Interested in opening a savings account at Discover Bank? Read this article first.
A few weeks ago, I noted that E*TRADE Bank will be moving some customers’ accounts to Discover Bank. The only customers affected by this move are those who do not have brokerage accounts. I have a brokerage account through E*TRADE, so my savings account will not be moved.
Nevertheless, I am interested in checking out Discover Bank because they are currently offering a very good interest rate.
Opening a Discover Bank Online Savings Account
Step 1. Deposits at Discover Bank are insured by the FDIC and the bank has earned a five-star “Safe & Sound” rating from Bankrate. FDIC insurance alone, regardless of the five-star rating, ensures that regardless of the solvency of the bank, I will be able to withdraw my full deposit when needed.
When beginning the application process, Discover Bank lists everything needed to open an account. The few requirements lead me to believe that the account opening process will be smooth and quick. As with all banks, an address inside the United States, a date of birth, and a Social Security number are necessary.
I choose at this point to open a savings account. Discover Bank also offers FDIC-insured Certificates of Deposit (CDs) and CD Individual Retirement Accounts (IRAs) with high interest rates as well as Money Market Accounts.
At this time, Discover Bank allows the new customer to add a joint owner to the account. I don’t plan to share this account, so I decline.
Step 2. The second page of the application determines how to fund the account. I decide to link the account to my ING Direct Electric Orange checking account with an initial deposit of $2,500 funded electronically. Discover Bank requires a minimum of $500 for the initial deposit. If you would prefer to fund your account via a wire or check, Discover Bank offers these options as well.
In order to give your consent to Discover Bank to perform an ACH transfer, you will need to provide an electronic signature.
Step 3. All that remains now is to verify the information you have provided and electronically sign the tax certification. Banks are required to keep account owner signatures on file, and Discover Bank handles this electronically as well.
Step 4. Once the bank processes your application, you will be presented with a number of security questions based on the information in your credit report. Many websites use this type of authentication now. For example, you may be asked to select the town where you lived previously from a list of choices.
Note: On the confirmation page, you will see your full account number. Save this information by printing the page now because you will need your account number later in order to activate your online access. The bank will not send it to you through email, and it will take up to ten days to receive your welcome package in the mail.
After passing the security and identity check, I received an email confirming the creation of my new account, including a partially-hidden account number. Those who decide to fund their new account via check will receive in this email the bank’s depository addresses for regular U.S. mail or overnight mail. Interestingly, wire transfers are processed through Mellon Bank rather than being sent directly to Discover Bank.
Using the Discover Bank Online Savings Account
Twenty-four hours and ten minutes after receiving the first email, I received the second in which Discover informed me my account has been funded. That is faster than I expected, considering I started the process over a weekend. This email includes a link to Discover’s website whereupon I can register to view my new account online. After verifying this email was legitimate and not a phishing attempt, I followed the instructions.
Did you save your account number? If not, you will need to call Discover Bank’s customer service. You need the account number, your Social Security number, your date of birth, and your mother’s maiden name in order to activate online account access.
After selecting a user ID, a password, and security questions, you will be able to view your account online. I was surprised to see Discover had already posted interest to my account. You can see how much I received for one day in the screen shot included here.
You can use the Discover Bank website to set up recurring transfers through their “Automated Saving Plan” or initiate a one-time transfer from a linked account. If you want to link a new account, you will be asked to enter the banking information and required to verify small trial deposit amounts. Unfortunately, the account I used for the initial deposit is not automatically considered a linked account. I must go through the process of adding the same account to the list.
Users of Quicken may be disappointed. Discover Bank does not support Direct Connect (automatic configuration of the account and transaction downloads directly from Quicken) or Web Connect (transaction downloads by logging into the website). You can, however, include Discover Bank on Mint and any other website powered by Yodlee.
Discover Bank also offers a money market account for paying bills. This type of account offers debit card access, but you will need a balance of $10,000 to earn interest at a competitive rate.
Conclusion
The process of opening a Discover Bank online savings account was smooth and quick. This is the opposite of what I experienced with Everbank.
When I called Discover’s customer service to get my account number, the representative was helpful and friendly. My call, placed on a Sunday afternoon, was answered without any hold time.
Discover Bank’s features are basic, but it meets the needs of savers with the bonus of a highly competitive interest rate. I plan on taking a closer look at the bank’s high-yield CDs in the near future.
What do you think of Discover Bank? Let us know in the comments.
Bank data
| Discover Bank | |
|---|---|
| Routing (ABA) number | 031100649 |
| Established | August 30, 1911 |
| FDIC certificate | 5649 |
| Savings interest rates | Click here to see rate |
| Money Market interest rates | Click here to see rate |
| IRA CD interest rates | 1-year IRA CD rate, 10-year IRA CD rate |
| Standard CD interest rates | Click here to see rate |
| Location | 12 Read’s Way, New Castle, Delaware |
| Direct Connect | Not supported |
| Web Connect | Not supported |
| Mint/Yodlee | Supported |
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{ 8 comments… read them below or add one }
I recently opened a Discover account as well because it is offering rates that are double my other bank. I’m not normally a rate chaser, but there are times when you need to consider the total value of moving your money, and double the rate is a biggie.
Rate chasing is generally a waste of time. Most high-yield accounts are rather close, and today’s interest rate leader might not be tomorrow’s. But if a few minutes spent will earn you over $100 or more in interest a year, it could be worthwhile once or twice.
Agreed. I don’t normally chase rates, but double the interest rate is a big difference and I have enough in my savings account that it is probably worth it to do it once.
No Quicken Direct Connect support? My E*TRADE account has been moved to Discover. E*TRADE supported Direct Connect which made things easy. I’ll probably close this new Discover account rather than enter interest in manually.
Yes, this is very disappointing to me as well… I’ve been sending “Add New Institution” requests ( http://bit.ly/94cq95 ) daily in hopes that they’ll get Direct Connect working, as neither Direct Connect nor Web Connect are functioning. VERY frustrating.
Quicken is coming full circle to being the crapware it was 10 years ago. Now with Microsoft Money being discontinued, I guess Intuit feels that customer service is no longer a priority, now that they are the only game in town…
This article claims that Discover Bank works with mint.com, but that has been broken for months since they changed their web site. So, currently, no mint.com access.
I had the same trouble with Mint.com, and on March 31, 2010, the issue was resolved. You can now use Mint.com with Discover Bank, you just need to answer an extra “challenge question” when synching up with Mint.com
How many days is the hold on the initail deposit and besides how many days is the hold on other deposit other than the initial funding money,