How Discover Cds Rates Compare To Other Banks
Discover offers some of the best CD rates in the industry. This is due to the banks lack of physical locations throughout the country which makes more room for higher-earning rates. As you can see below, Discovers rates come very close to those of other online banks like Ally Bank and . Plus, while Marcus rates are higher for longer-term accounts, Discover offers a better rate for the 6-month CD option.
At $2,500, Discover requires a higher minimum deposit than the other banks do. Marcus minimum comes in at $500. Ally doesnt have a minimum deposit requirement, allowing you to deposit whatever amounts you can. This means that if you can only put away $50 responsibly, Ally will let you do that. It is important to note that higher balances can get you better rates and earnings. The Ally Bank rates given below are for its High Yield CDs lowest tier.
Discover Certificate Of Deposit Account Summary
Discover Bank currently offers competitive rates. Discover Bank has always been one of the best places to open a CD account online. Their CD rates have consistently been very competitive for 12-month CDs, all the way up to 10-year CDs.
- Soft pull, which does not affect your credit
- Where its available: Online Nationwide
- How to earn it: Open a new Certificate of Deposit Account online and fund your account by making a minimum opening deposit of $2,500. Select your term and earn the corresponding APY Rate.
- Opening Deposit: $2,500 minimum
- Monthly fee: There are no monthly fees with this account
- Grace Period After Maturity : 9 days
- Early Withdrawal Penalty:
- CD Term: less than 1 year Penalty: 3 months simple interest
- CD Term: 1 year to less than 4 years Penalty: 6 months simple interest
- CD Term: 4 years to less than 5 years Penalty: 9 months simple interest
- CD Term: 5 years to less than 7 years Penalty: 18 months simple interest
- CD Term: 7 years to 10 years Penalty: 24 months simple interest
Earn a competitive APY Rate with a Discover CD account.
- No monthly fees
- Minimum balance requirement of just $2,500
- Flexible terms: 3 months to 10 years
- One of the highest rates available nationwide for a 10-Year term
- Daily compounded interest rate and credited monthly
- FDIC insured of up to $250,000
Need Your Money Early
Simple interest is calculated by multiplying the daily interest rate by your principal by the number of days that elapse between payments.
Beginning on the 8th day after your CD is opened and funded and for the next 22 calendar days, we will deduct each days simple interest on the issue amount withdrawn from the funding date to the date of withdrawal. Thereafter, the Early Withdrawal Penalty will be calculated as described in the chart below.
In some cases, the early withdrawal penalty may reduce the principal in the CD.
Early Withdrawal Penalties shown apply to new CDs.
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What Are Some Alternatives To A 10
For investors whose primary concern is preserving their principal, CDs are one of several options you can weigh. Online savings accounts typically offer yields that are much better than traditional banks, but slightly lower than certificates. They also are not locked or guaranteed they can change at any time. The upside is that you can add and withdraw money whenever you need to.
To add a little more growth potential to your investment, diversified bond funds are another idea. While there’s always a risk that bond returns could be negative from one year to the next, history suggests it’s highly unlikely you’d lose principal over an entire decadeespecially if you avoid high-yield, or “junk,” bonds. With bonds, there’s usually a trade-off between risk and reward the higher the quality of the note , the less return you’ll typically receive.
The stakes are always higher when you invest money over a long period of time, so it’s worth considering your options and choosing one with which you feel comfortable.
If you aren’t looking to lock your money up for a period of time and want easier access to it, you could look at opening a high-yield savings account as an alternative. Below are some savings account options from our partners which can be competitive with the rates you can earn on CDs. It should be noted that unlike a CD, where your rate is locked in, with a savings account the bank or credit union can change your rate at any time.
The Best Cd Rates For December 2022
When it comes to building up your savings, where you put your funds is half the battle.
A certificate of deposit is one of many types of savings vehicles you can consider. Commonly offered by banks and credit unions, CDs typically pay a higher interest rate than traditional savings accounts.
But there is a catch: Once you deposit funds into a CD, youre committing to keeping your hands off that money for a set amount of time. Withdrawing money from your account before that time is up could come with some hefty penaltiesmore on that later.
