Checking Account Review
Why It Pays to “Discover” Online Banking
For the longest time, banking to me seemed mostly like a practice in making the best of a bad situation. After all, how many people actively discuss what they enjoy about their bank? Instead, it’s often complaints about rising fees and buggy apps. Because of this and since I didn’t have any big issues with Wells Fargo and wasn’t paying any maintenance fees for my decades-old account, I assumed I couldn’t really ask for more.
That was until I turned my sights to internet banking. Suddenly, I learned that I could actually be earning on my savings while still avoiding fees. Since then, I’ve actually opened a few online bank accounts — but my first and most-used of these accounts comes from Discover Bank. So let’s dive into what advantages online institutions offer as well as what I like about Discover Bank specifically.
Editor’s note: This article was updated in June 2025 with the latest info.
Discover Bank Checking and Savings
Discover Bank Review: A Reliable and Solid Online Banking Option
4.5
Accounts offered
Savings, checking, CDs, money markets
FDIC Insured?
Yes
Discover may be more known for its credit card, but its banking accounts are worthwhile as well. With no fees to worry about, high APYs on savings, and 1% cashback on debit purchases (up to $3,000 per month in purchases), it’s a well-rounded option. That said, those who want the ability to visit a physical branch will be disappointed, plus the savings APYs aren’t always the highest. Still, it’s a solid and trusted option.
Pros
- Competitive APYs on savings
- 1% cashback on debit purchases
- No fees
- FDIC insured
Cons
- APYs aren’t the absolute highest
- Debit cards operate on Discover network
What Online-Only Banks Have to Offer
The way I’ve utilized my checking account over the past few years isn’t exactly normal or smart. Aside from receiving my direct deposit and being used to pay rent (back when we rented, that is), it basically acts as a slush fund for my wife and me that just sits there until we need it. That’s not a terrible idea but, then again, it doesn’t earn us anything either. That’s why I decided it would be better to open a real savings account that would at least get us some interest.
Brick and Mortar Rates
Way back when the notion that I should be setting up a real savings account occurred to me, my first thought was to just open a new savings account with Wells Fargo or perhaps a local bank in my area. However, I was shocked to learn that unless you have some serious bucks — we’re talking five figures here — you would only get a .01% interest rate on your account. Really?
I knew savings account rates were low but I didn’t know they were that low. Luckily, internet banks offer much better rates.
Internet Bank Rates
At the time that I was first looking at online banking options, savings account interest rates were already 100 times better than most big institutions, with APYs north of 1%. Since then, a lot has happened, leading rates to go sky high, crash back down, go up again, and then land somewhere in the middle. As I write this update in June 2025, Discover is currently offering 3.60% APY on savings, which is definitely solid.
Why I Went with Discover
Considering that the goal was to earn as much interest as possible, you may be wondering why I didn’t go with the likes of Synchrony, which tends to offer slightly higher rates than Discover. Truth be told, my main reason was that I already had a Discover It credit card and have been pretty impressed with my experience. I figured that having my credit card and other bank accounts under one roof made things easier and I seem to have been right about that. In fact, since the time that I first joined Discover Bank, they’ve upgraded their system so that you can access both credit and banking products with a single login where you previously needed separate usernames and passwords.
The Benefits and Drawbacks of Internet Banks
First, a big plus: unlike many too-big-to-fail banks, Discover Bank and many of their ilk don’t charge a maintenance fee or mandate a minimum daily balance. Moreover various online institutions have different policies regarding overdraft fees. Previously, Discover would waive the first overdraft fee of each year but, since then, they’ve done away with these fees entirely.
Notably, just like regular bank accounts, online bank accounts are FDIC-insured. To be clear, though, I’m talking about chartered banks — not FinTechs that partner with banks. Discover, Ally, and others are all fully licensed banks as is SoFi, which started as a FinTech but is now a full-fledged bank. If you’re ever unsure if a service is a bank or not, be sure to check the fine print.
As for the downsides, there’s no question that some will be concerned about the lack of a physical branch to go to. Personally, I rely so much on banking apps that I hardly remember the last time I visited a brick-and-mortar location. That said, the inability to deposit cash or a check in an ATM does mean that it can take longer to get your money into your account. In the case of cash, you may even have to rely on your “big bank” account to deposit the cash before transferring it to your online account. Such delays mean you’ll need to think ahead if you’re actively using these accounts to pay bills — but hopefully you’ll be able to work out the kinks with some practice.
My Experience With Discover Bank
It’s now been several years since I joined Discover Bank and, overall, it’s been a great experience. As I mentioned, even during lean times, my APY has far exceeded what I would have earned at a major, brick-and-mortar bank. However, I’ve also noticed a few changes to my accounts over time that have been both good and, well, less than great. Let’s take a closer look at not only my Discover Bank savings account but also my checking account.
Cash Back Checking Exists
Funny enough, when I first joined Discover, I didn’t just open a savings account — I actually opened a checking account as well. That’s because Discover Bank offers cash back checking, which I thought would be a nice addition to my banking lineup. At the time the deal was that users would earn $.10 back for each debit transaction, check written, and more. I managed to maximize these dime bonuses by only using my debit card for transactions that were under $1 and then transferring my acquired earnings to my Discover It card’s cashback stockpile.
Alas, Discover has since changed the structure of its cashback checking program, now offering 1% back on all debit card purchases. Admittedly, this doesn’t do much for me as my Discover It card offers the same and other credit cards I have do even better. That said, this is probably the better program overall and could be perfect for those who either cannot qualify for a rewards credit card or wouldn’t trust themselves with one.
