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Discover Bank's CD Rates Up To 5.02%

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Discover Bank just did another increase to their CD rates. The long-term rates are near the top as compared to other online banks. AAA members who live in certain areas can receive 5.02% APY on a 5 year term which is 6 basis points higher than Discover's standard 5-year yield. Below is the list of the competitive CD rates for both the regular Discover customers and the AAA customers:

Certificate of Deposit Rates as of 6/18/08

Term          Disc   Disc/AAA
               APY      APY
 9 months    3.56%    3.61%
12 months    3.76%    3.82%
18 months    4.02%    4.08%
24 months    4.23%    4.28%
30 months    4.34%    4.39%
36 months    4.44%    4.49%
48 months    4.70%    4.75%
60 months    4.96%    5.02%

Discover's standard rates are listed at this CD rates table. To find the AAA rates at Discover's website, start at AAA's financial services page and enter your zip code. You should then see a Discover Bank link on the right. Note, this Discover Bank AAA accounts don't seem to be available for all zip codes.

The details about Discover's CDs are listed at their CD overview page and the CD FAQs. Some of the details include:
  • Fund CD with an ACH electronic funds transfer or check
  • At maturity, they don't allow for a reverse ACH transfer. Options to receive funds include wire transfer ($20 fee), free check by mail or transfer into your Discover MMA.
  • Early withdrawal penalty of 6 months interest on amount withdrawn for terms of 1 to 5 years
  • Grace period is 9 calendar days after the CD matures
Discover Bank's money market account has been fairly competitive with rates. Like the CDs, the MMA rate also had a little bump. It's now 3.14% APY for balances between $2,500 and $25,000 (as of 6/18/08). There's a $10 monthly fee if the balance falls below $2,500. The AAA version has a yield 5 basis points higher, plus it only requires a minimum balance of $1,500 to avoid the fees.

In a previous post, a reader mentioned in the comments about his problems with Discover Bank's customer service. In his opinion the customer service "is often unavailable, and unreliable at best." If you've been a Discover Bank customer, your comments are appreciated.

For those who are looking for a healthy bank, Discover Bank may be a good option. It still has a 4 star ranking (excellent) at BauerFinancial based on 3/31/07 data. Discover Bank is a member FDIC (Certificate # 5649).

Thanks to the reader who mentioned these new Discover rates in the finding-the-best-deals post..
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Previous Comments
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Anonymous
  |     |   Comment #1
Does anybody know if Discover Bank will pull a credit (soft or hard) for opening a CD? Thanks.
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1
L Libza
  |     |   Comment #2
I opened a money market account online on September 25, 2008 for $3,000 using a direct transfer from my local checking account. After several days and not seeing any money transferred, I called Discover Bank and they had my application but couldn't explain why my account account wasn't funded. Finally on Oct. 6 my opening deposit was posted. When I opened the account, I chose to have both checks and a debit card issued, but after more than a month, I still haven't received them. I have used the online banking for transferring funds between banks. These tranfers take three days, just as they claim. I do have a problem with the on-line account reports. My report shows the correct balance, but the account history report omits one of my deposits. I have called them about this problem but have not received a satisfactory answer yet. Another thing, don't call on Saturday and ask to speak to a manager, because they don't work on weekends.
Reply
1
Anonymous
  |     |   Comment #3
discover bank's customer services is terrible. yes i use their services b/c they pay more than anyone else

their website is worse than my local credit unions.

if you are one that is going to have to ever call them...good luck!
Reply
1

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