Since its inception in the 80s, Discover Bank continually dominates the financial sectors, especially when it comes to excellent service delivery.
While some banks come under fire for being dishonest, one is left to think that Discover being an online banking system, is no different than her counterpart.
However, the reverse is the case as this bank has, over the years, proven beyond reasonable doubt that they are nothing compared to other financial institutions.
From their soft loans to CD, checking account, and 24-hour customer service, the bank leaves us with no option but to review her activities.
Today, we slide through the many reasons why the financial institution bears the hallmark of excellence when it comes to online banking.
About Discover
Discover Advantages
- Bonus cash back on debit card purchases. Cash back on credit cards is fairly common, but Discover offers a 1% cash-back bonus on everything you buy with your debit card, up to $3,000 in purchases per month. You could earn as much as $360 per year.
- There are no fees. Discover Bank’s checking account has no fees—no monthly minimums or insufficient funds fees. Furthermore, you will not be charged for returned items or if you close your account.
- A large ATM network exists. The Discover debit card is accepted at 415,000 ATMs across the United States. Account holders can withdraw funds for free from any of the 60,000 ATMs in the Allpoint and MoneyPass networks.
Using an ATM outside of these networks may result in a surcharge imposed by the third-party ATM owner. Discover, on the other hand, never charges a fee for ATM use.
Discover Disadvantages
- There is only one physical location. Discover Online Banking has only one physical location, in Greenwood, Delaware. If you prefer face-to-face interaction, this is not the institution for you.
- Minimum CD deposits are high. While Discover Bank’s certificate of deposit interest rates compares favorably to the competition, you’ll need at least $2,500 to get started.
- This total is a little high: Other online banks will accept as little as $500 or $1,000 to open a CD.
What Services Does Discover Online Banking Provide?
Discover Bank provides a wide range of products and services, as one would expect from a major financial services company’s banking division:
- Savings account Checking account
- Account for money market
- IRA Certificates of Deposit
Discover Checking Account
The Discover Checking Account’s cash-back debit card is a key feature. However, the 1% cash-back reward is only applicable to purchases. ATM withdrawals, money orders, debit card loan payments, and payments made through peer-to-peer platforms are not eligible for cash-back rewards.
There are no monthly maintenance fees, insufficient funds fees, or fees for returned items or stop payment orders, in addition to cash-back on your cards. There is no minimum balance required to open an account, and there is no monthly minimum balance required to keep the account open.
Other advantages include free checks.
Discover’s digital-only banks only allow you to withdraw cash from ATMs; you cannot deposit cash or physical checks. Discover accepts paper checks for deposit via its mobile banking app or by mail to a Salt Lake City processing center.
Discover Savings Account, like Discover Checking Account, has no minimum balance requirement to open or maintain the account. The annual percentage yield (APY) is 3.75% as of April 19, 2023, which is higher than the average national savings rate of 0.35%.
The no-fees features of Discover Bank apply here as well: There are no monthly maintenance or insufficient funds fees with this account.
Discover Money Market Account
While there is no ongoing minimum for maintaining a Discover Money Market account, you will need at least $2,500 to open one.
There are two types of interest rates: If your balance is less than $100,000, you will earn 3.65% APY. If it is more than $100,000, you will receive a 3.70% increase.
Once opened, there are no monthly maintenance fees, no fees for insufficient funds, and no fees if you make more than six withdrawals or transfers per month.
Money market accounts are deposit accounts that pay interest on your money, similar to savings accounts. However, withdrawals are typically easier, usually via a linked debit card; the account may also include check-writing privileges.
Discover Certificate of Deposit (CD)
Discover’s high-yield certificates of deposit (CD) allow you to save money for a specific period of time. CDs typically earn higher interest rates than savings or checking accounts. The longer your term, the more money you can make. The opening deposit is $2,500 at the very least.
Discover provides an Individual Retirement Account CD as well as an IRA Savings Account. The IRA CD has a $2,500 minimum and offers APYs comparable to regular CDs. The IRA Savings account has no minimum balance requirement and currently offers a 3.75% annual percentage yield.
Credit Cards from Discover
Discover’s network includes a few no-annual-fee credit cards, such as a travel card, a student card, and a gas and restaurant card. Technically, these cards are not part of Online Banking, but are instead available through another division of its parent company, Discover Financial Services, which is also known as Discover Bank. You don’t have to be an Online Banking customer to apply for a Discover credit card, and having an Online Banking account doesn’t give you special access to these cards.
