Opening a Discover High Yield Savings Account
You can open a Discover high yield savings account entirely online in about 10 minutes. You'll need a valid government ID, your Social Security number, and a way to fund the account—either a bank transfer or a debit card. Discover will verify your identity and run a soft credit check (which does not affect your credit score), then you can start depositing money the same day.
The account opens with a $0 minimum deposit, so you don't need to fund it immediately. Once your account is active, you can transfer money in from another bank, deposit a check by mobile app, or set up automatic transfers from your paycheck or existing accounts.
Key Takeaways
- You need a valid government ID, Social Security number, and an existing bank account or debit card to fund your new Discover account.
- The entire signup process happens online and takes about 10 minutes; your account is active the same day.
- Discover's high yield savings rate changes with market conditions, so check the current rate before you deposit.
- Your deposits are insured up to $250,000 by the FDIC, which means your money is protected even if Discover fails.
- You can withdraw money anytime without penalty, but federal rules limit you to six withdrawals per month from a savings account.
What You Need Before You Start
Gather these items before you begin the online signup: a valid government-issued photo ID (driver's license, passport, or state ID), your Social Security number, and your current address. Discover will ask you to verify all of this during signup.
You'll also need a way to fund the account. This can be a bank account at another institution (you'll provide the routing and account number for a transfer) or a debit card. If you're transferring from another bank, that transfer typically takes one to three business days to complete. If you use a debit card, the deposit posts immediately, but Discover may place a temporary hold on large first deposits while they verify the card.
Have your employer's routing and account number handy if you want to set up direct deposit of your paycheck. This is optional but useful if you want money to flow into the account automatically.
The Step-by-Step Signup Process
Go to Discover's website and click the button to open a savings account. You'll be asked to enter your email address and create a password. Discover will send you a verification code to that email; enter it to confirm.
Next, enter your personal information: full name, date of birth, Social Security number, and current address. Discover will ask you to upload or photograph your government ID. The system reads the ID automatically, but you can correct any information it misses. This step usually takes two to three minutes.
Discover will then ask how you want to fund the account. Choose either a bank transfer (provide your other bank's routing number and your account number) or a debit card (enter the card number, expiration date, and CVV). If you choose a bank transfer, Discover may send two small test deposits to your other bank account within one to two business days; you'll need to verify the amounts in your Discover account to confirm you own that bank account.
Review the account terms, agree to them, and submit. Your account is now open. You can log in immediately and see your account number and routing number, which you'll need if you want to set up direct deposit or link the account to another bank.
Funding Your Account and Setting Up Transfers
If you chose a bank transfer during signup, that money will arrive in one to three business days. If you chose a debit card, the deposit posts right away. Once your account is funded, you can add money in several ways: transfer from another bank account, deposit a check using the Discover mobile app, or set up automatic transfers from your paycheck.
To link another bank account for future transfers, log into your Discover account, go to the Transfers section, and select "Link an account." Discover will ask for that bank's routing number and your account number there. You may need to verify two small test deposits again. After that, you can transfer money between accounts whenever you want, though transfers from other banks take one to three business days.
To set up direct deposit, get your Discover account number and routing number from your account dashboard. Give these to your employer's payroll department along with instructions to deposit to a savings account. Direct deposits usually post within one or two business days of your normal payday.
Understanding the Interest Rate and How It Works
Discover's high yield savings rate is set by Discover and changes based on Federal Reserve decisions and market conditions. The rate you see when you open your account is the rate you'll earn, but it can go up or down in the future. Discover will notify you of any rate change before it takes effect.
Interest is calculated daily on your account balance and deposited monthly. This means if you have $10,000 in the account for the entire month, you'll earn that month's interest on the full $10,000. If you withdraw $5,000 halfway through the month, the interest for that month is calculated on the average balance.
Interest earnings are reported to the IRS on a Form 1099-INT at the end of the year if you earn $10 or more in interest. You'll owe federal income tax on this interest, and possibly state income tax depending on where you live.
FDIC Protection and Account Safety
Your deposits in a Discover high yield savings account are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account owner. This means if Discover fails or goes out of business, the FDIC will reimburse you for your balance up to that limit. If you have more than $250,000, only the first $250,000 is protected.
If you have multiple accounts at Discover (for example, a savings account and a money market account), the FDIC protection is separate for each account type. A savings account and a money market account are each insured up to $250,000. However, multiple savings accounts at the same bank are added together and share one $250,000 limit.
Discover uses encryption and multi-factor authentication to protect your login. You can set up two-factor authentication in your account settings, which requires you to enter a code sent to your phone or email every time you log in from a new device.
Withdrawal Rules and Limits
You can withdraw money from your Discover high yield savings account anytime without penalty. However, federal banking rules limit you to six withdrawals per month from a savings account. This includes transfers to other accounts, checks written from the account (if available), and debit card withdrawals. Withdrawals at an ATM or in person at a Discover branch do not count toward this limit.
If you exceed six withdrawals in a month, Discover may charge a fee or convert your account to a checking account. Check Discover's current fee schedule on their website, as fees vary.
Transfers to another bank account typically take one to three business days. If you need money faster, you can transfer to a linked debit card account, which may post the same day or within one business day depending on the receiving bank.
Frequently Asked Questions
Can I open a Discover savings account if I don't have a bank account yet?
No, you need an existing bank account or debit card to fund your Discover account during signup. If you don't have either, you'll need to open a checking account at another bank first, then use that to fund your Discover savings account.
How long does it take to transfer money from Discover to another bank?
Transfers from Discover to another bank take one to three business days. Transfers from another bank into Discover also take one to three business days. Transfers between Discover accounts (if you have multiple) post the same day.
What happens if I close my Discover savings account?
You can close your account anytime by logging in and requesting closure, or by calling Discover. Any balance in the account will be transferred to the bank account you specify. There is no fee to close the account.
Do I need a minimum balance to keep the account open?
No, Discover does not require a minimum balance. Your account stays open even if the balance is $0, though you won't earn interest on $0.
Can I use a debit card to withdraw money from my Discover savings account?
Discover does not issue a debit card for savings accounts. You can withdraw money by transferring it to another bank account, writing a check (if your account allows it), or visiting a Discover branch in person. For everyday spending, most people transfer money to a checking account at another bank.