Choosing the right CD comes down to a few different factors. To help make your decision a little easier, the Fortune RecommendsTM editorial team ranked more than 40 CDs and came up with a list of our top 10 picks. We weighed minimum deposits to open an account, annual percentage yields for one-, three-, and five-year terms, compounding frequency, and customer service options. All rates listed are up to date as of Nov. 16, 2022.
How we chose our top picks: Our methodology
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Discover Bank Cd Rates
Are Cds A Good Investment
Timing matters. CDs can be a good investment if interest rates are currently high and/or expected to fall. The biggest benefit of a CD is your ability to lock in a fixed interest rate. If interest rates fall during the term of your CD, the APY on your CD will not be affected. Conversely, if rates are expected to rise, then it may not be a good time to put money in a CD.
Discover Bank: For The Tech
About: Discover is an online-only bank whose history stretches almost four decades. This bank offers all the perks of a traditional big bank, but with a digital-first approach. Consumers can benefit from Discovers wide range of financial products, including credit cards, personal loans, student loans, home loans, money market accounts, CDs, and more.
Key numbers 3-year CD APY: 4.15%5-year CD APY: 4.25%Penalty: For one- to five-year terms, the early withdrawal penalty is equal to 18 months simple interest.
Why we picked it: Discovers CD accounts had one of the highest minimum deposits on our list, but for consumers who may already be using Discover for its other banking services and want to keep all of their accounts in one place, this could be a viable banking option. Interest on these accounts is compounded daily and Discovers CD rates are over 19 times the average national savings rate. Discover doesnt have physical branches, but customers can contact a representative via phone or chat 24/7.
Sallie Mae Bank: For The Saver Who Thinks You Have To Spend Money To Make Money
About: Sallie Mae is an online bank that offers a wide range of savings, credit, and student loan products. Its CD terms range from six months to five years and consumers can do all of its banking online or via Sallie Maes mobile app.
Key numbers 3-year CD APY: 4.50%5-year CD APY: 4.55%Penalty: There is an early withdrawal penalty for withdrawing your funds before the CD reaches its maturity date. This can range from 90 to 180 days simple interest.
Why we picked it: Sallie Mae requires one of the highest minimum deposits on our list, but it rewards savers for the hefty deposit by offering competitive APYs and ditching monthly fees. Interest is also compounded dailywhich can quickly add up at the high rates Sallie Mae offersand can be left in your CD to automatically renew or it can be withdrawn penalty free. Customers can reach out to Sallie Mae via telephone Monday through Friday, 9 a.m. to 6 p.m. ET, or through its online chat function.
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How Should Someone Choose A Cd Term Length
Roger: Ma, CFP
“I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective.”
Mykail James, CFEI:
“I believe in having a plan for whatever the funds are. If it’s supposed to be a house fund, and you want to wait for another two years to buy a house, that’s what you should be thinking of when you want to have this money.”
Autumn Leaf Cd Special
*This Certificate of Deposit is Tiered. Tier One is $10,000.00 – $24,999.99 is a rate is 2.24% and APY of 2.25%. Tier 2 is $25,000.00 – $99,999.99 is a rate of 2.38% and APY of 2.40%. Tier 3 is $100,000.00 – $249,000.00 is a rate of 2.63% and APY of 2.65%. Opening balance and minimum daily balance of $10,000.00 required. You may not make additional deposits in to this account. You may not deposit more than $248,000.00 in to this account. If the account is closed before interest is credited, you will not receive the accrued interest. The penalty for early withdrawal is 180 days interest on the amount of money withdrawn. This account will automatically renew. You will have 10 days after the maturity date to withdraw funds without penalty. This account will automatically renew for a term of 12 months. The renewal rate will be the 12 month rate in effect on the date of maturity. If you do not withdraw the funds, each renewal term hereafter will be for 12 months. Interest will be compounded semi-annually and again at maturity. Once the CD has renewed into the 12 month term, interest will be paid semi-annually by the same option as the original term. If you withdraw the funds during the 10 day grace period, no interest will be paid past the date of maturity. Public Funds, Brokered Deposits, Financial Institutions, IOLTA and COLTAF are not eligible for this special.
