About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Higher Rates for AAA Members at Discover Bank


This deal has been around for a while, but I thought it would be a good reminder for both current Discover Bankcustomers and those considering a Discover Bank account. AAA members can receive a 5 basis-point rate bump on Discover Bank savings account, money market account and CDs. I confirmed this by phone with two Discover Bank customer service representatives. However, there are a few complications.

New Discover Bank Customers

First, AAA doesn't make it easy for all members to see this deal. The Discover Bank CSR said new customers could apply for this deal at www.aaa.com/deposits or by phone. However, AAA appears to only show this Discover deal to those in certain states. I'm in Texas, and it will show a brief page with the message "The service/function is not available in your area". It then brings up the Texas AAA page, and there's no mention of Discover Bank. When I told the Discover Bank CSR about this, she was confused. She was in Phoenix, and the page prompted her to enter her zip code. So it appears AAA automatically determines your state from your IP address.

Even though you may not be able to get to aaa.com/deposits, you should still be able to qualify for the better Discover Bank rates. According to the CSR, you can be a resident of any state. You just need to have your AAA membership number, and they can open the special AAA account by phone. Once you have the account opened, you can access it from the regular Discover Bank website.

Existing Discover Bank Customers

The second complication is for existing Discover Bank customers. Those who have Discover Bank's Premium Savings Account are currently receiving a rate that's 10 basis points above the standard savings account rate (1.30% APY vs. 1.20% APY). The Discover Bank CSR said that existing customers can qualify for the higher rates if they're an AAA member. However, they have to open a new account. So if you currently have the standard Discover Bank savings account that's paying 1.20% APY, you can call and they can open a new AAA savings account that pays 1.25% APY. They can then transfer the money to the new account and close the old account. Unfortunately, this has no benefit if you have the Premium Savings Account which currently has a 1.30% APY.

If you don't have Discover Bank's Premium Savings Account and if you're an AAA member, then it would be worth calling and asking for this new account.

Discover Bank's Premium Savings Account

How to get the Premium Savings Account? Unfortunately, the CSR said this is by invitation only.

In my opinion, this Premium Savings Account seems to have been a way to keep customers happy last year when they were cutting rates. Discover Bank launched their new Account Center last year with a lot of marketing. Many people who opened the savings account during this time appeared to have been moved into this Premium Savings Account. Its rates didn't drop as quickly as the standard savings account rates that are advertised at Discover's website. I'm sure that helped Discover Bank retain more deposits from those customers.

However, the Premium Savings Account rates did fall, and it's now only 10 basis points higher than the standard rate. The problem with having this Premium rate is that it's not as easy to track as the standard rate which is publicly available at Discover's website. To see the rate, you have to log into your account. Discover's Account Center clearly shows the current APY of your account.

Discover Bank CDs

Please refer to my Discover Bank savings account and CD review for more account details. Discover Bank still offers 3.00% APY for a 10-year CD. This is a very long term, but the early withdrawal penalty is better than many other CDs with terms of 7-years or longer. According to Discover's FAQs, the penalty for terms over 5 years is "9 months simple interest on the amount withdrawn".

I have more details on Discover Bank's internet banking features and its ACH transfer service in my Discover Account Center review.

Related Pages: savings account, CD rates

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Amarillo Amelia
  |     |   Comment #1

Great article.  On a different subject, can you write about Pen Fed?

1- what ever happened to those great 10 yr. cds they were going to offer in 2011?

2- looks like they just slashed their cd rates (?)

  |     |   Comment #2
Just remember that the AAA basis points adds just $5 per year for every $10000 you invest.  Possibly just $3.50 after taxes.


So consider if it's worth the hassle, especially if you have to open a new account just to get the deal.
  |     |   Comment #3
My etrade savings account was sold to Discover so I withdrew all but $5 and let the account sit.  After a few months, Discover notified me it was upgrading my account to a Premium Savings Account.
  |     |   Comment #4
Ed's comment (#2) is SOOOO wise.  How many of these tiny increments of % are worth the effort?????  Some of these "offers" are not worth anyone's time. 
  |     |   Comment #5
I am going to close all my RCA accounts. It is no more worth the hassle.
  |     |   Comment #6
Re Amelia's question above about PenFed, they had been talking about launching their new 10 year CDs sometime early in 2011, based on Ken's prior reporting. But then they seemed to pull the plug on that plan, and the last report was no sign of when or if the 10 year CDs would be forthcoming.

PenFed did go ahead, as promised, in January and open new CDs for certain existing customers who had made advance reservations  under a special promotion offered last year. Those had an APY of 5% for the longest available term, which was 10 years under that one time special promotion (which is now long since closed).

I don't believe PenFed ever publicly said what kind of rate they were envisioning for the 10 year CDs that they had been planning to offer subsequently to the general public. And now of course, we don't know if or when those will be offered at all.

  |     |   Comment #7
Discover also offers the same rates on IRA CD's as it does on regular ones.  Most other bank's IRA rates are a lot less.
  |     |   Comment #8
I have an existing Discover savings account and I just called them to switch it over to the AAA membership account (wish I'd know this was available before I'd opened it...).  The whole process took less than ten minutes and the account is already active.  I was told by the CSR that the bump up in the rate is 5 basis points, not 10, and is the same for all AAA members regardless of state (I'm in NY).
  |     |   Comment #9
The premium account advantage dropped from 10 basis points to only 5 basis points higher than the publically available savings rate.  This appears to have coincided with the 8/2/11 rate drop from 1.15% to 1.10% (premium 1.25% to 1.15%).  The premium account is losing it's edge.
  |     |   Comment #10
Discover Bank has ended its .5% higher rate on AAA Savings Account as of mid July 2012.  No notice to current AAA Account - Discover Bank Account holders - claim it is up to "customer" to watch the variable rates.
  |     |   Comment #11
I called Discover three times after I moved before they would change my address. Finally, my statements began arriving at my new home.

Now my 1099 hasn't arrived. I'm on a 6-8 minute hold waiting for an agent. Last week the agent told me to wait till February 15, that my 1099 would probably arrive. But I'm pretty sure that the 1099's were probably still tied to my old address and there is no longer any forwarding.

I think the interest rate is not worth the hassle.

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