Discover Bank offers a high yield savings account with a competitive interest rate and no monthly fees

Discover Bank's high yield savings account (HYSA) is a standard savings product that earns interest on your balance. The account has no monthly maintenance fee, no minimum balance requirement, and no limit on how many times you can withdraw money each month. The interest rate changes based on what the Federal Reserve does with its benchmark rate, so your earnings will fluctuate over time.

The account comes with a debit card for ATM access and online bill pay. You can move money between your Discover checking and savings accounts instantly through their website or mobile app. Transfers to accounts at other banks take one to three business days through ACH, or you can use wire transfer for faster movement (though wire transfers typically cost money).

Key Takeaways

  • Discover's high yield savings account charges no monthly fee and has no minimum balance to open or maintain.
  • The interest rate is variable and changes when the Federal Reserve adjusts its rates, so your earnings per month will change over time.
  • You can withdraw money as often as you want, and transfers to other banks take one to three business days through standard ACH.
  • The account includes a debit card for ATM withdrawals and online bill pay, but ATM access is limited to Discover's network unless you use a partner ATM.

How the interest rate works and what you earn

Discover publishes its savings rate on its website, and that rate applies to all balances in the account. The rate is not tiered — you do not earn more on your first $10,000 and less on the rest. Interest compounds daily and deposits into your account monthly, so you earn interest on your interest.

The rate moves when the Federal Reserve changes its benchmark rate, typically within a few weeks. Discover does not may provide a rate for any length of time. If rates fall, your earnings fall. If rates rise, your earnings rise. This is standard for all high yield savings accounts at banks and online lenders.

Fees and what they cover

Discover charges no monthly maintenance fee, no overdraft fee, and no fee to transfer money to another Discover account. You will not pay to open the account or to close it.

Outgoing wire transfers cost money (the fee varies but is typically $15 to $25). ATM withdrawals outside the Discover network may charge a fee from the ATM operator, though Discover reimburses some of these fees depending on your account type. Incoming wire transfers are free. If your account goes negative and you do not cover it within a set time, Discover may charge an overdraft fee, though this is rare with savings accounts since they do not typically overdraw.

How Discover's rate compares to other banks

High yield savings rates change constantly and depend on what the Federal Reserve does. At any given moment, some online banks offer slightly higher rates than Discover, and some offer lower rates. The difference is often less than 0.10% per year, which means on a $10,000 balance it amounts to a few dollars annually.

Discover's main advantage is that it is a full bank with checking accounts, loans, and credit cards, so you can keep all your money in one place. Other online banks like Marcus, Ally, and American Express Personal Savings also offer competitive rates and no fees. Traditional banks like Chase and Bank of America typically offer much lower rates on savings accounts.

FDIC insurance and what happens if Discover fails

Discover Bank is FDIC-insured, which means the Federal Deposit Insurance Corporation protects your money up to $250,000 per account type at that bank. A high yield savings account is one account type, so your balance up to $250,000 is protected. If you also have a Discover checking account, that is a separate account type and also protected up to $250,000.

FDIC insurance covers the balance in your account as of the day the bank fails, not the interest you would have earned going forward. The insurance is automatic — you do not need to register or do anything. If Discover were to fail, the FDIC would either move your account to another bank or send you a check within a few business days.

How to move money in and out

You can fund a Discover savings account by transferring money from another bank account using ACH (one to three business days), by wire transfer (same day or next day, with a fee), or by mailing a check. You can withdraw by transferring to another bank (one to three business days), by wire transfer (same day or next day, with a fee), or by using your debit card at an ATM.

Discover's ATM network includes its own machines plus partner ATMs at MoneyPass and Allpoint locations. If you use an ATM outside this network, the operator may charge a fee. You can also withdraw cash by visiting a Discover Bank branch in person, though Discover has fewer physical branches than traditional banks — mainly in major cities.

When a high yield savings account makes sense for you

A high yield savings account works best if you have money you do not need to spend right away but want to access within a few days if an emergency happens. The interest rate is higher than a traditional savings account, so your money grows slightly faster. The tradeoff is that you cannot access the money instantly like you can with a checking account.

If you need the money within the next few months, a high yield savings account is better than keeping it in a checking account that earns little or no interest. If you need the money within the next few days, a checking account is more practical. If you will not need the money for years, a certificate of deposit (CD) or money market account might earn more, though those lock your money away for a set time.

Frequently Asked Questions

Can I withdraw money from my Discover savings account anytime?

Yes, there is no limit on how many times you can withdraw per month. Transfers to other banks take one to three business days. ATM withdrawals are instant if you use a Discover or partner ATM. The only restriction is that you cannot withdraw more than your balance.

What is the current interest rate on Discover's high yield savings account?

Discover publishes its current rate on its website. The rate changes when the Federal Reserve adjusts its benchmark rate, usually within a few weeks. Check Discover's site directly for the most current figure, since rates change frequently and vary by the day.

Is my money safe in a Discover savings account?

Yes, Discover Bank is FDIC-insured, so balances up to $250,000 are protected by the federal government. If Discover fails, the FDIC will move your account to another bank or send you a check. The insurance is automatic and costs you nothing.

Do I need a Discover checking account to open a savings account?

No, you can open a Discover savings account on its own. However, if you have both a checking and savings account at Discover, you can transfer money between them instantly through the app or website, which is convenient for managing your money.

How does Discover's rate compare to other online banks?

Rates change constantly and are similar across most online banks at any given time. The difference between Discover and competitors like Ally or Marcus is usually less than 0.10% per year. Discover's advantage is that it offers checking, savings, loans, and credit cards all in one place.