I am sure you are no stranger to Discover Credit Cards, one of four major credit card brands that also pioneered the cash bonus rewards program for credit cardholders. But do you know that Discover Financial also has a banking unit?
Discover Bank is the online banking arm of Discover Financial. Its history, however, went back to 1911 as a community bank, Greenwood Trust Company, located in Delaware. The company joint Discover Financial Group in 2002 and has since been known Discover Bank. So even though Discover Bank is quite new, its predecessor has been around for a while. In addition to issuing Discover Credit Cards, Discover Bank also offers customers a range of banking products, including Online Savings Account, Money Market Account, CDs, and IRA CDs. Among them, the most attractive product in my option is its Online Savings Account for several reasons:
- The account has a very competitive rate: At 0.80% APY, Discover Bank’s rate is 5 times the national average;
- The account requires a low $500 initial deposit for new account;
- The account doesn’t charge a monthly fee;
- The account has no minimum monthly balance requirement to earn interest.
To have an idea of how Discover Bank compares with other popular online banks, let’s take a look at their current rates because, when selecting an online bank, I always look the rate first. Without a good rate, an online bank will never attract me since I am not really expect to do a lot of businesses other than moving money between my checking and savings account. The only reason I want to have a high-yield savings account is to earn interests. As for Discover Bank, its wins over other banks because its rate beat most of the well knowns online banks, such as ING Direct (0.80% APY), FNBO Direct (0.65% APY), Sallie Mae Bank (0.80% APY) and Ally Bank (0.89% APY).
The rate itself may not be as high as you would like to have, but, as you can see, it’s a very decent rate comparing to other banks, especially when the overall yields of savings accounts are so low, mostly in the lower 1% range, thanks to the Fed’s policy that has kept its benchmark lending rate close to zero for more than two years.
Above is a chart of Discover Bank Savings Account rate history since December 2008, when the rate was at 2.75%. Things changed a lot since then.
Here are some extra facts about Discover Bank:
- Discover Bank routing number is 031100649
- Discover Bank FDIC Certificate number is 5649
- Discover Bank has 2 domestic branches located in 1 state
So what do you think about Discover Savings Account? A good option for earning more interests?