Discover Bank CD Rates Review

Discover
Most people know Discover as a credit card company, but it also operates an online bank and offers some of the best rates and terms on checking and savings accounts and certificates of deposit (CDs).

If you’re looking for CDs in particular, Discover is currently considered one of the best CDs due to their customer service and digital tools.

Discover Bank CD rates

CD term

Annual Percentage Yield (APY)

Minimum deposit amount

3 months

0.35%

$2,500

6 months

0.65%

$2,500

9 months

0.70%

$2,500

12 months

1.50%

$2,500

18 months

1.55%

$2,500

24 months

1.65%

$2,500

30 months

1.70%

$2,500

3 years

1.76%

$2,500

4 years

1.85%

$2,500

5 years

2.25%

$2,500

7 years

2.30%

$2,500

10 years

2.35%

$2,500

Rates as of Nov. 3, 2017

How do Discover Bank CD rates compare?

While Discover Bank CD rates aren’t always the highest available, they are consistently among the top offers across all terms. However, you may be able to find a similar or even better rate with a CD that has a lower minimum deposit than Discover’s. Currently, several nationwide banks offered a 12-month CD at a rate higher than Discover’s 12-month CD APY, while requiring a lower minimum deposit. For example, at the same time the above rates were available at Discover, there were 12-month CDs with rates as high as 1.65% APY with a minimum deposit of $500.

It’s always great to go for the highest interest rates possible, but keep your CD investing strategy in mind. If you’re investing in CDs using the ladder strategy, it might be easier to keep everything in one bank since you’ll be switching in and out of CDs frequently.

Discover also stands out from its competition in the CD space with its mobile app and 24/7 U.S.-based customer service. If you value such features, keep those particulars in mind when weighing Discover CD rates against others’.

What you need to know about Discover Bank’s CDs

Discover Bank is very transparent in terms of fine print. It’s not difficult to understand what’ll happen with your money after you invest it. We’ll cover the basics here about what you need to know to invest in Discover Bank’s CDs.

How to open a CD

It’s very simple to open up a CD with Discover Bank. Go to their CD webpage and click on the orange “Open an Account” button near the top right of the page. You can then choose which accounts you’d like to open. Select “CD,” choose a CD term and enter how much you’d like to deposit.

You’ll then need to complete the application by providing your name, address, date of birth, phone number, Social Security number, employment status and possibly even your driver’s license. Once your application is complete and accepted, you’ll need to fund the account.

How to fund the CD

You’ll need to fund it within 45 days of submitting your application, which you can do in one of three ways:

  • Transfer funds from another bank account over the phone. (You can only do this when you first fund your account.)
  • Transfer funds from another bank via online transfer.
  • Write a check to yourself and send it to the following address:Discover Bank
    P.O. Box 30417
    Salt Lake City, UT 84130

The minimum deposit amount for each of Discover Bank’s CDs is, as the chart above indicates, $2,500. Once you open a CD, you can’t deposit more money later, so it’s a good idea to make sure you have all the cash you want to invest before you open the account.

Withdrawing funds from the CD

When you want to withdraw money from your CD, the biggest thing to consider is whether that CD has matured yet, or finished its term.

If your CD has not matured, you’ve got options: You can take the interest out penalty-free at any time, or you can withdraw the principal (or the money you deposited) at any time as long as you pay an early-withdrawal penalty. This penalty varies depending on the original term of your CD:

  • less than one year: three months’ worth of simple interest
  • one year to less than four years: six months’ worth of simple interest
  • four years: nine months’ worth of simple interest
  • five years to less than seven years: 18 months’ worth of simple interest
  • seven years or longer: 24 months’ worth of simple interest

If your CD has finished its term, you can withdraw your money penalty-free, allow the CD to renew or roll it into a CD of a different term length. (More on that in a bit).

Earning interest on a Discover CD

Your CD will start earning interest on the same business day that you fund the account. The interest will be added to your account once each month, however.

When it comes to what to do with your interest, you have two options: The default option is to allow it to compound within the CD (meaning you’ll earn interest on that interest), or you can have it automatically deposited each month into another Discover bank account.

What happens once the CD matures?

You’ll get a heads-up notice about a month before your CD matures so you can decide what to do with the money. You have two main options: Either reinvest it into another CD (of the same term length or a different term length), or withdraw the money from the CD and put it into another account (such as a checking or savings account, or perhaps a CD at a different institution).

If you don’t let Discover know what you want to do with the maturing CD, the CD will automatically renew into another one of the same term length. You have a nine-day grace period after your CD automatically rolls over to make any changes or withdrawals penalty-free.

The bottom line

As far as big-name banks go, Discover offers great CD products. Wells Fargo, for example, only offers interest rates as high as 1.55% APY on a $5,000 deposit for a 58-month CD. Chase Bank offers even lower maximum rates — an abysmal 1.05% APY, and only if you can commit a minimum of $100,000 for 10 years.

If you’re the kind of person who likes to keep your finances in one place, Discover also has great credit cards, as well as competitive online savings and checking accounts. No matter how long you’re considering putting money in a CD, Discover is worth a look. Even if it doesn’t have the best available rate, it’s usually within several basis points of the top offerings and well above the average APY.

