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By
Micah Murray
Micah Murray
Contributor
Micah Murray is a freelance writer and editor for Newsweek’s personal finance team. He began writing about personal finance as a side hustle in 2018 and quit his full-time job in 2019 to dive headfirst into helping others build their financial literacy. Since then, he has written for various online publications, including Credible, ConsumerAffairs and the New York Post. Micah currently resides in Maine with his husband.
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Tanza Loudenback
Tanza Loudenback
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Tanza is a freelance editor for Newsweek. Her personal finance journey began at Business Insider, where she told inspiring stories of people achieving great financial success and taught millions of readers about the basics of money management. Since becoming a CERTIFIED FINANCIAL PLANNER in 2020, her expertise has deepened on taxes, insurance, investing, retirement planning and much more. Her longstanding goal is to empower every reader with accurate, clear and helpful information so they can make smart decisions with their money.
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When searching for your next checking account, considering all your options can help you ensure you get the most out of your new account. While national banks and credit unions might seem to be the most obvious places to look, some alternatives, such as Discover Bank, could better suit your needs.
Although Discover is best known for its credit card offerings, issuing credit cards to the public since 1986, it has expanded its offerings to include many other financial products. Now, it rivals traditional bank and credit union checking account options, especially with its online checking account: Discover Cashback Debit.
Our Methodology
Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
- Associated fees
- ATM access
- Balance requirements
- Customer service
- Interest-earning potential
Vault’s Viewpoint
- Discover Cashback Debit is a checking account that is managed entirely online.
- The account does not earn interest but provides 1% cash back on up to $3,000 each month.
- Discover Cashback Debit is mostly fee-free, but charges $30 per outgoing wire transfer.
Discover Checking Account Options
Discover Cashback Debit
Vault Verified
APY
None, this account doesn’t earn interest
Monthly Service Fee
$0
Minimum Balance
$0
Expert Take
Discover offers several banking options, but only one checking account option: Discover Cashback Debit. This account can be managed, like all of the bank’s products, entirely online. In lieu of interest, a Discover online checking account provides cash back rewards and is fee-free.
Pros
- Earn 1% cash back on up to $3,000 in purchases each month
- Enjoy a fee-free account, including no monthly fees or insufficient funds fees
- Early pay allows you to access qualifying ACH payments up to two days early
- Eligible for overdraft protection
- Withdraw cash fee-free at over 60,000 Discover ATMs
- Apply for the account online in minutes
Cons
- Doesn’t earn interest on balances
- Cash back rewards are only accrued on amounts up to $3,000 each month
- You must visit a Walmart location to deposit cash into your account
Who Is This Best For?
Discover Cashback Debit is best for current Discover customers who are looking to expand their banking relationship with Discover. Those looking for a simple online checking account without all the bells and whistles will also enjoy this account, which offers an easy-to-understand rewards program and virtually no fees.
That said, this account isn’t best suited for people who prefer in-person banking, since Discover doesn’t have physical branches. Additionally, Discover isn’t a high-yield checking account, so those hoping to earn interest on the balance in their account may want to look elsewhere.
Discover Checking Account Features and Benefits
Although it might seem simple on its surface, Discover Cashback Debit advertises a robust list of features for you to take advantage of, including:
- 1% cash back on up to $3,000 in purchases made with a Discover Cashback Debit card
- Cash back does not expire, unless the account is closed
- Access your direct deposits up to two days early with Early Pay
- Fee-free overdraft to those who opt-in
- A network of over 60,000 fee-free ATMs across the U.S.
- The Discover Mobile App lets you manage your account, find ATMs and more straight from your mobile device
- Chip and contactless payment-enabled debit cards let you securely make payments anywhere chip or contactless payments are accepted
- Zelle integration lets you send and receive money in minutes from the Discover Mobile App
- Mobile check deposit lets you deposit money into your account by simply taking photos of a check and uploading it to the Discover Mobile App
- Deposit cash into your account at any Walmart location across the U.S.
