|Discover the main features of online savings
|Minimum balance to earn the highest APY
|6 per reading cycle
|Monthly Service Fee
The Discover Online Savings account is easy to open, with no minimum deposit or balance requirements. You will also earn the same APY regardless of your balance. Interest is compounded daily and paid monthly. Although the bank's APY is high compared to the national average (0.47%, as of January 16, 2024), it is low compared to the best high-yield savings accounts on the market.
However, Discover doesn't charge any account fees, so you don't have to worry about additional costs.
Like many other savings accounts, this one has a limit of six withdrawals per statement cycle, and while Discover won't charge you a fee for excessive withdrawals beyond that threshold, it may refuse to finalize the transaction. If you regularly exceed the withdrawal limit, the bank may close your account.
About Discover: Other Savings Options
Discover offers savings accounts nationwide, but the online bank doesn't have a physical location. It also offers a rewards checking account, money market account, and certificates of deposit, among other banking services.
The bank has a reputation for good customer service and received top marks in JD Power's 2022 U.S. Direct Banking Satisfaction Study.
Savings account interest rates can fluctuate regularly, so even if a bank may offer the best APY right now, there's no guarantee it will stay that way as banks compete for customers. While a high APY is important, consider all account features to determine which one is best for you.
Compare savings account rates
In the news
Savings account rates reached higher levels in 2023 than we have seen in more than 20 years, driven higher by the Federal Reserve's rate-hike campaign that began in March 2022 to control high inflation for decades. However, over its past three meetings, the Fed has held the federal funds rate steady, and in his Dec. 13 announcement, Fed Chairman Jerome Powell indicated that the committee's rate-hike cycle was most likely finished. Additionally, most Fed members expect interest rates to be two to four cuts will occur by the end of 2024. Since savings account returns closely track the federal funds rate, the Fed's current holding pattern has caused savings rates to plateau, and it is necessary expect cuts once it appears the Fed is ready to make its first cut.
Pros and Cons of the Discover Savings Account
APY is generally high compared to the national average
No minimum deposit requirement
No Tiered APY
The APY is low compared to the best high-yield savings accounts
No physical branch
Monthly withdrawal limit
- The APY is generally high compared to the national average: If you have a savings account with a traditional bank, you may end up earning next to nothing on your balance. Discover savings account interest rates are typically much higher than the average national savings interest rate.
- No minimum deposit requirement: You don't need to make a minimum deposit to open an account or maintain a minimum balance to earn interest, making it relatively accessible compared to accounts with minimum requirements of several hundred or thousands of dollars.
- No Tiered APY: Some savings accounts reserve their highest interest rates for higher balances. With Discover, you'll earn the same rate regardless of your balance.
- The APY is low compared to the best high-yield savings accounts: Although Discover Bank savings account interest rates are high compared to the national average, you can earn a higher return with the best high-yield savings accounts.
- No physical branch: Discover doesn't have a physical location, and there's no ATM access if you don't also have a Discover checking account. If you want more flexibility in how you can access your money, consider other options.
- Monthly withdrawal limit: The Federal Reserve no longer requires banks to limit savings account withdrawals to six per month, but Discover maintains that limit.
Alternatives to Finding Out Savings Account Interest Rates
Unless you already use Discover, it may be worth looking at other alternatives to ensure you get the right account for your financial situation.
Higher Yield Savings Accounts
If you want to maximize the interest you earn on your savings, you'll benefit from higher interest rates with other high-yield savings accounts. These accounts are typically offered by other online banks, but you can also find them at some traditional banks and credit unions.
Money market accounts
If you want better access to your funds but don't want to open both a checking and savings account, you may want to consider a money market account. These accounts can offer high returns, but they may also give you a debit card and check-writing privileges. That said, they may have higher deposit requirements and charge monthly fees.
Like savings accounts, money market accounts may also come with a limit of six withdrawals per month, which may impact your ability to use your account as you wish.
Certificates of deposit
Interest rates on savings and money market accounts fluctuate regularly. If you want to get a high interest rate on your savings, consider a certificate of deposit (CD). These accounts typically offer higher returns in exchange for locking in your funds for a certain period of time, which can range from a few months to several years. However, if you withdraw your money before the account matures, you risk early withdrawal penalties. Check out our selection of the best CD rates to see how much you could earn.
I Bonds are issued by the U.S. government and are designed to provide protection against inflation. In many cases, interest rates on high-yield savings do not provide protection against inflation. These bonds have maturities of up to 30 years, but you can cash them in early.
You cannot redeem I bonds in the first year, and if you cash them in during the first five years, you will lose the interest value from the previous three months.
Treasury bills, or T-Bills, are issued by the U.S. government and have a maturity of one year or less. Because they are fully backed by the federal government, they are considered essentially risk-free.
Is Discover good for saving?
Discover offers a high yield on its savings account, but if you're looking to maximize your return on your short-term savings needs (like for an emergency fund or home down payment), you can find better APYs elsewhere . Take a look at the best high-yield savings accounts for the highest rates on the market today.
What is the minimum balance for a Discover savings account?
Discover has no minimum balance requirement to open a savings account or to earn interest. With some other banks, you may need to make a minimum deposit to get started or maintain a certain balance to get the account's highest interest rate, making Discover relatively accessible.
How do I withdraw money from a Discover savings account?
You can withdraw money from your Discover Online Savings account by wire transfer (either to a Discover checking account or to an external account), wire transfer, or bank check. The account does not come with an ATM or bank card, so there is no way to withdraw money.
Remember that there is a limit of six withdrawals per statement cycle. If you do more than that, the bank may refuse your request.
Are Discover savings accounts FDIC insured?
Yes, Discover offers FDIC insurance up to the maximum limit of $250,000 per account category per owner. In other words, you are insured up to $250,000 alone or $500,000 with a joint account holder.
Does Discover Savings pay interest monthly?
Yes, Discover compounds the interest you earn daily and pays it monthly.
Is Discover Savings Account Safe?
Yes, the Discover Savings Account is a safe place to put your money. Your deposits are insured by the FDIC up to the maximum coverage limit of $250,000.
How does the Discover Savings Account work?
The Discover Savings Account is an online savings account. You can make deposits via wire transfer, mobile check deposits, mailed checks, and direct deposit, and you can withdraw money via wire transfer, wire transfer, or official bank check.
However, you can't access your money at a bank branch, nor is there access to ATMs unless you have a Discover checking account – and you'll need to transfer money from savings to the check before your ATM withdrawal.
How much should I keep in my Discover savings account?
Discover has no minimum balance requirement. To determine how much to save, think about your goals and what you want to achieve with your savings in the short term, and look at how much you can expect to earn at different deposit rates and amounts.