Earn up to n/a when you open a new Discover Savings Account. Read on to learn how.
I'm sure you've heard of Discover but did you know they're not just a credit card company?
Did you know they are a bank too?
Discover Bank is the banking division of Discover Financial Services, Inc (NYSE:DFS).
If you ask most people about Discover, they often talk about their credit cards. One of my first credit cards, opened in 1998, was a Discover card that paid me 1% cashback for years. Now, if you open a savings account with them, they'll put cash in your pocket too.
Check out this offer from Citi, it's $700 and no direct deposit requirement:
Is Discover FDIC insured?
Yes – we wouldn't list a bank on our site if they weren't
Discover got its start with Sears. Sears created the Discover card in 1985 and after being spun off, merging with Morgan Stanley, spun off again and made independent as Discover Financial Services in 2007. Discover Bank was created when Discover acquired The Greenwood Trust Company in 1985 but it wouldn't get renamed until 2000. This is why the FDIC# of Discover Bank (FDIC# 5649) is only four digits and dates back to January 1st, 1934. It's also why their only location is 502 E. Market Street in Greenwood, DE.
Is a Discover savings account safe? Also yes, since it is FDIC insured, your cash is protected up to $250,000 by the federal government. It's $500,000 of protection if you open a joint account with a spouse. FDIC insurance protects your cash so you don't have to worry if your bank fails, which is rare for banks of this size. It does happen, especially if they are associated with any type of investment bank (Discover isn't), as we saw in the financial crisis.
Now that we have the history lesson out of the way – you might be wondering if Discover has any promotions.
They do… and here they are:
How to Get Your Discover Savings Bonus
The Discover Online Savings Bonus Offer is no longer available through WalletHacks.com. Keep your eyes on this page for future updates.
Other Discover Cashback Options
Discover also has other options to earn cashback from your use in the form of two cards:
Discover Cashback Debit Account — up to $360 a year
Discover's Cashback Debit product is an online checking account with no monthly fees or balance requirements, which is now common for an online checking account. You should never pay a monthly fee or have a minimum balance requirement on an online bank account.
What's uncommon, and downright rare, is their debit card – it's a debit rewards card. The Discover cashback debit card offers 1% cashback on all purchases up to $3,000 per month. That means you can earn up to $360 in cash back each year on the debit card.
There isn't a promotion associated with this account, the cashback offer won't expire, but the debit card cashback offer is itself almost like a bonus. I know a lot of folks who refuse to use credit cards and this is one of the best ways to still earn cashback without getting a credit card.
The cashback debit account has some great perks too:
- No monthly fees or minimum balance requirements
- Uses the Allpoint ATM network (60,000 free ATMs)
- Earn 1% cashback up to $3,000 in purchases/month
- Free online bill pay
- Free check reorders (not common)
- Free incoming wires (very rare)
Discover it Credit Card — No Bonus
The Discover it® Cash Back card doesn't have a new account bonus but it does offer a Cashback Match on the first year – they will match all of the cashback you earn in the first year automatically. The card has no annual fee and has 1% cashback, plus 5% cashback on rotating quarterly categories like gas, restaurants, supermarkets, etc.
You have to activate it each quarter and there's a quarterly maximum of $1,500 in purchases.
What does Discover give cashback on? It offers 1% cashback on everything plus 5% on rotating categories. The quarterly schedule is published ahead of time so for 2020 it's:
- Jan-Mar 2020: Grocery Stores, Walgreens and CVS
- Apr-Jun 2020: Gas Stations, Uber, Lyft and Wholesale Clubs
- Jul-Sep 2020: Restaurants and PayPal
- Oct-Dec 2020: Amazon.com, Walmart.com and Target.com
(it's pretty much the same as 2019, they just added stores to the list of categories)
In terms of cash back cards, it's an average card. If you want a cash back card, I'd give the Chase Freedom card a look because you get the same cash back structure (1% on all purchases and 5% on rotating categories) but you also get a $150 bonus after you spend $500 on purchases in the first 3 months.
How Do Discover Bank Promotions Compare?
We maintain a list of the best bank promotions and there are a few other alternatives that you should consider instead.
CIT Bank offers a $150 or $300 bonus for new or existing accounts when you open an account with the promotion code Spring20 and transfer in a large sum. If you deposit over $25,000 then you get $150. If you can deposit over $50,000, then you get $300. It's one of the best new account promotions without a direct deposit required.
Here is how it stacks up:
$4,000 cumulative within 90 days
The Wells Fargo Cash Wise Visa Card also has a $200 cash bonus after you spend $1,000 in purchases in the first 3 months. That's an unlimited 1.5% cashback credit card too with no annual fee. Worth a look if you don't have a 1.5% cashback credit card in your wallet yet.
Final Verdict: A Strong Savings Account
The Discover Bank Online Savings Account is a good option for an online savings account, even if it doesn't offer a bonus right now:
- A high-interest savings account without any annoying fees
- A checking account with a cashback debit cards
If you were to change your primary bank and centralize where you put your funds, Discover Bank makes a strong case for doing so with what they offer. If you already have a checking account and were considering adding a savings account, it's a no-brainer to take advantage of this account.
Lastly, if the appeal of this account is because of a bonus, make sure you review this guide on bank account bonuses before you jump.