This Discover Savings review will walk you through how it works, the best ways to use it, and how to decide if it can work for your financial goals.
You probably already know Discover has a large lineup of credit cards, but did you know they have a great savings account option too?
With the Discover Online Savings Account, you can take your savings to a new level. As a high-yield savings account, the money you deposit earns a very competitive interest rate while enjoying the protection of FDIC insurance. It’s a win-win!
Discover cut the fees all the way down to zero, too. That’s right: You get all the advantages of big interest without the hassle of maintaining a minimum deposit or paying maintenance fees.
Personally, I use high-yield savings accounts for all of my short-term savings goals. Whether I’m building my emergency fund or saving for my next vacation, I take advantage of the great rates a high-yield savings account offers. It’s basically like earning free money!
After all, I don’t want my funds sitting there doing nothing. Thankfully, Discover Online Savings puts your money to work by paying a 0.60% APY. That’s a much better return than you’d get from a traditional savings account, but is Discover Savings right for you? Let’s find out!
At a Glance: Discover Savings
- 0.60% APY on all balances*
- $0 minimum opening deposit
- No monthly service fees
- Can deposit money by check
- No minimum balance required
- Easy-to-use mobile app for 24/7 access
*Rate current as of April 15, 2020
What Is the Discover Savings Account?
Discover Online Savings is a high-yield savings account you can use for setting money aside to reach your financial goals, no matter how big or small they might be.
Online banking is more competitive than ever, and Discover has stepped up its game by offering some winning perks. You get a big APY without the high fees that other online and traditional banks charge. Plus, there are no minimum balance requirements to open or maintain your account. This gives you the flexibility you need to manage your money in a way that’s best for your financial goals.
FDIC insurance covers your cash, and you start earning interest right away. Once you fund your account, your money grows risk-free.
The Discover Savings account is your ticket to online banking with no fees. It will never charge you for monthly maintenance, returned items, excessive withdrawals, or insufficient funds.
To fund your account, you can choose from several convenient options – including mobile deposit, online transfer, direct deposit, or mailing in a check. Getting access to cash is simple, too, since it lets you do an outgoing wire transfer, get an official bank check, transfer to external banks, and move money to and from your other Discover accounts.
The added features make it easy to see why Discover Savings is a top choice if you’re looking for a high-yield savings account.
What I Love About Discover Online Savings
When looking at online banking options, the two most important things I check are the interest rate and the fees I might have to pay. I’m happy to report that the Discover Savings account checks all the boxes and has additional benefits to cash in on.
The high 0.60% APY is one of the best available for high-yield savings accounts. A traditional savings account pays rates as low as 0.01% APY, which yields just $1 per year on a balance of $10,000. But with Discover Savings, your $10,000 would earn $170 in a year. That’s basically $170 of free money in your pocket.
There are no hoops to jump through to earn this big return, either. While some banks have a tiered rate structure, Discover Savings pays the same interest rate no matter your balance. That means whether you have $5 or $15,000 in your account, you’ll cash in on the competitive APY.
Not having to pay any fees is a huge draw, too. There’s no minimum monthly balance requirement to waive the fees, making this account a huge help for savers who don’t have large bank balances.
The mobile app also earns high marks as one of the best offered by banks. Managing your money on-the-go is crucial for anyone, whether you have a busy lifestyle or prefer the convenience of managing your money from the comfort of your home.
You’ll enjoy mobile check deposits and easy money transfers from one account to another. With the app, you can access your money from your phone or tablet anytime and anywhere you want.
Where the Account Falls Short
Discover Online Savings has a ton of features that make it a worthwhile option for high-yield savings. Between earning interest and the lack of fees, your balance gets a boost because more money stays in your pocket.
Despite the all-around convenience of 24/7 access, no bank is perfect. There is one area where the Discover Savings account could improve: in-person banking.
Discover doesn’t have any physical locations for you to handle your banking face-to-face.
This isn’t unexpected. A lot of banks that offer online savings accounts don’t have in-person banking, and that’s where Discover’s mobile app picks up the slack. The app is incredibly easy to use and is rated 4.8 out of 5 stars in the Apple App Store.
Still, if you prefer to manage your money in person, this might not be the best account for you.
How to Use Discover Online Savings
High-yield savings accounts like Discover Online Savings have become a staple in the world of personal finance. There are a lot of ways to benefit from saving in these accounts, and some of the best include using them for short-term savings goals like:
- Emergency Fund: A high-yield savings account is the gold standard for your emergency fund. With your emergency cash in a separate account, you’re less likely to be tempted to spend it if you’re running short on money during the month. You still have quick access to the funds if your furnace quits working or you need to pay an insurance deductible.
- Vacation Fund: Saving for a vacation is my favorite way to use high-yield savings accounts like Discover Savings. While setting aside cash for emergencies gives me peace of mind, building a vacation fund is fun and exciting. By saving in advance for a vacation instead of paying for it on credit, you can relax and unwind without worrying about the cost.
- Holiday Savings: Despite what some people think, the holidays aren’t an emergency. They happen at the same time every year, so why not prepare for them? If you don’t already have a holiday savings account, now is the time to start. Every little bit you put in now will help you reduce financial stress during the holiday season.
- Unforeseen Spending: Unexpected expenses will come up no matter how good you are at budgeting. If you have kids, you can expect to see miscellaneous purchases related to school pictures, fundraisers, and field trips. Having a little cash stashed away can help you make ends meet when money is tight.
- Investing: Although you don’t want to overstuff your savings account and lose out on the potential for higher returns through investing, some investment platforms require hefty opening deposits. Minimum initial investments of $500 to $3,000 are common. If you want to invest, but don’t quite have enough cash to get started, a savings account can be your stepping stone. Setting aside money every week and adding to it whenever you have extra cash can help you reach your investing goals.
- Big Savings Goals: Likewise, a savings account is a fantastic way to save for a house, wedding, or other big financial goal. Set up a direct deposit or recurring transfer to put your savings on autopilot and watch your balance build. Plus, using a high-yield savings account grows your money even faster.
Discover Savings: The Verdict
You might think the Discover Savings is just another high-yield savings account. After all, it has all the features you expect, such as a big APY and easy online banking access.
But it’s really gone above and beyond by offering a tier-free interest rate. With Discover Savings, earning interest is hassle-free because you get the best interest rate on balances large and small.
Of course, not having to worry about paying fees is a big perk, too. The flexibility of being able to deposit money by check, mobile deposit, direct deposit, and by transfer makes saving money easy. You also get the benefit of banking with a respected and reliable company who offers great customer service.
In my mind, Discover Savings is an excellent option for helping you reach your financial goals. If you aren’t earning big-time interest on your money, what are you waiting for?
Do you have an online savings account? What financial goal are you working toward? Share with us in the comments!
Discover Online Savings Account Review
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