Finding an online bank that has the features you need to support your personal expenses and self-employed business is a huge deal.
At the most basic level, you want free, easy-to-use, and a high-interest rate for your money to grow.
This is why you need to check out Discover Bank’s suite of online accounts!
Nope, they don’t just offer credit cards.
Discover Bank has free, no-hassle savings and checking, and a money market account you can use to manage your personal and freelancing monies.
Note: This review is for a Discover Bank personal checking, savings, and money market accounts. If you are an LLC with a legal business name (like “Careful Cents, LLC”) and are accepting deposit payments under a business name, Discover will not accept deposits into personal accounts. Only deposits with your own legal name will be accepted. Here’s how you can open a business bank account.
What is Discover Bank?
Discover’s humble beginnings started with the credit card, which was introduced by Sears in 1985. According to Wikipedia, it was the first consumer credit card to offer cash-back bonuses and no-annual fees.
Since then, Discover has expanded its financial products to include loan servicing and banking.
With 24-7 US-based customer service phone support and over 60,000 no-fee ATMs around the country, Discover’s FDIC-insured online banking services are perfect for anyone!
Discover is especially great for location-independent freelancers who travel a lot — and I would know because I’ve been a Discover customer since 2005.
While they have many financial services to choose from, this Discover Bank review will only cover three of their banking products:
- Discover Cashback Debit Account
- Online Savings Account
- Money Market Account
Discover Cashback Debit Account
You can manage daily income and expenses while earning cash back on nearly every debit card purchase. That’s right!
You can earn cashback with your regular checking account via your Discover Debit card!
That means every time you use your card to buy supplies online, a latte, or a new book on Amazon, you get 1% cash back on up to $3,000 worth of purchases a month (up to $360 per year, some restrictions apply).
The best part is you never have to go into debt to make a purchase.
If you think that’s awesome, here’s what else comes with the Discover Cashback Debit:
- Completely free to open
- No minimum balance
- Free in-network ATMs
- Unlimited free transfers
- Free bill pay
- No hidden fees
- No monthly fees
Discover Cashback Debit now also works with Apple Pay!
Disclosure: ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
Discover Online Savings Account
Discover’s Online Savings account has one of the most competitive interest rates (start at 1%+ as of this writing).
It’s a great place to save all those cashback bonuses you’ve earned from your checking account. Plus, having your savings account linked to your checking account makes transferring money automatically super easy.
A Discover Online Savings account is free to open, and there’s no minimum balance required to maintain the account.
However, you must make a deposit of any denomination within the first 45 days of opening the account, or it will be closed automatically.
Discover Money Market Account
A money market account is a savings account with higher interest and higher balance requirements.
The minimum deposit to open, and minimum daily balance requirement for Discover’s Money Market account is $2,500. If your balance falls below this, you will pay a $10 per month fee.
In exchange for the high minimum balance requirement, a money market account offers high-interest rates and easy access to your money if you need it.
But be aware, there are some restrictions!
This is still considered a savings account, so federal law requires that you be restricted to six withdrawals per month (not including ATM and official check withdrawals — please read the restrictions).
With Discover’s Money Market account, you get two tiers of interest:
- Percentage interest rate for balances above $100k
- Percentage interest rate for balances below $100k
Sign up for a Discover Bank Account
Signing up for a Discover Bank account online is easy and free. You can call them via phone and have a representative walk you through the process, or you can click this link.
Clicking on a button or using an online sign-up form will take you to a secure page.
If you already have a Discover product like a credit card or loan, simply log into your online account and follow the prompts.
If you’re new to the Discover family of accounts, you’ll need to provide proof of identity by providing the following:
- First and last name
- Social security number
- Date of birth
- Mother’s maiden name
Things to know when signing up
Like with all financial products, it’s important to know a little bit of the fine print before opening an account online.
Here are a few important things to know when signing up for a Discover Bank account.
Personal bank accounts
You will be signing up for a personal bank account. Once your identity is verified, one account will be opened in your verified legal name only.