- Debit card freeze allows you to freeze and unfreeze your card whenever you need to, such as when it is lost or stolen, preventing any new purchases until you unfreeze the card
- Auto Redemption allows you to set your cash back rewards to automatically be deposited into your savings account, letting you grow your savings just by spending on your debit card
- Online Privacy Protection services can help you remove your personal information from certain people-search sites
- Online Bill Pay allows you to pay your bill at many different companies from your Discover account with no fee
Fees
Discover Cashback Debit stands out against other checking accounts, charging practically no fees. Specifically, Discover advertises that account holders won’t be charged the following account-related fees:
- Monthly service fees
- Insufficient funds fees
- Bank check fees
- Expedited delivery fees on replacement debit cards
- Check re-order fees
The only fee that the Discover Cashback Debit account requires accountholders to pay is a $30 service charge per outgoing wire transfer.
Alternatives to Discover Checking Accounts
Discover Cashback Debit vs American Express Rewards Checking
Like Discover, American Express is best known for its credit card selection but offers a variety of banking products. Its American Express Rewards Checking is similar to Discover Cashback Debit, with no monthly fees, no minimum to open an account and rewards on eligible debit card purchases. However, American Express Rewards Checking accrues 1% APY while Discover Cashback Debit doesn’t accrue any interest.
Unlike the American Express Rewards Checking account, you don’t need to have a current credit card account with the company to qualify for Discover Cashback Debit.
Discover Cashback Debit vs Ally Bank Spending Account
The Discover Cashback Debit and Ally Bank Spending Account are similar, with minimal fees and early direct deposit available, but these two accounts have key differences. For instance, the Ally Bank Spending Account doesn’t offer cash back like the Discover Cashback Debit.
However, unlike the Discover Cashback Debit, Ally offers a 0.25% APY and a useful feature called savings buckets. Savings buckets allow you to set money aside within your account for recurring expenses like rent and gas.
Ally doesn’t allow you to deposit cash into your Ally Bank Spending Account, while Discover which lets you deposit cash at any Walmart location.
Discover Cashback Debit vs Axos Bank Rewards Checking
Like Discover Cashback Debit, Axos Bank Rewards Checking has minimal fees, including no overdraft fee, monthly service fee or minimum balance fee. That said, Axos sets itself apart from Discover with an impressive APY offering of up to 3.30%.
Plus, Axos Bank rewards new account holders with an intro bonus of $300 when they use a promo code to apply for the account and meet funding and balance maintenance requirements.
Frequently Asked Questions
What Is the Cash Back Limit on Discover Debit Cards?
Discover Cashback Debit limits your cash back earning potential to 1% of $3,000 in eligible Discover debit card purchases each month. This means that the maximum amount of cash back you can earn is $30 per month or $360 per year.
Does Discover Charge Debit Card Overdraft Fees?
No, Discover doesn’t charge debit card overdraft fees. However, you’ll need to enroll in overdraft protection to be covered. To do this, you’ll be required to designate a different bank account as a funding account in case an overdraft happens.
Can I Deposit Cash Into My Discover Cashback Debit?
To deposit cash into your Discover Cashback Debit account you can visit any Walmart location in the U.S. and use Discover’s “Add Cash” feature. Doing so is free but you’ll be required to deposit a minimum of $20.
Is Discover Bank a Real Bank?
Yes, Discover Bank is a real bank and it is insured by the Federal Deposit Insurance Corporation (FDIC). Unlike many traditional banks, Discover doesn’t have physical branches and instead operates entirely online. You can access your account via your computer or mobile device, both through Discover’s website and mobile app.
Related Articles
- Discover Bank 2024 Review
- Best Checking Accounts of April 2024
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
Micah Murray
Contributor
Micah Murray is a freelance writer and editor for Newsweek’s personal finance team. He began writing about personal finance as a side hustle in 2018 and quit his full-time job in 2019 to dive headfirst into helping others build their financial literacy. Since then, he has written for various online publications, including Credible, ConsumerAffairs and the New York Post. Micah currently resides in Maine with his husband.
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