Discover CD Rates Review
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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
- 0.50% APY for 12-month term
- 0.60% APY for 36-month term
- 0.80% APY for 5-year term
While known for their credit cards, Discover is an online financial institution that also offers traditional bank accounts, including:
A 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.
Banks typically charge a penalty if you withdraw money early. You also can't add more to the account after your initial deposit.
During a CD's life, your savings accumulate interest at a fixed rate. The rate depends on the duration, which can typically range from 3 months to 10 years. Once the CD reaches maturity, you can take out both the initial investment and all accumulated interest.
Keep reading for a look at Discover Bank CD rates.
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.
DISCOVER BANK CD RATES
Discover CD Rates
- $2,500 minimum opening deposit
- No fees
- FDIC insured
| Term | CD Rates |
|---|---|
| 3 Months | 0.20% APY |
| 6 Months | 0.25% APY |
| 9 Months | 0.30% APY |
| 1 Year | 0.50% APY |
| 1.5 Years | 0.50% APY |
| 2 Years | 0.55% APY |
| 2.5 Years | 0.60% APY |
| 3 Years | 0.60% APY |
| 4 Years | 0.65% APY |
| 5 Years | 0.80% APY |
| 7 Years | 0.80% APY |
| 10 Years | 0.80% 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
CD Rates
- $500 minimum opening deposit
- FDIC insured
| Term | CD Rates |
|---|---|
| 6 Months | 0.55% APY |
| 1 Year | 0.60% APY |
| 2 Years | 0.75% APY |
| 3 Years | 1.00% APY |
| 5 Years | 1.11% APY |
CIT Bank Term CDs
- Up to 0.50% APY
- $1,000 minimum opening deposit
- No monthly maintenance fee
| Term | CD Rates |
|---|---|
| 6 Month | 0.30% APY |
| 1 Year | 0.30% APY |
| 13 Month | 0.30% APY |
| 18 Month | 0.30% APY |
| 2 Year | 0.40% APY |
| 3 Year | 0.40% APY |
| 4 Year | 0.50% APY |
| 5 Year | 0.50% APY |
Discover's CD rates are competitive with other online banks. Some, such as TIAA Bank and Synchrony Bank, may offer higher APY rates but usually require a higher minimum deposits than Discover's $2,500.
When compared to other banks with brick-and-mortar locations, Discover's CD rates are generally superior. Here's a look at the numbers:
| Bank | APY |
|---|---|
| Wells Fargo | Standard Term CD: 0.01% APY. Terms of 3 months to 1 year. Minimum deposit of $2,500. Bonus of up to 0.02% APY if you maintain a linked Portfolio by Wells Fargo relationship. |
| Citibank | |
| Bank of America |
Start by opening multiple CDs with varying terms. When the first CD reaches maturity, you reinvest the money (and accrued interest) into another, often longer-term CD. Repeat this with every CD in the "ladder."
Just be aware that once that money is deposited into a CD, you won't be able to access it again for the entire length of the term.
FEES AND RESTRICTIONS
The fee structure for CDs is listed on its website. Discover CDs all have a required $2,500 minimum deposit. But you'll pay NO:
- Monthly maintenance fees
- Charge to deposit via wire transfer from an external bank
Transferring funds to an external bank via wire transfer costs $30. Discover also charges an early withdrawal penalty as follows:
| Term | Penalty |
|---|---|
| < 1 Year | 3 Months Simple Interest |
| 1 Year to 3 Years | 6 Months Simple Interest |
| 4 Years | 9 Months Simple Interest |
| 5 Years | 18 Months Simple Interest |
| 7 to 10 Years | 24 Months Simple Interest |
The penalty is automatically deducted from the amount you withdraw before the CD ends.
Deposit requirements vary by bank. Discover Bank's required $2,500 miminum is on the higher side. Marcus by Goldman Sachs, for example, has a $500 minimum.
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.
WHO SHOULD GET A CD?
CDs are great for people who can afford to put aside money for a set amount of time. Often, they are used for a specific goal including:
- Major purchases (a car or engagement ring)
- Vacations
- 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.
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:
- Visit Discover.
- 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)
- Name
- Choose the CD you want to open and enter your deposit amount.
- Once your application is approved, you have 45 days to fund the CD. Funding options include:
- Wire transfer from another bank
- Transferring funds over the phone (which you can only do when 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 Bank 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:
- 0.4% APY
- Daily compounding interest
- Free online and mobile banking
- FDIC insured
Cashback Checking
This deposit account earn 1% cashback on up to $3,000 in debit card purchases each month. There are no fees or minimum deposit requirements, but the Cashback checking doesn't offer interest.
Other features include:
- No minimum balance requirement
- No fee for online bill pay
- No fee ATM withdrawals at over 60,000 Allpoint® or MoneyPass® ATMs
Money Market
This account lets you write checks, pay bills, and make debit card purchases. Other features include:
- Mobile check deposit through the Discover app
- Free debit card and checks
- No fee ATM withdrawals at over 60,000 Allpoint® or MoneyPass® ATMs
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.
Certificate of Deposit
- 0.50% APY for 12-month term
- 0.60% APY for 36-month term
- 0.80% APY for 5-year term
Discover Online Savings - $200 Cash Bonus
To get your $150 or $200 Bonus: What to do: Apply for your first Discover Online Savings Account, online or by phone. Enter Offer Code CY21 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted to account within 30 days of account open date. Maximum bonus eligibility is $200.
What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded, or affinity accounts provided by Discover. Eligibility is based on primary account owner. Account must be open when bonus is credited. Bonus will be credited to the account within 30 days of the account qualifying for the bonus. Bonus is interest and subject to reporting on Form 1099-INT. Offer ends 12/15/21, 11:59 PM ET. Offer may be modified or withdrawn without notice. See advertiser website for full details.
Chase Total Checking® - $225 Bonus
- New Chase customers enjoy a $225 bonus when you open a new Chase Total Checking® account and set up direct deposit
- Access to 16,000 Chase ATMs and more than 4,700 branches
- Chase Mobile® app - Manage your accounts, deposit checks, transfer money and more -- all from your device.
- Open your account online now
- Available online nationwide except in Alaska, Hawaii and Puerto Rico. For branch locations, visit locator.chase.com.
CIT Bank Money Market Account - 0.45% APY
- 0.45% APY
- $100 minimum opening deposit
- No monthly maintenance fee
HSBC Premier Checking - $450 Welcome Deposit
- Get a $450 Welcome Deposit for eligible new customers who open a new HSBC Premier checking account and complete the following qualifying activities.
- Open your new HSBC Premier checking account online by January 5, 2022; and
- Make recurring monthly Qualifying Direct Deposits totaling at least $5,000 from a third party to your HSBC Premier checking account(s) for 3 consecutive calendar months from the second full calendar month after account opening.
- You will automatically receive the $450 Welcome Deposit in your new HSBC Premier checking account approximately eight weeks after completing all qualifying activities. It's that simple.
- Deposit products are offered in the U.S. by HSBC Bank USA, N.A. 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.
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