For what it’s worth, I only recently came across a potentially great use for this 1% back deal. While using a credit card to pay taxes results in a fee that offsets much of the reward, debit card processing fees are much lower. In fact, Pay1040.com charges just $2.15 per debit card payment. To my surprise, even the Discover debit card showed this lower fee when I tried their fee calculator. With that in mind, the next time I need to pay taxes, I will definitely be trying this approach to earn 1% back on my payment.
Anyway, at times over the years, my Discover Bank has practically become my primary checking account. This is to say that it was where I’d write my rent checks from prior to moving to a place that offered online rent payment. To that point, a while back, I also got to see how Discover’s “First Fee Forgiveness” program worked as a mixup with my landlord resulted in an overdraft fee (that’s when I learned that postdated checks aren’t a thing). Although a $30 fee did briefly post to my account, a $30 credit was quickly issued since this was my first — and hopefully last — infraction. This was such a relief and made what turned out to be a frustrating situation at least a little bit better.
As generous as that “First Fee Forgiveness” program was, in 2019, Discover actually did away with fees altogether. Now, there are no overdraft fees, excessive withdrawal fees, stop payment fees, etc. Obviously, this is good news for customers… but hopefully you won’t need to overdraft your account anyway.
No Branch? No Problem
To be honest, the initial reason I decided to sign up for the checking account was because Discover debit cards offer access to more than 60,000 ATMs without a fee. This comes as the bank has partnered with both the Allpoint and MoneyPass ATM networks, giving them tremendous coverage. Since there’s not a Wells Fargo within a few hundred miles of my home I thought it would be wise for me to have a backup plan. Sure, this whole plan only saves me a couple of dollars per withdrawal but everything adds up.
Like many banks, Discover’s app also allows you to deposit checks into your savings or checking account just by taking a photo of it. You can also sign up for various bill pay options, although I have yet to explore those despite the length of time I’ve had my accounts. So I really can’t speak to how that works. Lastly, you can easily transfer money between your external and internal accounts using the app or website, so there really is no need for a branch.
App Update
In May 2021, Discover’s app — which supports credit card accounts as well as banking accounts — received a pretty notable update. Users can now access common banking features right from the home screen. For example, by swiping left on your checking or savings account balance, you can initiate a transfer or deposit a check.
Meanwhile, swiping right will display such info as your interest year-to-date or total Cashback Bonus. If you have a Discover credit card as well, this will also display on your dashboard and give you quick access to making a payment, viewing activity, seeing when your next billing due date is, and more.
That update only continued the trend of Discover’s app getting better with time. Personally, I’m a big fan of the aesthetic and functional changes made recently — and it’s also what reminded me to update this post! Therefore, even in a world of FinTechs, I think Discover’s technology still holds its own.
A Few Initial Issues
While I’m pretty satisfied with my account experience overall, there were a couple of problems I had when setting up my accounts long ago. First, when signing up on the website, I was shown my account numbers and then presented with the option to register my accounts for online access. There was just one problem: clicking the button took me away from the page with my account numbers and there was no way back to them.
I assumed this wouldn’t be a big deal as surely they must have sent me an email confirmation, right? Sadly, no — aside from that initial confirmation page I had no other way of knowing if my accounts were actually even opened until several hours later when I was notified that my funding transfers had gone through. This should have been a relief but, since none of these emails contained my full account numbers, I was now sending money to accounts I couldn’t access. To be fair, I could have called their helpline to retrieve the info I needed, but I instead opted just to wait until my paperwork arrived in the mail.
Obviously, this wasn’t exactly a deal-breaker, but I could see others being much more frustrated by such a situation than I was. I can also see some being upset that, in order to transfer between an external account and your Discover Bank account on the app, you must first add the external account information on the website. Again, not a huge deal but it is a little less elegant than you might want.
With all that said, this was several years ago now and was prior to a round of upgrades on Discover’s part. Therefore, I can only hope that whatever issues plagued me so many months ago have now been resolved. Considering I haven’t run into any issues since, I’m thinking they just might be.
Final Thoughts on Discover Bank
There’s no doubt about it: bringing my savings to internet banking accounts was among the smartest money moves I’ve made. No longer am I letting my cash just sit in a checking account doing nothing. Instead, I’m earning interest, which also encourages me to save even more. In fact, while I now retain several online accounts with varying amounts of money in them, my Discover accounts remain core among my lineup.
On the whole, I’d also say Discover Bank has improved even since my initially positive review. The merging of credit and banking accounts, sleeker debit card, and Apple Pay support have all been welcomed additions.
Plus, now that I know about my tax payment trick, I intend to take advantage of their 1% cashback debit card more. Having found myself fallible and accidentally bouncing a check, it was great to see the bank’s First Fee Forgiveness save the day (not to mention that they’ve only gotten sweeter as they’ve completely dropped fees).
For all of those reasons, I’ve found the Discover Bank account to be the perfect place to house my emergency fund and other extra cash. So, if you’re looking for a better bank account to supplement what you currently have or want to get away from the big banks, I think Discover Bank could be a good option.
Frequently Asked Questions
Q:
What does Discover Bank offer?
A:
Discover Bank offers a variety of products, including online savings accounts, checking accounts with cashback debit, CDs, money market accounts, and more. Checking and Savings accounts have no balance requirement, maintenance fees, or other fees.
Q:
How can you deposit funds with Discover Bank?
A:
Funds can be deposited in Discover Bank accounts via ACH bank transfer, mobile check deposit, or wire transfer. Additionally, Discover supports payments through Zelle.
Q:
Who is Discover online banking best for?
A:
Discover Bank is best for customers who want to earn cashback on their debit card purchases or earn interest on their savings and who don’t require a physical branch location. Additionally, those who prefer to deal directly with a bank instead of an intermediary may appreciate Discover Bank over other digital banking options.
Author
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