Discover also provides other financial services.
The products listed below, like credit cards, are technically not available through Online Banking, but because they are part of Discover Financial Services, the parent company, we list them here as a service.
- Home Equity Loans
- Mortgage refinance
- Loans for individuals
- Loans for students
- Consolidation of debts
Customer Service at Discover Bank
Discover Online Banking provides 365-day-a-year customer service at 1-800-347-2683, with representatives based entirely in the United States, as the company emphasizes. You can also contact customer service via chat. And, like most banks, you can use its mobile app to deposit checks and access your banking information and financial transactions.
According to the J.D. Power 2022 U.S. Credit Card Satisfaction Study, Discover ranks second among credit card issuers with a score of 841.
In addition, according to the J.D. Power 2022 U.S. Banking Mobile App Satisfaction Study, Discover ranked first in online credit card satisfaction.
Discover Financial Services paid out $200 million to 3.5 million customers in 2012 for deceptive practices such as enrolling clients in products such as payment protection plans without their consent. Discover also paid a $7 million civil fine to the Consumer Financial Protection Bureau’s (CFPB) Civil Penalty Fund and the United States Treasury.
How to Use Discover Online Banking
The process of opening an online bank account is simple and straightforward. You can open an account online in minutes whether you’re an existing Discover customer (cardholder, loan borrower) or a new one.
History
In an attempt to expand its portfolio of customer services, Sears purchased the Dean Witter Reynolds brokerage firm organization and Coldwell, Banker & Company (real estate franchise) in 1981. Sears also purchased the Greenwood Trust Company in 1985. These companies worked together as Dean Witter Financial Services Group, Inc., a Sears subsidiary. Sears’ plan to establish a one-stop financial-services center in its stores was not as successful as the company had hoped. Its credit card operations lost $22 million in the fourth quarter of 1986 and $25.8 million in the first quarter of 1987.
On March 1, 1993, Sears spun off its financial services division as a separate publicly traded company called Dean Witter, Discover & Co., led by Dean Witter Reynolds. The ticker symbol for this company was DWD.
To differentiate its network functions from the Discover Card, Discover Card Services, Inc. changed its name to NOVUS Services, Inc. in 1995.
Read Also: Discover Bank Review: 2023 Detailed Guide
This firm merged with investment bank Morgan Stanley in 1997 to form Morgan Stanley Dean Witter, Discover & Co.
Discover and Novus retired the acceptance mark (which can still be seen in some places).
The company changed its name to Discover Financial Services, Inc. on February 1, 1999. The NOVUS logo was retired, and the Discover Network logo took its place.
Morgan Stanley announced in April 2005 that it would spin off Discover Financial Services as an independent company within six months. Industry sources reported in June that Morgan Stanley was reconsidering its plan to spin off Discover. The company confirmed in August that it would not sell Discover. However, during a fourth quarter earnings report on December 19, 2006, Morgan Stanley CEO John J. Mack announced Discover would be spun off as a standalone publicly traded company by the end of August 2007, stating that both companies would be better positioned for growth and success as separate entities. On June 30, 2007, Discover was spun off as an independent, publicly traded company ahead of schedule. On July 2, it debuted as DFS on the New York Stock Exchange.
Acquisitions
The Greenwood Trust Company Acquisition
The Greenwood Trust Company was established on August 30, 1911, in Greenwood, Delaware. On August 1, 2000, it was renamed Discover Bank after being acquired in 1985. Discover Bank is primarily an online financial institution that provides a variety of financial services such as checking, savings, and money market accounts. However, the original Greenwood Trust Company location on 502 East Market Street is still in operation and is Discover Bank’s only physical banking location. Discover Bank is an FDIC-insured subsidiary of Discover Financial Services.
