Awhile back, I took advantage of a Free Money Friday  offer to open a new E-Trade  account. Some time later, that account was converted  along with most E-Trade deposit accounts to a Discover Bank  account.
If you’re like me, you associate Discover  with credit cards  only – in fact, I previously had no idea that they had a bank arm at all! Now that I’ve had my account for several months, I thought I’d share my thoughts with all of you.
Discover Bank Account Details
- Interest Rate: 1.15% APY.
- Opening Balance: You must open your account with at least $500. Accounts transferred from E-Trade were exempt from this requirement.
- Minimum Balance: Once the account is opened, there is no minimum balance requirement.
- Fees: None for incoming wire or a limited number of electronic transfers/withdrawals (see below). Outgoing wire transfers cost $20-$40.
- Withdrawals: Up to 6 free withdrawals per month, then $15 per additional withdrawal.
Discover Bank Account Features
- Transfers: As with other online banks, you can only “push” transfers rather than “pull” them, meaning the transfers have to be initiated to/from Discover Bank  rather than in any other account. As with most electronic transfers, funds will take 3-4 days to appear in your linked account.
- Resources: Discover Bank  provides resources beyond those of your average online bank. Their “Tips and Advice”  page gives you more information about how their products and good financial habits can work for you. Their online savings calculator  allows you to plan for the future, and their FAQs  are very comprehensive.
- Customer Service: I had to use customer service after I accidentally initiated a transfer to a closed bank account  and the funds bounced back to Discover . For my protection, Discover  prevented me from making future transfers until I could verify my identity and delete the closed account from my linked accounts. My initial email was answered within 4 hours, and when I called the 1-800 number as directed I did not have to wait at all before speaking to a very knowledgeable representative and getting my transfer privileges immediately reinstated.
Other Discover Bank Products
In addition to the online savings account, Discover Bank  offers a Money Market  account, CDs, and even IRA CDs. The money market account pays up to 1.10% (1% for deposits less than $10,000) and allows you to write checks and make ATM withdrawals. The CDs pay 2.35% for a 5-year term and the IRA CDs pay 3.0% for a 10-year term. For more on the various products, see this information page  from Discover Bank.
My Experience with Discover Bank
I’ve been very happy with Discover Bank . Their interface is easy to use and their interest rate surpasses  many of the well-known online savings accounts. In fact, in a quest to simplify my financial life I recently closed my accounts with EmigrantDirect  and INGDirect . While I was happy  with most other aspects of those accounts, the interest rate at Discover was enough to make my Discover account one of two online savings accounts I use regularly (the other  is SmartyPig ).