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Do You Need a Rainy Day Fund If You Already Have an Emergency Fund?Competitive CD Rates and a $50 Bonus at Discover Bank - Nationally Available
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ON BY Ken Tumin
Update 6/27/09: New Money market rate tiers: 1.50% APY $2.5K-$5K, 1.55% APY $5K-$10K, 1.65% APY $10K-$25K, 1.75% APY $25K-$50K, 1.85% APY $50K-$100K, 1.95% APY $100K+
Update 6/13/09: New money market rate tiers: 1.50% APY $2.5K-$5K, 1.55% APY $5K-10K, 1.65% APY $10K-$25K, 2.00% APY $25K+
Update 3/15/09: The BestCashCow bonus code has expired. However, the Mainstreet website claims to have its own $50 bonus promo code that's good through 4/15/09.
Discover Bank is offering a $50 bonus for opening a new CD with a minimum deposit of $10,000. The offer is scheduled to last through February 28, 2009. You must enter Offer Code D100739 on the online form in order to qualify.
Unfortunately, Discover Bank's short-term CDs aren't too competitive. However, its CDs with terms of 1 year and longer are fairly competitive. The rates as listed at Discover's rate table as of 2/12/09 range from 2.75% APY for 1 year to 4.00% APY for 7 years. Adding $50 to the 1-year CD with a $10K investment would result in an effective APY of about 3.25%. Larger deposits and longer terms would diminish the effect of the bonus.
AAA members who live in certain areas can receive a 5 basis-point rate bump on all Discover CDs. I doubt the $50 bonus would apply for these cases, but the AAA bonus may be better for larger deposits and longer terms. 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:
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 has some solid ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 5 stars (superior) at Bankrate.com. Both ratings are based on 9/30/08 financial data. Discover Bank is a member FDIC (Certificate # 5649).
Update 6/13/09: New money market rate tiers: 1.50% APY $2.5K-$5K, 1.55% APY $5K-10K, 1.65% APY $10K-$25K, 2.00% APY $25K+
Update 3/15/09: The BestCashCow bonus code has expired. However, the Mainstreet website claims to have its own $50 bonus promo code that's good through 4/15/09.
Discover Bank is offering a $50 bonus for opening a new CD with a minimum deposit of $10,000. The offer is scheduled to last through February 28, 2009. You must enter Offer Code D100739 on the online form in order to qualify.
Unfortunately, Discover Bank's short-term CDs aren't too competitive. However, its CDs with terms of 1 year and longer are fairly competitive. The rates as listed at Discover's rate table as of 2/12/09 range from 2.75% APY for 1 year to 4.00% APY for 7 years. Adding $50 to the 1-year CD with a $10K investment would result in an effective APY of about 3.25%. Larger deposits and longer terms would diminish the effect of the bonus.
AAA members who live in certain areas can receive a 5 basis-point rate bump on all Discover CDs. I doubt the $50 bonus would apply for these cases, but the AAA bonus may be better for larger deposits and longer terms. 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
- Early withdrawal penalty of 6 months interest on amount withdrawan for terms of 1 to 5 years
- Grace period is 9 calendar days after the CD matures
- Same rates available in IRAs
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 has some solid ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 5 stars (superior) at Bankrate.com. Both ratings are based on 9/30/08 financial data. Discover Bank is a member FDIC (Certificate # 5649).