Pulse Acquisition
Discover Financial Services purchased Pulse, an interbank electronic funds transfer payments network, in 2005. Pulse and its more than 4,000 member banks, credit unions, and savings institutions were able to join the Discover Network’s 4 million merchant and cash access locations as a result of this. DFS also gained the ability to market and issue debit and ATM cards. DFS announced on February 13, 2006, that it would begin offering Discover debit cards to other financial institutions, making it the first credit card services company to compete directly with MasterCard and Visa in the rapidly expanding signature debit market.[10]
Diners Club International Acquisition
Discover Financial and Citigroup announced in April 2008 that Discover would purchase the Diners Club International network from Citigroup for $165 million. The transaction was approved by the Federal Trade Commission in May 2008, and it was completed on July 1, 2008. Discover announced the merger of the Diners Club network, a major network outside the United States, with the Discover Network, a major network in the United States. Customers’ global reach was expanded thanks to the establishment of an international network for Discover and Diners Club cardholders. Diners Club cards will continue to be issued by licensees of Diners Club International. Discover Bank has no plans to issue Diners Club-branded cards at this time.
Student Loan Corporation Acquision
Discover Financial Services announced on September 17, 2010, that it would acquire Citigroup-owned Student Loan Corporation for $30 per share. The transaction, which was renamed Discover Student Loans on December 31, expanded DFS’s market presence and origination capabilities in private student loans. DFS introduced Rewards for Good Grades in 2014, rewarding college and graduate students with at least a 3.0 GPA (or equivalent) with a one-time cash reward equal to 1% of the loan amount on each new Discover student loan. DFS introduced an interactive tool called FAFSA assistant in 2015 to assist students and their families in preparing to complete the FAFSA. Based on personal circumstances, the tool provides tailored advice and tips.
Purchase of Home Loan Center
Tree.com, Inc. completed the sale of substantially all of the operating assets of its Home Loan Center, Inc. business to Discover Financial’s wholly owned subsidiary on June 6, 2012. Discover paid an aggregate of $45.9 million for the assets sold, including payments made prior to the closing that were applied to the closing price. Discover began originating mortgages on June 12, 2012, with the launch of Discover Home Loans, which offered prime variable- and fixed-rate conventional and FHA home mortgage loans. In 2015, the Home Loans division was sold.
Is Discover a Trusted Bank?
To answer this question, a profile of the institution is necessary:
As an Internet bank that offers varied financial products and services, from light loans to financial advice, this wonder bank has a lot up its sleeves.
Discover Bank is not only a well-known online financial institution, but it is a trusted option for your banking needs.
Being a member of the Federal Deposit Insurance Corporation (FDIC), depositors have no fear as deposits are insured up to $250,000 per depositor.
This provides an added layer of security for your money in the event of a liquidation.
Additionally, they have been around for over 30 years and has a solid track record of providing reliable and trustworthy banking services.
Regarding customer reviews, Discover Bank has received high ratings on various review websites.
Customers have praised the bank’s competitive interest rates, easy-to-use online and mobile banking platforms, and excellent customer service.
Discover Bank has also won several awards for its financial products and services, bolstering its reputation as a trusted bank.
With its strong reputation, FDIC insurance, and positive customer reviews, you can feel confident choosing Discover Bank for your financial needs.
Is Discover Bank Financially Stable?
One big question many have asked as regards this reputable bank is her financial stability.
Discover Bank is a well-known online bank, but is it financially stable?
Discover Bank is a subsidiary of Discover Financial Services, a publicly-traded company listed on the New York Stock Exchange (NYSE: DFS).
As of December 31, 2021, Discover Financial Services had total assets of $136.3 billion and a net income of $2.8 billion.
These numbers indicate that Discover Financial Services is a financially stable company, which in turn reflects positively on Discover Bank’s stability.
Lest you forget, the Bank is a member of the Federal Deposit Insurance Corporation (FDIC), meaning deposits are insured up to $250,000 per depositor.
This provides an added layer of security for your money if the bank faces financial difficulties.
To cap it up, Discover Bank is a financially stable bank that a strong and durable parent company backs.
Additionally, with their FDIC insurance and solid financial track record, you can trust that your money is safe and secure with Discover Bank.
What is the Rating of Discover Bank?
Discover Bank has received high ratings from various independent rating agencies.
For example, the bank has an A+ rating from the Better Business Bureau (BBB), talking about the highest possible rating.
The BBB rates businesses based on complaint history, transparency, and advertising practices.
The bank has also received high ratings from financial rating agencies like Moody’s and Standard & Poors.
Moody’s has given Discover Bank a rating of A1, which is considered “upper-medium grade” and indicates a low credit risk.
Standard & Poor’s has given Discover Bank a rating of A+, considered “strong,” and indicates a shallow credit risk.
