Discover Bank Ups Savings and MM Rates: Second Increase in Two Months

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Deal Summary: Rate increases: Online Savings Account, 1.10% APY, No minimum balance: Money Market, 1.01% APY $100k+, 0.95% under $100k

Availability: Internet Bank

Today Discover Bank increased the APY of its Savings Account from 1.01% to 1.10%. This is just 43 days since Discover increased the APY from 0.95% to 1.01%. While this new rate isn’t exceptional for an online savings account, it shows that competition among internet banks is heating up as they all start responding to the Fed rate hikes. This latest rate increase by Discover may be an early move in anticipation of next week’s Fed rate hike that’s widely expected to take place.

The 1.10% APY applies to all balances. In March, Discover Bank removed the $500 minimum deposit requirement for opening the savings account. Now the Discover Savings Account has no minimum opening deposit. Plus, it has no monthly maintenance fees.

In addition to the Online Savings Account, Discover increased the rates on its Money Market Account. For balances of at least $100k, the APY increased from 0.90% to 1.01%, and for balances under $100k, the APY increased from 0.85% to 0.95%. Unlike the savings account, the money market account has a minimum opening deposit of $2,500, and a minimum balance requirement of $2,500 to avoid a $10 fee for each statement cycle. The advantage of the money market account over the savings account is access to your money with checks and with a debit/ATM card.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.15%--Discover BankOnline Savings
1.01*%$100k-Discover BankMoney Market
OTHER TIERS: 0.95% Up to $100k
Accounts mentioned in this post. Rates as of August 17, 2017.

The last time Discover Bank was offering a rate this high on its savings account was September 2011 when the APY was 1.10%. The lowest rate was in 2012 and 2013 when the savings account rate was 0.80%. The rate increased 5 basis points in 2013, in 2014 and in 2015. Before the April rate increase, the APY had been at 0.95% since June 2015.

One important feature of an internet bank is its ACH bank-to-bank funds transfer service. Discover Bank does allow large ACH transfers to be initiated from its online account center. According to the Account Center Banking agreement, the incoming and outgoing limit is $250,000 per 30-day rolling period with a combined incoming/outgoing limit of $300,000 per 30-day rolling period.

Bonus for AAA Members

If you’re an AAA member, there’s an additional reason to open a Discover Online Savings Account. AAA members qualify for a $100 bonus. Details are listed in this AAA section of Discover Bank’s website. The rates and other features are the same as Discover Bank’s standard Online Savings Account. Below are the details of the bonus that are listed in the small print of the AAA/Discover Bank website:

  • Apply for your first AAA Online Savings Account from Discover Bank by 6/30/17.
  • Enter Offer Code AAA100 when applying.
  • Deposit at least $15k by 7/14/17.
  • Bonus will be credited to the account by 7/28/17 if requirements are met.

I spoke with a Discover Bank CSR, and I was told that all AAA members anywhere in the U.S. are eligible for this bonus. The small print says that the offer is not valid for existing or prior AAA savings customers. I asked the CSR if someone who already had the standard Discover Bank Online Savings Account would be eligible for the bonus. According to the CSR, they are eligible. The standard Discover Bank Online Savings Account does not disqualify you for this bonus. Only the AAA savings account that’s opened through AAA disqualifies you for this bonus.

In addition to the bonus, AAA members have access to CDs with rates that can be around 5 basis points higher than the standard Discover Bank CDs. Not all CDs have higher rates. A few examples of CDs that do have higher rates are shown below:

  • 12-month CD: 1.40% APY (AAA members), 1.35% APY (standard accounts)
  • 24-month CD: 1.55% APY (AAA members), 1.50% APY (standard accounts)
  • 60-month CD: 2.31% APY (AAA members), 2.25% APY (standard accounts)

When you apply for these AAA accounts, you’ll need to enter your AAA membership ID and club code in the application.

In April I had thought Discover had discontinued its relationship with AAA. The reason is that for the FL/GA/TN region, AAA’s website links to the bank, Auto Club Trust, FSB. This bank offers different products and rates than what Discover Bank offers.

Higher Savings Account Rate for AAII Members

Discover Bank still has an agreement with the American Association of Individual Investors (AAII). AAII members still receive a 5-bps rate bonus on all products (the Online Savings Account APY is now 1.15%, and the top APY of the Money Market Account is 1.06%).

Availability

Headquartered in Greenwood, Delaware, Discover Bank is an internet bank with no brick-and-mortar branches. To qualify to open an account of any kind with Discover Bank,

each Account owner must be a U.S. citizen or other U.S. person, be at least 18 years old, have a valid Taxpayer Identification Number, have a valid physical U.S. address and provide an electronic consent and signature.

Applying for the Discover Savings Account must done online or by phone (1-800-347-7000). If you’re an AAA or AAII member, make sure to use Discover Bank’s webpages specifically set up for these organizations.

Bank Overview

Discover Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 6.61% (excellent) based on March 31, 2017 data. In the past year, Discover Bank has increased its total non-brokered deposits by $4.85 billion, an excellent annual growth rate of 15.74%. Please refer to our financial overview of Discover Bank (FDIC Certificate # 5649) for more details.

