No minimum balance requirement
- No monthly fees
- Interest is compounded daily and credited monthly.
- Auto Saver Plan: The Discover Savings Account allows easy automatic transfers from your personal checking account into your savings account each month.
- Discover Mobile Banking App: makes it easy to control everything from your smartphone or tablet. You can check your account balance, view recent account activity/earned interest, and make transfers. It works on Android, iPhone and Blackberry devices.
Opening a Discover High Yield Savings Account
Opening the Discover Bank Savings Account is easy and can be done online. It is a 3 step process which can be quickly handled online. Like most other financial accounts, it takes about 15 minutes and requires some personal information including your name, address, date of birth, and social security number.
- Step 1. Enter your personal info. You can choose an individual or joint account.
- Step 2. Fund the savings account with $500 minimum. You can fund your new Discover Bank account with an ACH transfer from another checking account (our choice), or by wire transfer.
- Step 3. Verify information and electronically sign your application.Verification might ask you about items on your credit report such as old addresses or loans. But it’s an easy process.
That’s it! You’ll be completely set to use your account and earn great interest rates moving forward.
That concludes my Discover Savings Account Review. If you’d like to start saving, you can Open a New Account at Discover Bank Online