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The first purchase with a Discover card took place in 1986 for $26.77 at a Sears, Roebuck and Co. store in Atlanta, Georgia. The next year the Discover credit card was launched nationally by a subsidiary of Sears. By 1989 Discover has signed its 1 millionth merchant. Discover goes virtual in 1995 with, offering online customers the ability to apply for cards, pay bills, redeem and earn extra rewards and get email paperless reminders. Over the years, Discover has formed several mergers and acquisitions while pioneering new credit products like the first keychain credit card, gas and miles rewards cards, paperless statements and biodegradable credit cards. In 2011, Discover’s direct-to-consumer deposits grew to $26 billion with cards used internationally for the first time in 2012. Today, Discover is a direct bank and electronic services company offering customers a broad range of no-fee direct banking products, such as online checking, savings, certificates of deposit, and money market accounts with millions of merchant and cash access locations; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories.


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The Good

  • Online banking
  • Savings accounts
  • Low cost student loans

Online Banking

While many banks charge for basic deposit and transaction accounts, Discover offers 100% online banking without fees. Not only that, but they offer rewards and incentives for doing business with them-what they call Rewards Banking.

What Rewards Banking means:

Rewards can add up quickly with everyday banking. When customers open a Discover account, they begin earning 10¢ on up to 100 transactions per month, such as:

  • Every debit card purchase earns 10¢
  • Every bill paid online earns 10¢
  • Every check that clears earns 10¢

These Rewards savings can either be cashed in or added as to the Cashback Bonus® account of the customers' Discover card.

In comparison to many other major banks, Discover offers it accounts without fees.  Chase and Citibank, for example, both charge a $12 monthly maintenance fee for their personal checking accounts.

Discover, however, offers a Rewards Checking Account with the following benefits:

  • Rewards on Debit Purchases, Checks Cleared and Online Bill Payments

(Up to 100 transactions per month)

  • Monthly Fee (No Balance or Activity Requirements)
  • Over 60,000 Free ATMs In the U.S
  • Free online Bill Pay
  • FREE check reorder (other banks charge 18.00 and up)
  • Free replacement of lost Debit Card ($5 at some banks)
  • FREE expedited delivery of replacement debit card (other banks charge $5 and up)
  • Free official bank check
  • Free Paper Copy of Check or Deposit Item
  • Free Outbound ACH Transfer (to an external bank)
  • Free Incoming Wire (from an external bank)

Savings Account

Discover also offers a Savings account with higher benefits than its competitors. For example, Bank of America charges a $5 monthly fee while Discover has no monthly fee.

Other superior benefits of Discover Savings Accounts:

  • Annual Percentage Yield (APY) of 0.95% (other banks are at .01%)
  • No minimum balance requirement (other banks require at least $300)

CD Accounts with higher yields

Discover offers CDs that are structured to be easy to understand and manage. They provide customers with a detailed list of account features:

  • Flexible terms for anywhere from 3-10 years
  • Official Bank Check $ 0
  • $0 for incoming wire transfers
  • $0 for outgoing wire transfers ($30 fee waived for IRA CDs)
  • Early Withdrawal Penalty
  • $0 maintenance fees
  • FDIC insured
  • CD customer service 24/7

The CD yield is higher when compared to other popular banks. If a customer has a 12 month term CD, for instance, then  they'll receive a 1.00% APY versus other banks offering a common .05% APY.


Instead of regular Individual Retirement Account, Discover offers customers planning for retirement an IRA CD account.

An IRA CD account offers:

  • Flexible option for both Roth & Traditional IRAs
  • 1.30% APY  Info for a 24-month term
  • Step-by-step help available 24/7 by phone
  • $0 monthly fees
  • $0 annual fees

Discover makes it easier to keep all retirement funds in the same place (if so desired).

Here's how:

  • Transfer an IRA from another financial institution to Discover Bank
  • Make as many transfers as you want each year
  • Combine smaller IRAs into one larger account
  • Rollover money from another type of account into your Discover IRA CD

Low Cost Student Loans

Not many banks offer student loans directly. Discover does offer private student loans with lower fees than competitors like Sallie Mae and Wells Fargo.

Benefits for student borrowers:

  • Rewards for good grades
  • No loan application fees
  • No origination fees
  • No late fees
  • 24/7 student loan specialists customer service

Rollover money from another type of retirement account into

Another highlight-Fraud Protection

In today's digital age, customers are more susceptible to Identity theft and Fraud than ever before. Discover offers customers a solid list of Fraud Prevention Services and Features-at no additional charge.

Identity Theft and Prevention Features are as follows:

  • $0 Liability Protection

This means customers are not responsible for unauthorized debit card, online, or mobile banking transactions. All that is required is that if a customer has suspicious activity on your account, that they notify Discover immediately and they will take it from there.

  • Bill Pay Protection

Discover Bank Account includes Bill Pay Protection. Pay bills using our Online or Mobile Bill Pay and if payment is late due to Discover's error, they will cover any late fees.

  • Secure Online and Mobile Banking

Customer information is encrypted for security. This includes account information, statements that are password-protected online in the Account Center.

  • Proactive Fraud Monitoring

Customers' accounts are monitored for potential fraud and Discover will alert them upon seeing anything suspicious. If fraud has already occurred, a fraud specialist will work with customers until their issue is resolved.

  • Dedicated Fraud Specialists

Discover's Fraud Unit proactively monitors customers' accounts for any unusual activity. If they see anything suspicious they will place a hold on those transactions and alert the customer right away.

  • Secure Socket Layer Certification (SSL)

Discover uses Secure Socket Layer (SSL) technology to make it virtually impossible for someone else to access customer's information and encrypt all personal and account information

  • FDIC insured

All Discover accounts are FDIC-insured up to the maximum amount allowed by law.

The Bad

  • Fixed return
  • Penalty fees
  • Loans

Fixed Return

If customers are looking for a fixed return on investment regarding savings account interest rates, they should look elsewhere. Savings Account will earn interest at rates established by Discover on a daily basis. At Discover's discretion, they may change the interest rate on customers' accounts at any time.

Also to open a savings account is much higher compared to other banks, with Discover requiring a $500 opening deposit while other banks only require a balance as low as $25.

Penalty Fees

Although Discover's accounts have no maintenance fees, monthly fees and other transaction fees other banks charge, the drawback is that some of its penalty fees are the same or slightly higher. For example, a Deposited Item return incurs a $15 charge while other banks charge $12.


If anyone is looking to sock away money in CDs, hoping to one day be able to borrow from them in time of emergency, Discover's CD IRA is not an ideal choice. Loans may not be taken out ever and there are extremely limited circumstances where customers can make withdrawals before age 59 and 1/2.

The Bottom Line

Since its debut in 1985 as a pioneer in the electronic services payment industry, Discover Bank has proven the advantages of trying new products such as credit with cash back rewards and no annual fees , online bank accounts with no monthly fees, online banking, paperless billing, and even biodegradable credit cards. Its main attractions are its no-fee accounts, cash back checking and convenient online access, including strong multifaceted fraud protection and mobile wallet. Although the accounts have no fees, customers should be aware that penalty fees do apply for things like overdraft fees, which are around the same cost as other banks with more expensive accounts. For students considering a private Discover student loan, they should understand that private loans cannot be discharged for any reason in case of typical post-graduation economic hardship.

User Reviews


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  • 8

    June 7th, 2017 Orem, UT

    My favorite thing about Discover is their rewards system. Discover is really easy to use, and I've never had any issues using the chip device in the card while I run into that issue constantly with other companies.