Discover CD Rates Review

Discover Bank's CD account offers high rates and no hidden fees. But is the term worth it? Read this review before you open a CD.

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Certificate of Deposit

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• 4.50% APY for 12-month term
• 4.30% APY for 36-month term
• 4.10% APY for 5-year term

While most known for their credit cards, Discover 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's CD rates, account features, and fees.

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

Member FDIC

Discover CD Rates

• $2,500 minimum opening deposit
• No fees
• FDIC insured

Term	CD Rates
3 Months	2.00% APY
6 Months	3.40% APY
9 Months	3.50% APY
1 Year	4.50% APY
1.5 Years	4.75% APY
2 Years	4.30% APY
2.5 Years	4.30% APY
3 Years	4.30% APY
4 Years	4.10% APY
5 Years	4.10% APY
7 Years	4.10% APY
10 Years	4.10% APY

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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 3.60% APY).

How Discover CD Rates Compare

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CIT Bank Term CDs - Up to 4.65% APY

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• Up to 4.65% APY
• $1,000 minimum opening deposit
• No monthly maintenance fee
• Member FDIC

Term	CD Rates
6 Month	4.15% APY
1 Year	0.30% APY
13 Month	4.65% APY
18 Month	4.60% APY
2 Year	0.40% APY
3 Year	0.40% APY
4 Year	0.50% APY
5 Year	0.50% APY

Member FDIC

CD Rates - Up to 4.45% APY

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• $500 minimum opening deposit
• FDIC insured

Term	CD Rates
6 Months	3.75% APY
1 Year	4.45% APY
2 Years	4.40% APY
3 Years	4.30% APY
5 Years	4.30% APY

Member FDIC

1-Month High-Yield CD - 4.50% APY

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• No fees
• FDIC insured

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:

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

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.

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
     
   • Discover CD offer code (if applicable)

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:

• 3.60% APY
  
• Daily compounding interest
  
• Free online and mobile banking
  
• FDIC insured

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

• 3.50% for balances under $100,000; 3.55% 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

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.