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Discover Bank Does I Continue to Earn Interest Cd Grace Period

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Details

Star rate 3.8
3-month APY 1.00%
6-month APY 1.75%
9-month APY 1.85%
1-year APY 3.25%
18-month APY 3.25%
2-year APY 3.30%
30-month APY 3.30%
3-year APY 3.40%
4-year APY 3.40%
5-year APY 3.50%
7-year APY 3.50%
10-year APY 3.50%
Early withdrawal penalty 90 days interest for terms of 1 to 11 months
180 days interest for terms of 12 to 47 months
270 days interest for terms of 48 to 59 months
540 days interest for terms of 60 to 83 months
Minimum deposit to open $2,500
Interest compounding Daily
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Review by

Peter Carleton

peter.carleton@findercrew.com

Peter Carleton is a writer that covers banking and investing, breaking down what you need to know about where you put your money. When Peter's not thinking about cutting-edge banking apps and robo-advisors, he runs a creative agency and spends his spare time cooking or reading.

Expert review

Discover's CDs are best for those looking for a long-term CD option. It offers a wide selection of term lengths, and you'll earn up to 3.50% with a five-year term. Its interest rates are consistently some of the most competitive we've seen on the market.

For example, if you put $2,500 in a 24-month Discover CD, you'll earn: $2,500 x 3.10% for 24 months = $159.69 in interest.

Putting the same amount in a Quontic Bank CD will earn you: $2,500 x 1.95% for 24 months = $99.42 in interest.

There are no fees to open or maintain a Discover CD account. However, you'll need to deposit at least $2,500 to open one of Discover's CDs, and you won't be able to visit a branch. That said, Discover can offer higher interest rates likely because it keeps its overhead low without bank branches.

Open Discover CDs online or by calling 800-347-7000 any time to speak with a representative.

You can choose either from a standard CD with multiple term options and interest tiers to help your money grow. Or save for retirement with an IRA CD that offers guaranteed returns.

  1. Select Apply now.
  2. From the Discover website, hover over the Banking tab and click CDs.
  3. Click Open an Account.
  4. Continue as a new customer or Log in if you already have a Discover account.
  5. Enter your personal and contact information along with your citizenship and employment details, then click Continue after each step.
  6. Choose your CD term and deposit amount, then click Continue.
  7. Decide whether or not you'd like to add another CD, beneficiary or joint owner, then choose how to fund your account.

Eligibility

To open a Discover Bank CD, you'll need to meet these eligibility requirements:

  • Be a US citizen.
  • Be at least 18 years old.
  • Have a valid Social Security number or taxpayer ID.
  • Have a physical US address.

Required information

Regardless of how you choose to open your Discover CDs, you'll be asked for the following information:

  • Name, date of birth and address.
  • Social Security number or Tax Identification Number (TIN).
  • Employment information.

Funding options

When you open this account, choose whether you want to fund it during the application or within 10 days of opening.

  • Online transfer from another bank account.
  • Bank transfer by phone.
  • Mail a check.

    Regardless of which option you prefer, Discover CDs offer many benefits:

    1. Numerous terms. Choose from terms between three months and 10 years.
    2. Daily interest calculation. Interest is calculated and compounded daily and credited to your account monthly or have it transferred to an eligible Discover bank account.
    3. Competitive rates. Discover pays between 1.00% and 3.50% APY on its CDs — higher than most of its competition.
    4. Low withdrawal fees. Compared to some of its competitors, Discover has relatively low early withdrawal fees.

    How much interest you can earn

    Compare how much in earnings you can make with how long your money stays in the account.

    Term length APY Amount in savings Interest earned at maturity
    1 year 3.25% $2,500 $82.65
    2 years 3.30% $2,500 $171.10
    3 years 3.40% $2,500 $269.90
    5 years 3.50% $2,500 $482.82

    While Discover CDs offer many benefits to help you save, there are a few potential drawbacks to look out for:

    1. No branches. Discover operates entirely online, so you can't visit a branch for questions or assistance.
    2. No partial withdrawals. You won't be able to make any partial withdrawals from a CD before maturity. If you want to make a withdrawal, you'll need to take out the full amount and your CD will be closed.
    3. High minimum deposit. Unlike some other CDs, you'll need a deposit of at least $2,500 to open a Discover Bank CD.

    If you're looking for a similar account with high APYs, consider a Capital One CD account with APYs over 3.00% for its highest term lengths. Unlike, Discover, Capital One offers limited access to branches and one-stop-shop convenience if you have its other accounts.

    If you prefer a CD with the option of in-person banking, you'll want to keep comparing your options before deciding.

    See competitors' term lengths and APYs to find the best option for you.

    Discover is accredited with the Better Business Bureau (BBB) and garners an A+ rating for how it deals with customer complaints in a timely manner. The bank has been offering financial services for over 60 years.

    However, the company gets 1 of 5 stars out of nearly 300 customer reviews on the BBB site. It also receives 1.4 out of 5 stars on Trustpilot, summing up another 174 reviewers. Keep in mind that these customers mainly review products other than Discover's CDs.

    Customers complain about unexpected closed accounts, confusion over how its loans or credit card services work and difficulty disputing problems with their accounts. Happy customers enjoy the company's speed in processing an application, its intuitive mobile app and its focus on customer privacy.

    You'll be notified 30 days before your CD reaches its maturity date and you'll have a nine-day grace period to choose between the following options:

    1. Let it automatically renew at the same rate and term.
    2. Make an additional deposit.
    3. Withdraw the principal or interest

    Your CD will automatically renew at the end of the grace period if you don't take any action. In this case, you'll be locked into the CD term and will be charged an early withdrawal penalty if you want to access your money.

    If you withdraw your money before your CD reaches its maturity date, you'll be charged an early withdrawal penalty, which varies depending on the term:

    • 1 to 11 months: 90 days of interest
    • 12 to 47 months: 180 days of interest
    • 48 to 59 months: 270 days of interest
    • 60 to 83 months: 540 days of interest
    • 84 to 120 months: 720 days of interest
    • By phone: Discover's 24/7, US-based customer service can be reached at 800-347-7000
    • Mail: Send your questions to:
      • Discover Bank
        PO Box 30416
        Salt Lake City, UT 84130

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      Source: https://www.finder.com/discover-bank-cds

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