Money goes in, earns interest, and you can take it out whenever you need it
A Discover savings account is a bank account where you deposit money, and Discover pays you interest on the balance you keep there. You can add money whenever you want, withdraw it whenever you want, and the interest rate Discover offers changes based on what the Federal Reserve does with interest rates. There are no monthly fees, no minimum balance requirement, and no limit on how many times you can move money in or out each month—though federal rules do cap certain types of transfers at six per month.
The account lives entirely online. You open it on Discover's website or app, fund it by linking a bank account or transferring money from another bank, and manage it the same way. You get a debit card if you want one, but most people use Discover savings accounts as a place to keep money separate from their checking account—somewhere the money sits and grows rather than gets spent.
Key Takeaways
- Discover pays interest on your savings balance, and that rate changes when the Federal Reserve raises or lowers rates, usually within days.
- You can deposit money by transferring it from another bank account, and you can withdraw it the same way or by requesting a check.
- There are no monthly maintenance fees, no minimum balance to open the account, and no penalty for closing it.
- Federal rules limit you to six outgoing transfers or withdrawals per month; after that, Discover may charge a fee or close the account.
- Your deposits are insured up to $250,000 by the FDIC, so your money is protected if Discover fails.
How interest accrues and when you see it in your account
Discover calculates interest daily based on your account balance. That means if you have $10,000 in the account on a day when the rate is 4.50% annual percentage yield (APY), Discover divides that rate by 365 and applies it to your $10,000. The next day, if your balance is $10,050, the calculation happens again on the new balance.
Interest posts to your account monthly, usually on the first business day of the month. You'll see the deposit appear in your account history, and from that point forward, that interest becomes part of your balance and earns interest itself—a process called compounding. If you leave the money untouched, the interest compounds every month, and your balance grows faster than it would if interest posted only once a year.
The rate Discover advertises changes frequently. When the Federal Reserve raises its benchmark rate, Discover typically raises its savings rate within a few days. When the Fed cuts rates, Discover cuts its rate as well. You can check Discover's current rate on their website anytime, and you can see the rate your account is earning in your account settings.
Depositing money: transfers, checks, and direct deposit
The most common way to fund a Discover savings account is to link another bank account and transfer money electronically. You provide your routing number and account number from your other bank, Discover verifies the account with two small test deposits, and then you can transfer money whenever you want. Transfers typically arrive within one to two business days.
You can also set up direct deposit from your employer, so your paycheck goes straight into the Discover account. This takes a few days to set up the first time—you'll need to give your employer Discover's routing number and your account number—but once it's active, the money arrives on payday automatically.
If someone sends you a check, you can deposit it using Discover's mobile app. You photograph the front and back of the check, and Discover credits your account within one to two business days. You can also mail a check to Discover's address, though this takes longer.
Withdrawing money: transfers, debit cards, and checks
To move money out of your Discover savings account, you can transfer it back to another bank account you've linked. This takes one to two business days and costs nothing. You can also request a check from Discover, which they mail to you; this takes five to seven business days from the time you request it.
Discover provides a debit card with the account, and you can use it to withdraw cash from ATMs or make purchases at stores. Discover reimburses ATM fees charged by other banks, so you won't pay extra to get your cash out. If you use the debit card to make a purchase, the money comes out of your savings account immediately.
Be aware that federal rules limit you to six outgoing transfers or withdrawals per month—this includes transfers to other banks, checks you request, and debit card purchases. After six, Discover may charge a fee for each additional transaction or may close the account if the limit is repeatedly exceeded. ATM withdrawals do not count toward this limit.
How FDIC insurance protects your money
Discover Bank is a member of the Federal Deposit Insurance Corporation (FDIC), which means your deposits are insured up to $250,000. If Discover fails or goes out of business, the FDIC will reimburse you for the full amount of your account, up to that limit. This protection applies to each account type separately, so if you have both a Discover savings account and a Discover checking account, each is insured for $250,000.
If you have multiple people on the same account—for example, a joint account with a spouse—the $250,000 limit applies to each owner, not to the account as a whole. So a joint account is insured for up to $250,000 per person.
Fees and account closures
Discover charges no monthly maintenance fee, no minimum balance fee, and no fee to open or close the account. If you exceed the six-transfer limit in a month, Discover may charge $10 per excess transaction, though they sometimes waive this fee if it's your first violation. If you repeatedly exceed the limit, Discover may close the account without warning.
There is no penalty for closing the account. You can withdraw your balance and close it anytime, and Discover will not charge you for doing so. If your account sits inactive for a long time, Discover will not close it or charge you—it will simply remain open with whatever balance you left in it.
How to open a Discover savings account
Go to Discover's website or download their mobile app. Click the button to open a new savings account. You'll provide your name, address, Social Security number, and date of birth. Discover will verify your identity and check your banking history using ChexSystems, a database that tracks checking and savings accounts.
Once your identity is verified, you'll choose a username and password, set up security questions, and link a bank account to fund your new Discover account. You can deposit money immediately, or you can wait and deposit later. Your account is active as soon as the verification is complete, usually within a few minutes.
Frequently Asked Questions
What happens if I need my money before the interest posts?
You can withdraw your money anytime without penalty. Interest posts monthly, but you don't have to wait for it. If you withdraw before the end of the month, you'll lose the interest that would have posted that month, but you can take your principal balance out immediately.
Can I have more than one Discover savings account?
Yes. You can open multiple Discover savings accounts if you want to organize your money into separate buckets—for example, one for an emergency fund and one for a vacation fund. Each account earns the same interest rate and has the same features. Each account is separately insured for up to $250,000 by the FDIC.
What if I link a bank account and then close that bank account?
The link will break, and you won't be able to transfer money to or from that account anymore. You can link a different bank account anytime. If you need to withdraw money and your linked account is closed, you can request a check or use your Discover debit card to get cash.
Does Discover report my savings account to credit bureaus?
No. Savings accounts are not reported to credit bureaus because they are not credit products. Opening a Discover savings account will not affect your credit score. Discover does not perform a hard credit inquiry when you open the account.
What if the interest rate drops after I open my account?
Your rate will drop along with it. Discover can change the rate on savings accounts without notice, and the new rate applies to your account immediately. You can close the account and move your money elsewhere if the rate becomes too low, but there is no penalty for doing so.