Overall, Discover Bank’s high ratings demonstrate its reputation as a trustworthy and reliable bank.
With solid ratings from independent rating agencies, have no worries about choosing Discover Bank for your financial needs
Does Discover use Zelle?
Until recently, Zelle has been reluctant to accept most Discover credit cards.
With this backdrop, many still wonder if Discover Bank offers Zelle as a payment option.
Yes, Discover Bank does offer Zelle as a payment option for its customers.
Zelle is available through the Discover mobile banking app, which allows users to send and receive money directly to and from their Discover Bank account.
To use Zelle with Discover Bank, customers must enroll in the service through the mobile app.
Once enrolled, they can send money to anyone with a U.S. bank awhichunt also enrolleregisteredle.
Using Zelle with Discover Bank is fast and convenient, with transactions typically taking just a few minutes to complete. Plus, there are no fees to use Zelle with Discover Bank.
Does Discover use Cash App?
Like Zelle, Cash App is a popular peer-to-peer payment service that allows users to send and receive money.
Users can have funds transferred directly to their bank account or a debit card connected to their bank. Nevertheless, does Discover use a cash app?
Discoverdoes not currently offer Cash App as a payment option. However, plans are underway to incorporate the service.
However, if your credit card is DB, you can connect to your Cash app, funds on your Cash app transfer to your account.
What is Discover Bank Withdrawal Limit?
Like most banks, Discover also have withdrawal limits in place. Although with a slight difference in how their restrictions work.
While most banks will want you to have a minimum deposit on your account, Discover Bank allows for a complete withdrawal as per the limit required for the day.
These limits vary depending on the type of account and the withdrawal method.
For Discover Savings accounts, customers can make up to six withdrawals or transfers per statement cycle.
It is essential to state that the savings account allows for interest on your savings if activated. Interest rates stand anywhere between 3.5-7%.
However, the daily withdrawal made for the day will not exceed $510; in other words, there is a limit to daily departures.
This is due to federal regulations under Regulation D, which limits the number of certain types of withdrawals or transfers per month.
Although customers are at liberty to make unlimited deposits and ATM withdrawals.
For Discover Checking accounts; like the savings account, customers can withdraw up to $510 in cash per day at ATMs.
However, customers can request a temporary increase in their daily ATM withdrawal limit by contacting Discover Bank’s customer service department.
While withdrawal limits exist for their various accounts, they are reasonable and in line with industry standards.
Customers can easily manage their accounts and make withdrawals within limits set by the bank
What is the Transfer Limit for Discover?
While some banks are notorious for placing outrageous limits on customers transfer, Discover Bank stands out in this.
For online transfers, a daily transfer limit of $250,000 per day is allowed.
This limit applies to incoming and outgoing transfers to and from other financial institutions.
It’s important to note that the daily transfer limit is a rolling 24-hour period rather than a calendar day.
If you initiate a transfer at 11:59 pm one day, you can create another by midnight the next day.
They also have a monthly transfer limit of $1,000,000 for online transfers.
This limit applies to the total amount of online transfers initiated within a calendar month.
If you plan to initiate a transfer after maxing out $1000000 that month, you will wait until the next calendar month to carry out another transaction.
Overall, withdrawal limits on Discover Bank are no different from the industry standards.
Verdict
Discover Online Banking is a great option for those who prefer a completely digital financial platform. Its generous cash-back bonus on its debit card, lack of fees, and 24-hour service set it apart in many ways. It offers competitive interest rates on its accounts. Discover Online Banking, on the other hand, is limited to the bare necessities of a bank: checking, savings, certificates of deposit, and money market accounts.
Aside from that, there are a few IRA account options. If you’re looking for a financial institution that provides a comprehensive range of products and services (such as credit cards, mortgages, personal loans, and wealth management), you might want to look elsewhere. While some of these options are available through other Discover divisions, it’s unclear whether there is much interaction between them—and whether using one product benefits you in getting another. Similarly, if you prefer to conduct your banking in person, Discover Online Banking is probably not for you. The company’s customer service representatives are friendly and knowledgeable, but it’s not the same as building a relationship with the staff at a physical branch.
Methodology
We are committed to providing consumers with unbiased, comprehensive bank reviews. We collected over 20 data points from over 80 banks, including available products, interest rates, fees, and accessibility, to ensure that our content assists users in making the best decision for their savings and banking needs.
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