Save money and be informed. CreditDonkey is a bank comparison and reviews website. This website is made possible through financial relationships with card issuers and some of the products and services mentioned on this site. Advertiser Disclosure†
Updated January 11, 2024

Discover CD Rates Review

Read more about Discover Bank
Editorial Note: This content is not provided by the card issuer. Opinions expressed here are author's alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer.
Ad Disclosure: This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. You help support CreditDonkey by using our links. (read more)

Maximize returns with Discover® Bank lucrative CD rates - no hidden fees. Read this detailed review.

While most known for their credit cards, Discover® Bank also has great banking products.

Their CD rates are far higher than what you'd get at most brick-and-mortar banks.

Take a look at Discover® Bank CD rates, account features, and fees.

Is Discover® CD Safe?
Discover is FDIC insured (FDIC #5649), just like a traditional bank. In the unlikely event that the bank closes, your account is insured up to $250,000. Discover is owned by Discover Financial, the issuer of the popular Discover It credit card.

What CDs are Available at Discover?

Discover offers fixed-rate CDs from 3 months to 10 years. There are twelve different terms to choose from, so you can pick the one that best matches your goals.

Your rate is locked in for the entire term to earn guaranteed returns. The minimum deposit to open is $2,500.

Pros:

  • Many term options
  • Longer terms earn higher APYs
  • No monthly fee
  • Daily compounding interest
  • 24/7 customer service

Cons:

  • $2,500 minimum deposit
  • Automatic renewal upon maturity (more below)

DISCOVER® BANK CD RATES

Discover offers higher interest rates with longer CD terms.

If you can commit your money for at least 1 year, you'd earn more with a CD than you would with a regular Discover® savings account (which offers 4.25% APY).

What is APY?
APY, or Annual Percentage Yield, is the amount of money your deposit accounts will earn in interest in one year. Unlike interest rate, APY takes in account how interest compounds over time.

How Discover® CD Rates Compare

Discover's CD rates are competitive with other online banks. Some, such as CIT Bank and Quontic Bank, may offer higher APY rates for different terms. Compare different banks for the term you want.

When compared to other banks with brick-and-mortar locations, Discover's CD rates are generally superior.

Fees and Penalties

Discover® CDs have no account opening fee, monthly maintenance fees, or money transfer fee. There is only a $30 fee for outgoing wire transfers to an external bank account.

Besides that, Discover charges a fee if you withdraw early. The longer the CD term, the higher the early withdrawal fee.

Discover's early withdrawal penalties are as follows:

TermPenalty
Less than 1 Year3 months simple interest
1 - 3 Years6 months simple interest
4 Year9 months simple interest
5 Year18 months simple interest
7 - 10 Years24 months simple interest

The penalty is automatically deducted from the amount you withdraw before the CD ends.

Banks with no minimum deposit CDs
Deposit requirements vary by bank. Discover Bank's required $2,500 miminum is on the higher side. Here's a list of banks that offer CD accounts with no minimum deposit:

  • Capital One
  • Ally
  • American Express

HOW TO WITHDRAW MONEY

Before Maturity
Withdrawing any of the money you deposited before the term ends will result in a penalty. But you can withdraw interest accumulated during the CD's term.

However, that interest will no longer compound, which lowers the total value by the end of the CD.

At Maturity
Discover sends alerts to all CD owners 30 days before your CD matures. Once the CD matures, you can:

  • Withdraw all of the money from the account
  • Reinvest into another CD of the same or different term

Discover gives CD owners a 9-day grace period after maturity to decide among the options. If you don't act by the end of the grace period, the bank will automatically renew your funds into another CD of the same term.

How Do CD Accounts Work?

A Certificate of Deposit (CD) is a type of deposit account offered by most major banks. Unlike a traditional savings, CDs "lock up" your funds for a set period of time (typically ranging from 3 months all the way to 10 years).

Banks typically charge a penalty if you withdraw money early. You also can't add more to the account after your initial deposit.

You get a fixed interest rate for the entire term of your CD. Usually, the longer the duration, the higher the APY (though it depends on the bank). Once the CD reaches maturity, you can take out both the initial investment and all accumulated interest.

WHO SHOULD GET A CD?

CDs are great for people who can afford to put aside money for a set amount of time. They're good for short-term goals. You can earn some guaranteed returns with no risk.

They're usually used for a specific goal like:

  • Major purchases (a car or engagement ring)
  • An upcoming vacation
  • Down payment on a home

You should never use a CD as your emergency fund or "rainy day fund," since you'll incur a penalty by withdrawing early.

Discover® Bank Customer Service
Questions about opening a Discover CD or other online banking needs? You can speak with a customer service representative 24 hours a day, 7 days a week by calling: 1-800-347-7000.

