Jenny Ellis
Discover Online Banking is a digital only bank, run by Discover Financial Services, that pays 3.30% APY on savings, charges no monthly fees, and gives debit card users 1% cash back on up to $3,000 in purchases a month. As of May 2025, though, Capital One owns Discover Bank and it no longer accepts new banking applicants.
What Happened to Discover Bank and Why It Matters Now
Capital One closed its acquisition of Discover Bank on May 18, 2025, a deal that instantly made Capital One the eighth largest bank in the country by the Federal Reserve's own reckoning and one of the largest payment processors in the United States. The Discover name survives. Anyone already holding a Discover credit card, checking account, savings account or CD can keep using it as before. What has changed is the front door: Discover is no longer opening banking accounts for new customers, so this review now functions mainly as a guide for existing account holders and for readers comparing history against today's alternatives.
That timing matters for anyone reading rate tables or fee schedules tied to Discover. The figures below reflect the bank's own published terms as of the dates noted, not a live, evergreen offer you can walk into today.
Where Discover Online Banking Still Stands Out
Before the acquisition changed its trajectory, Discover built a reputation on three things: cash back on debit spending, a genuine absence of fees, and a large ATM footprint despite having almost no physical branches.
- Debit card purchases earn 1% cash back on up to $3,000 spent per month, which works out to a possible $360 a year. ATM withdrawals, money orders, loan payments and peer to peer transfers made with the card do not qualify.
- The checking and savings accounts carry no monthly maintenance fee, no insufficient funds fee, no fee for returned items or stop payments, and no fee for closing the account.
- There is no minimum deposit required to open a checking account, a savings account or a CD.
- The debit card works at roughly 415,000 ATMs nationwide, and about 60,000 of those, part of the Allpoint and MoneyPass networks, charge no surcharge at all. Discover itself never charges its own ATM fee, though a machine outside those networks might tack on a charge from its owner.
The tradeoff for all that convenience is physical presence. Discover operates a single branch, located in Greenwood, Delaware. Anyone who wants face to face banking has never really been able to get it here, acquisition or not.
Checking, Savings and CDs: How the Numbers Compare
Discover's account lineup was always intentionally narrow: a checking account, a savings account, and certificates of deposit. No money market account, no dedicated wealth management arm attached to the banking division itself.
The checking account's main selling point is that cash back debit card, paired with free checks and zero minimum balance requirements. It is not a place to deposit cash, however. Discover, like most online only banks, only supports ATM withdrawals, not ATM deposits. Paper checks have to go through the mobile app or by mail to a processing center in Salt Lake City.
The savings account is just as fee free, and as of January 2026 pays 3.30% APY, well above the 0.40% national average savings rate tracked by the FDIC. There is no minimum to open or maintain it.
CDs are where the tradeoffs get more specific. Terms run from three months out to ten years, with no minimum deposit to open one. Here is how the rates broke down as of December 4, 2025:
| Term | APY |
|---|---|
| 3 Months | 2.00% |
| 6 Months | 3.50% |
| 9 Months | 3.50% |
| 12 Months | 3.90% |
| 18 Months | 3.75% |
| 24 Months | 3.60% |
| 30 Months | 3.60% |
| 36 Months | 3.60% |
| 48 Months | 3.60% |
| 60 Months | 3.60% |
| 7 Years | 3.60% |
| 10 Years | 3.60% |
Notice that the 12 month CD actually paid more than several longer terms, a reminder that longer is not automatically better when rates are shifting. Pulling money out early comes with a penalty scaled to the term length:
| Term | Early Withdrawal Fee |
|---|---|
| Less than 1 year | 3 months simple interest |
| 1 year to less than 4 years | 6 months simple interest |
| 4 years to less than 5 years | 9 months simple interest |
| 5 years to less than 7 years | 18 months simple interest |
| 7 years to less than 10 years | 24 months simple interest |
A CD has to stay open at least eight days before any withdrawal is allowed at all.
Credit Cards and Loans Sit Outside the Banking Division
It gets confusing here, since Discover's credit cards, technically issued through a separate arm of Discover Financial Services also called Discover Bank, are not part of Discover Online Banking. You do not need a checking or savings account with Discover to apply for one of its cards, and having one does not unlock any special banking perks.
The cash back lineup includes Discover it Cash Back, Discover it Chrome Gas and Restaurant, Discover it Chrome for Students, and the NHL branded Discover it card. Discover it Miles covers general travel rewards, and Discover it Secured Credit Card serves those building or rebuilding credit. None carry an annual fee.
Discover Financial Services also offers home equity loans, mortgage refinancing, personal loans, student loans and debt consolidation loans, again as separate products from the online bank itself.
Customer Service and the History Behind the Brand
Support runs 24 hours a day, 365 days a year, by phone at 1 to 800 to 347 to 2683, with representatives based in the United States, something the company has long emphasized in its marketing. Chat support is also available, and the mobile app handles check deposits and account monitoring.
Industry satisfaction surveys have generally ranked Discover well. In the J.D. Power 2024 U.S. Credit Card Satisfaction Study, Discover placed second among credit card issuers with a score of 629. The J.D. Power 2024 U.S. Banking Mobile App Satisfaction Study also put Discover second for online credit card satisfaction.
The company's history is not spotless. In 2012, Discover Financial Services paid $200 million to 3.5 million customers over deceptive practices, including enrolling people in payment protection plans without their consent. It also paid more than $14 million in civil fines, split between the Consumer Financial Protection Bureau's Civil Penalty Fund and the U.S. Treasury.
What Happens to Discover Accounts Now
For existing customers, day to day banking should look unchanged: same app, same debit card perks, same rates on savings and CDs subject to normal market adjustments. The open question is what Capital One's ownership means over the longer run, whether product terms, ATM networks or fee structures eventually shift to match Capital One's own banking lineup. Nothing announced so far suggests immediate changes to existing accounts, but anyone who valued Discover specifically for its no branch, no fee model should keep an eye on communications from the bank as the integration continues. New customers, meanwhile, will need to look at other online banks entirely, since Discover's doors are closed to new banking applicants for the foreseeable future.
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