Discover Bank will not accept deposit checks or payments that are made to any other name. Signing up for a checking or savings account can be done online.
Limited account types
You can only sign up for one account at a time.
You are only allowed one type of account, meaning, you can have one cashback checking account, one online savings account, and one money market account.
Verifying your identity
Once your identity is verified, you will have immediate access to your account. That’s when you can try to open another account, but it must be a different type of account.
When signing up online, Discover uses a 3rd-party vendor to verify your credit profile only (no credit report or history is pulled).
If they cannot verify your profile online, it may be due to a discrepancy with an address, full name, date of birth, or social security number. If this is the case, they will give further instructions on how to submit proof of identity.
Accessing your account
After submitting proof-of-identity documents, you should have access to your account with 2-3 business days.
After you sign up for one account, it will be easy to sign up for the next account since you have already been verified.
What are Discover Bank’s fees?
All three types of accounts listed in this review are completely free to sign up for and free to use.
The only costs you may incur are for:
- The money market account ($2,500 to open, $2,500 minimum monthly balance requirement)
- The Cashback Debit checking ($15 fee for stop-payment & insufficient funds, $30 outbound wires).
Best Discover Bank Online Features
Discover’s mobile banking app makes it one of the better banks for phone use. It’s available for iOS and Android platforms.
With the mobile app you can manage all your accounts in one place:
- Earn cashback with a debit card
- Earn an excellent savings interest rate
- Deposit checks
- Pay bills
- Transfer money
- View balances, awards, and statements
- Find the nearest in-network ATM
- Make requests and manage your bank via their mobile app
- Contact customer service right from your phone
Discover Cashback Debit features
Discover doesn’t have harsh penalties against self-employed freelancers who receive payments from PayPal, Etsy, or other similar places. As long as checks and other deposits are made with the account holder’s legal name, you’re all good.
I asked them to make sure of this since some freelancers ran into this problem with another online bank in the past (Ally Bank is one that will penalize your account).
If you use Discover’s cashback checking account as your solo business checking account, you could be earning cash back on business expenses.
Use your Discover Debit card and get 1% cash back!
All purchases you make with your debit card qualify for cash back on up to $3,000 in purchases each month. That means you can get back a maximum of $30 a month on qualifying purchases.
However, it’s important to note that the following types of transactions DO NOT earn cash back:
- ATM transactions
- Money order purchases or cash equivalents
- Cash-over portions of point-of-sale transactions (when the checkout terminal asks if you “want cash back?”)
- Peer 2 Peer payments
- Purchases made using third-party payment accounts like PayPal and Venmo
Discover Online Savings features
Save bonus cash and profit income in an account that earns a competitive interest rate and is close by when you need it. Transferring between a Discover checking and savings account is quick and easy.
And it’s a great place to keep short-term expenses like quarterly tax payments and irregular bill payments like domain and web hosting subscriptions or future travel expenses.
Fincon, Travelcon, or Bookcon anyone?
Discover Money Market features
Money market savings accounts offer two things that make it an excellent option for both sole-proprietors and LLCs:
- A high-interest rate for high balances
- Easy access to money if needed
This makes it a perfect vehicle for long-term, non-investment financial goals for your business.
Are you thinking about expanding your business to include employees, team members, inventory, or want to upgrade your office space?
Whatever long-term goals are for your business, you’ll need to save up for it.
Discover’s money market account is where you can put your non-investment savings so it can interest and be easily accessible without penalty if you need it.
Ready to try Discover Bank Online?
When it comes to finding a bank for your personal or business accounts, choosing an online bank is the best way to go. Online banks save you money and hassle, especially if you do business online.
Remember, you want a bank that can give you fee-free checking and savings, hassle-free access to your money, and high-interest rates for the money you save with them.
While Discover isn’t the only bank available online, it is the one bank that has been rated highly by the Careful Cents community.
Click here to get started with a free Discover Bank account today!