HOW TO GET STARTED

To open a Discover CD account, follow these steps:

  1. Visit Discover.

  2. Choose the "New to Discover" option if you've never opened an account with the bank before. If you already have an account, log into it. To open an account, you'll need your personal contact information including:

    • Name
    • Birthdate
    • Address
    • Social Security number
    • Employment status

  3. Choose the CD you want to open and enter your deposit amount.

  4. Once your application is approved, you have 45 days to fund the CD. Funding options include:

    • Wire transfer from another bank
    • Phone transfer (only for initially funding the account)
    • Mailing a check to Discover (payable to you with your CD account number on the memo line)

    Discover Bank Mailing Address
    Discover Bank
    PO Box 30417
    Salt Lake City, UT 84130

After that, your new CD is set up and can begin actively earning interest.

Other Discover Savings Accounts

Discover also offers a variety of other deposit accounts, including:

Online Savings
This account has no monthly maintenance fee or minimum deposit requirement. Here's what else it offers:

  • 4.25% APY
  • Daily compounding interest
  • Free online and mobile banking
  • FDIC insured

Federal law limits account holders to 6 withdrawals per month.

Money Market
This account lets you write checks, pay bills, and make debit card purchases. Other features include:

  • 4.00% for balances under $100,000; 4.05% for balances $100,000 and over
  • Mobile check deposit through the Discover app
  • Free debit card and checks
  • No fee ATM withdrawals at over 60,000 Allpoint® or MoneyPass® ATMs

In a J.D. Power banking study, it was found that customers were actually more satisfied with online banks than traditional physical banks. Online banks especially rated higher in areas of products & fees, communication, and problem resolution.

Discover Bank was one of the top three banks in terms of customer satisfaction, along with Charles Schwab and Ally Bank.

Bottom Line: Is Discover CD Rates Good?

Discover Bank's CDs offer competitive rates for those looking to boost medium to long-term savings. As always, you should shop around first to find the best product and rates for your financial goals.

Discover Bank
Member FDIC

Certificate of Deposit

  • 4.70% APY for 12-month term
  • 4.40% APY for 18-month term
  • 3.75% APY for 36-month term
  • 3.75% APY for 5-year term
Discover Bank
Member FDIC

Online Savings Account - Earn 4.25% APY

  • No fees
  • No minimum opening deposit
  • No minimum balance required
Chase
Member FDIC

Chase Total Checking® - $300 Bonus

Expires 7/24/2024
  • New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account with qualifying activities
  • Access to more than 15,000 Chase ATMs and more than 4,700 branches
  • Chase Mobile® app - Manage your accounts, deposit checks, transfer money and more -- all from your device.
  • JPMorgan Chase Bank, N.A. Member FDIC
  • Open your account online now
  • Available online nationwide except in Alaska, Hawaii and Puerto Rico. For branch locations, visit locator.chase.com.
  • Chase Overdraft Assist℠ - no overdraft fees if you're overdrawn by $50 or less at the end of the business day or if you're overdrawn by more than $50 and bring your account balance to overdrawn by $50 or less at the end of the next business day*
Bank of America
Member FDIC

Bank of America Advantage Banking - $200 Bonus Offer

Expires 5/31/2024
  • The $200 bonus offer is an online only offer and must be opened through the Bank of America promotional page.
  • The offer is for new checking customers only.
  • Offer expires 5/31/2024.
  • To qualify, open a Bank of America Advantage Banking account through the promotional page and set up and receive qualifying direct deposits totaling $2,000 or more into that new account within 90 days of opening.
  • Bank of America will attempt to pay bonus within 60 days.
  • Additional terms and conditions apply. See offer page for more details.
  • Bank of America, N.A. Member FDIC.
CIT Bank
Member FDIC

CIT Bank Platinum Savings - 5.05% APY

  • 5.05% APY with a balance of $5,000 or more
  • 0.25% APY with a balance of less than $5,000
  • $100 minimum opening deposit
  • No monthly maintenance fee
  • Member FDIC

Write to Anna J at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the Discover it® Cash Back has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

Compare:

Save money and build wealth. Sign up to get our FREE email newsletter.

About Discover Bank

Discover® Bank offers some of the highest interest rates for its savings account. In addition, Discover offers cashback checking. There are no fees for checking and savings accounts.

Next Page:

About CreditDonkey
CreditDonkey is a bank comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

About Us | Reviews | Deals | Tips | Privacy | Do Not Sell My Info | Terms | Contact Us
(888) 483-4925 | 680 East Colorado Blvd, 2nd Floor | Pasadena, CA 91101
© 2024 CreditDonkey Inc. All Rights Reserved.