Discover does offer certificates of deposit, and they're available in terms ranging from three months to five years
Discover Bank sells certificates of deposit (CDs) directly through its website. A CD is a savings account where you agree to leave money untouched for a fixed period—called the term—in exchange for a higher interest rate than a regular savings account. Discover's CD rates change daily based on market conditions, and the rate you lock in is may provide for the entire term, whether rates rise or fall.
You can open a Discover CD online with as little as $25,000 for most terms, though some shorter terms may have lower minimums. The money sits in the CD until the maturity date arrives. When it matures, Discover sends you the principal plus all accrued interest, and you can either withdraw it or roll it into a new CD.
Key Takeaways
- Discover CDs require a minimum deposit of $25,000 for most terms, with rates locked in for three months to five years.
- Interest rates on Discover CDs are may provide and do not change once you open the account, even if market rates move.
- You can open a CD entirely online through Discover's website without visiting a branch.
- If you withdraw money before the maturity date, Discover charges an early withdrawal penalty that reduces your earnings.
- When your CD matures, you have a grace period—usually around ten days—to decide whether to withdraw or renew.
Discover's CD terms and current rates
Discover offers CDs in five standard terms: three months, six months, one year, three years, and five years. The longer the term, the higher the interest rate Discover typically pays. Rates change daily, so the rate you see today may not be the rate you receive tomorrow. You can check current rates on Discover's website without opening an account.
The actual rate Discover pays varies based on market conditions and Federal Reserve policy. Because rates fluctuate, comparing Discover's rates to other banks' rates on the same day matters more than looking at historical numbers. Discover publishes its rates publicly, so you can compare them side by side with competitors like Marcus, Ally, or traditional banks.
How to open a Discover CD online
The entire process happens on Discover's website. You create an account, verify your identity, choose your CD term, enter the deposit amount, and fund the account from a linked bank account. Discover typically requires you to link an external checking or savings account to fund the CD—you cannot transfer money from another Discover account into a new CD.
Funding takes one to three business days, depending on your bank. Once the money arrives and clears, your CD term begins and your interest rate is locked in. Discover sends you a confirmation email with the maturity date and the exact amount of interest you will earn.
Early withdrawal penalties and what they cost
If you need the money before the maturity date, Discover charges an early withdrawal penalty. The penalty amount depends on the CD term: shorter terms have smaller penalties, and longer terms have larger ones. For example, a three-month CD might have a penalty of one month's interest, while a five-year CD might have a penalty of 18 months' interest. Discover deducts the penalty from your interest earnings first, and if the penalty exceeds your earnings, it comes from your principal.
Before you open a CD, Discover discloses the exact penalty in writing. Read it carefully, because once you deposit the money, the penalty is locked in. If you think you might need the money within the term, a CD is not the right choice—a regular savings account gives you access without penalty.
What happens when your CD matures
On the maturity date, your CD stops earning interest. Discover gives you a grace period—usually around ten calendar days—to decide what to do next. During this window, you can withdraw the full amount (principal plus interest), or you can let Discover automatically renew the CD into a new term at the current rate.
If you do nothing during the grace period, Discover automatically renews your CD into the same term length at whatever rate Discover is offering that day. This means your new rate may be higher or lower than your original rate. To avoid an automatic renewal you do not want, log into your account before the grace period ends and choose to withdraw instead.
FDIC protection and account safety
Discover Bank is FDIC-insured, which means the Federal Deposit Insurance Corporation protects your deposits up to $250,000 per account holder, per bank, per ownership category. A CD counts as a deposit account, so your principal and accrued interest are both covered by FDIC insurance up to that limit.
If you have multiple CDs at Discover, they are added together for FDIC purposes. If your total deposits across all Discover accounts exceed $250,000, the amount over $250,000 is not insured. You can open CDs at other banks to spread your deposits across multiple FDIC-insured institutions if you want to protect more than $250,000.
Comparing Discover CDs to other options
Discover's CD rates are competitive but not always the highest available. Online banks like Marcus, Ally, and American Express Bank often publish rates alongside Discover's, and rates shift daily. The difference between a 4.50% rate and a 4.75% rate matters more on a large deposit and a long term—on a $25,000 five-year CD, that 0.25% difference equals about $312 in additional interest.
Some banks offer no-penalty CDs, which let you withdraw early without a penalty. Discover does not offer this product. If flexibility matters to you, a high-yield savings account from Discover or another bank gives you access to your money anytime without penalty, though the interest rate is usually lower than a CD's rate.
Frequently Asked Questions
Can I add money to a Discover CD after I open it?
No. Once you open a CD, the deposit amount is fixed. You cannot add more money to that CD. If you want to deposit additional funds, you must open a separate CD.
What if I need the money before the maturity date?
You can withdraw early, but Discover charges an early withdrawal penalty. The penalty is deducted from your interest earnings first. If the penalty exceeds your earnings, it reduces your principal. Check the penalty amount before you open the CD.
Do I have to renew my CD when it matures?
No. When the grace period ends, you can withdraw the full amount. If you do nothing, Discover automatically renews it at the current rate. Log into your account during the grace period to withdraw instead of renewing.
Is my money safe in a Discover CD?
Yes. Discover Bank is FDIC-insured, so your principal and interest are protected up to $250,000. If you have multiple CDs at Discover, they count toward that $250,000 limit combined.
How do Discover CD rates compare to other banks?
Discover's rates are competitive but change daily. Compare rates across multiple banks on the same day to see which offers the best rate for your term. Online banks like Marcus, Ally, and American Express Bank often publish rates you can compare side by side.