The post Discover Bank CD Rates Review appeared first on MagnifyMoney.

Discover’s New Social Security Alert Feature: What Does It Do?

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[Disclosure:  Cards from our partners are reviewed below.]

Earlier this summer, Discover rolled out a free service to help protect its cardholders from identity theft. This service alerts cardholders when their Social Security numbers have been compromised and left vulnerable to criminals.

This feature is a natural fit for a credit card industry that increasingly prioritizes security. But if you’re a Discover customer (or you’re interested in becoming one), you may be curious why that security is so important and what the new feature actually does.

The Dark Web Threat

According to Javelin Strategy & Research, over 15 million Americans were victims of identity fraud in 2016, with losses amounting to $16 billion. Consumers are particularly vulnerable to identity theft after a data breach leaves their personal information—like Social Security numbers and credit card information—exposed.

After a data breach, stolen information may be listed for sale on illegal websites on the dark web, an area of the internet that can’t be indexed or located by search engines like Google. Some dark web marketplaces exist solely to traffic in illegal goods and information, including stolen consumer data. If personal information is compromised in a breach, a stolen Social Security number is up for grabs.

Thieves can then use acquired Social Security numbers and other private information to create accounts and take out loans, which can wreak havoc on a victim’s credit.

Discover’s Social Security Alerts

Discover Social Security alerts can help fight against identity theft by monitoring the dark web for your Social Security number.

“Once a cardmember signs up for our new free alerts, Discover will monitor thousands of risky websites that are known to illegally sell or trade information and will notify cardmembers if their Social Security number is found,” says Laks Vasudevan, Discover’s VP of global products and solutions. “In [addition], we’ll monitor cardmembers’ Experian credit reports and notify them if any new credit accounts—such as credit cards, mortgages, or car loans—are opened in their name.”

If Discover finds a customer’s information on one of these sites, the customer will be notified via email or text alert.

Beyond the Alert

Being aware of a security risk is an important first step in the battle against identity theft. But addressing identify theft will require further action.

If a cardmember receives a Social Security alert, Vasudevan said they should call Discover so agents can help them identify the right course of action. Agents may advise cardmembers to put a freeze on their credit report or put them in contact with an Experian fraud expert.

Prioritizing Security

“Helping Discover cardmembers protect their personal information is one of our highest priorities,” says Vasudevan. “We know that identity theft and fraud is a concern for people everywhere, including our cardmembers, which is why we expanded our monitoring features beyond our cardmembers’ Discover accounts.”

Whether you’re a Discover cardholder or not, you should always take precautions to safeguard your personal information and fight identity theft. You can start by checking your credit report for free at Credit.com.

Image: wutwhanfoto

At publishing time, some Discover cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved, or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees, and terms for credit cards, loans, and other financial products frequently change. As a result, rates, fees, and terms for credit cards, loans, and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees, and terms with credit card issuers, banks, or other financial institutions directly.

The post Discover’s New Social Security Alert Feature: What Does It Do? appeared first on Credit.com.

Checking Your Credit Regularly Helps You Improve Your Scores, Survey Says

check-your-credit-score

For some people, checking their credit is like stepping on the bathroom scale: a necessary evil, albeit one that pushes them to take charge of their health. Perhaps that’s the same thinking that drives consumers to regularly check their credit. In fact, according to a new study commissioned by Discover, a high percentage of those who regularly checked their credit over the past year said it helped them improve their behaviors. (You can view two of your credit scores for free on Credit.com.)

Here’s a look at the study.

Methodology

Discover — which began offering free FICO scores to all consumers in May — surveyed 2,000 consumers in March 2016 by the independent research firm Toluna. The survey was not based on FICO scores but self-reported estimated credit scores, and the maximum margin of sampling error was plus or minus 5 percentage points with a 95% level of confidence.

A Positive Impact

Of those who checked their credit scores seven or more times in a year, 73% said doing so improved their behavior. Not only were they motivated to pay bills on time, one of the main factors credit agencies use to determine their score, they also paid down loans and aimed to maintain a low balance on their credit cards. In contrast, 44% of those who checked their credit scores once a year saw the same impact.

And 76% of those checking their scores frequently (i.e., seven or more times in 12 months) saw their scores improve dramatically or slightly over the same time frame. Meanwhile, 72% who checked their scores four to six times during the year noted credit improvements. Only 38% of those who checked their scores once in the previous year saw their credit scores rise.

Knowledge Is Power

To continue the health analogy, identifying problems is the first step to solving them. This was especially true of millennials, or adults ages 18 to 24, who mostly (57%) told Discover that the biggest motivator for checking their scores “was to improve or maintain it.” Compare that to 47% of Generation X (ages 35 to 54) and 25% of baby boomers (ages 55 to 69) who checked just as often. Perhaps the younger generation is onto something.

At publishing time, Discover products are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Image: AndreyPopov

The post Checking Your Credit Regularly Helps You Improve Your Scores, Survey Says appeared first on Credit.com.