As one of the largest financial services firm in the country, Discover Bank traces its roots back to the Greenwood Trust Company, which was established in 1911. Discover Bank came into being following the purchase of the Greenwood Trust Company in 2000. Today, Discover Bank has assets in excess of $91 billion and more than 415,000 ATMs spread across the United States.

How Discover Bank’s Online Savings Account Compares

When compared to 207 nationally-available savings accounts from banks and credit unions tracked by DepositAccounts.com,, 9 banks offer higher rates for deposits of $2k. The table below shows how the Discover savings account compares with a sample of the top nationally-available savings accounts:

The above rates are accurate as of 6/9/2017.

To review the top savings account and money market rates, both nationwide and in your local area, please refer to our savings account rates table, our money market rates table or our Rates Map page.

Related Pages: Salisbury savings accounts, savings accounts, money market accounts, nationwide deals, Internet banks

Comments
rhutnik
rhutnik   |     |   Comment #1
How do you obtain the AAII bonus? Can you be a 1 year member ($29) or do you have to be a member for life to obtain this bonus for "life"? Does this rate always stays 5 bp above the current savings account rate?
deplorable 1
deplorable 1   |     |   Comment #2
Discover also does custodial accounts for kids and will actually give them any current sign up bonus. These make for a great first savings account as there are $0 fees. Most banks will actually charge fees for a kids savings account or require monthly activity to keep the account fee free. The only real drawback is the $25 minimum ACH transfer and long ACH transfer times(usually 5 days).
RJM
RJM   |     |   Comment #3
Glad to see this higher rate. Puts pressure on the banks under 1.1%.

But, with Allys no penalty at 1.35%, this isn't a great deal except for small amounts.
john
john   |     |   Comment #4
Yeah, but Ally 1.35% has a min of 25k. Not everybody has 25k...
RJM
RJM   |     |   Comment #10
Yes, john, that's why I said "small amounts".
deplorable 1
deplorable 1   |     |   Comment #6
That's a 1 year CD this is just a savings account with 100% access to your funds penalty free. There are 1.3% savings accounts now. A 2% 2-3 year CD would be better deal currently.
rzelman
rzelman   |     |   Comment #5
The "premium" savings account that I had was still paying only 1% as of 6/10 but it was easy to apply for the AAA savings and immediately transfer the money from the old account to the new one. I wouldn't have known about the promotion if not for this blog, Thanks
CC in CA
CC in CA   |     |   Comment #7
I, too, have the "premium" savings account. I sent a message last night to Discover to ask about the interest rate, and today it's an APY of 1.10% showing on my account. Discover sent me a message back saying that the APY/rate was already in effect for me but not showing. This happened the last time they raised the rate a month or so ago. I had to send a message then, too, and then the rate appeared correctly. This is not the best business practice for those of us who are loyal "premium" account members (and I also have a bunch of CDs there). But, still I love Discover Bank. I've been pretty happy with them for the most part.
buckeye61
buckeye61   |     |   Comment #8
I also have one of their "Premium" Savings accounts, but I'm not sure what attribute makes it premium. Initially, this account had a higher interest rate then the standard Online Savings account, but that ended the first time they lowered the rate on the standard savings and I'm not sure what other benefit the account offers. Also, as a AAA member I'm going to try and take advantage of the $100 promo by opening my first AAA version of the Online Savings account. We'll see how that turns out!
rzelman
rzelman   |     |   Comment #9
They make that very easy to do and the new account can be funded from the old. I mistakenly omitted typing in the promo code so hopefully this won't disqualify me from receiving the $100 bonus. I just sent a message to them regarding this so will find out in a day or two.
rzelman
rzelman   |     |   Comment #12
Bad news. Discover wrote back to inform me that the $100 bonus will be forfeited because I failed to provide the promo code when opening the account. Don't make the same mistake and overlook the promo code box like I did.
buckeye61
buckeye61   |     |   Comment #13
$100.00 Promo Bonus posted yesterday. 2 weeks, not bad!
RJM
RJM   |     |   Comment #11
Yes, mine was initially showing the lower rate but its updated today.

Not that .10% is going to break me.
Discover Bank Increases Savings Account Rate To 5-Year High

Deal Summary: Online Savings Account, 1.01% APY, No minimum balance

Availability: Internet Bank

Today Discover Bank increased the rate of its Savings Account from 0.95% to 1.01% APY. While this isn’t an exceptional rate for an online savings account, it’s another sign that banks are slowly starting to respond to the Fed rate hikes. Discover Bank is one of the big internet banks, and it’s always nice to see rate hikes at these banks.

The 1.01% APY applies to all balances. In March, Discover Bank removed the $500 minimum deposit...

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Discover Bank Has $100 Bonus On New Online Savings

UPDATE 4/20/2017: Offer has been extended through May 31, 2017, and has a new coupon code (SAVE417E1).

Deal Summary: $100 bonus on new Online Savings account.

Availability: Nationwide (internet bank)

Discover Bank is offering a $100 bonus when opening a new Online Savings account with a minimum deposit of $15k. This promotion is for customers who have never had a Discover Bank Online Savings or Money Market account.

$100 Bonus Requirements

  • Open an Online Savings account by March 3 May 31, 2017.
  • Use offer code SAVE117D1 SAVE417E1 when...
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