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How Should Someone Decide Whether To Put Their Money In A High
Tania Brown, CFP:
“So I guess we’ll start off with how much money you want to put in and the level of transactions you want to have. If you want to have any transactions, that automatically takes out CDs. Then you’re stuck between the high-yield savings and the money market account.”
Laura Grace Tarpley, Personal Finance Insider:
“I would use a high-yield savings account or money market account for short-term goals or an emergency fund. You’ll probably want to choose whichever has a higher rate, but money market accounts can be good for emergency savings because they often come with a debit card or paper checks, making it easy to access money quickly. Then use CDs for longer-term goals, like buying a home in a few years.”
How Do Early Withdrawal Penalties Work
Banks and credit unions often penalize you for withdrawing funds from a CD before the term is up. In many cases, they calculate the penalty as a certain number of months worth of interest. For example, Discover Bank charges six months worth of interest if you pull out of a 1-year CD early. That penalty increases to 18 months worth of interest on 5-year CDs.
Paying a penalty is never fun, and it can be particularly problematic when you cash out early in the term. Depending on how long your money stays in a CD, you might even receive less back than you originally deposited.
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Other Discover Accounts To Consider
Discover Online SavingsDiscover Money MarketDiscover IRA Certificate of Deposit
|Open a Discover Online Savings Account for all these features: Earn $200/$150 Bonus with promo code HMB922 by 12/15/2022 Earn high interest rate of 3.00% APY No minimum opening deposit, no minimum balance requirement, and now no fees Interest on Discover Online Savings Accounts is compounded daily and credited monthly Manage your account online or with the Discover mobile app FDIC insurance up to $250,000 See advertiser website for full detailsTo get your $150 or $200 Bonus: What to do: Apply for your first Discover Online Savings Account, online, in the Discover App or by phone. Enter Offer Code HMB922 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted to account within 30 days of account open date. Maximum bonus eligibility is $200.|
Overview Of Discover Cds
With 12 available CD terms, Discover allows you to open an account for a variety of financial goals whether long term or short term. This also makes for a perfect CD ladder structure. A CD ladder is when you open multiple CD accounts at the same time, each with a different maturity date. That way, you can have a payout every few months or so, depending on the ladder you create.
You will need at least $2,500 to open a Discover CD account. Again, this is pretty high when compared to other banks minimums. However, it does yield larger earnings over time, especially with Discovers strong CD interest rates.
Its important to remember that CDs are timed deposits. You can only access the funds youve deposited into the account when it reaches maturity. Once it matures, you have a nine-day grace period to make any withdrawals or additional deposits you want. Before that, however, an early withdrawal can trigger a penalty.
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How Much You Earn With Discover Certificate Of Deposits Over Time
You stand to earn the most with Discovers longer-term CDs. Youll see below that with a 3-month CD, youll only earn a few dollars on your deposit at the end of the term. With a longer term, however, like 12 or 60 months would see growth of hundreds of dollars. Again, this depends on your initial deposit, too.
Discover does boost your growth by compounding interest daily. This grows your money faster and more efficiently than monthly compounding, for example. Daily compounding means your deposit will earn interest today, that new amount will earn interest tomorrow and so on. The amounts below reflect your possible final earnings at the end of each account’s term.
Earn The Highest Interest Rates On Savings Today
Fixed annuities are almost identical to Certificates of Deposit accounts and provide higher interest rates and penalty-free withdrawals for income.
Disclaimer: This is a review. The Annuity Expert is not associated with a bank or credit union. However, fixed annuities are sold at most financial institutions. We aim to help you find the highest interest rates for your retirement savings. We may receive a small referral fee if you purchase something using a link in this article.
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Bread Savings: For The Saver Who Isnt New To The Savings Game
About: Bread savings, formerly Comenity Direct Bank, is an online-only bank that offers CDs ranging from one to five years, as well as a high-yield savings account.
Key numbers 3-year CD APY: 4.50%5-year CD APY: 4.75%Penalty: Early withdrawal penalties do apply for Breads CD accounts. For terms shorter than one year, the penalty is 90 days simple interest. For one to three-year terms, the penalty is 180 days simple interest. For terms greater than four years, the penalty is 365 days simple interest.
Why we picked it: While its opening deposit is above $1,000, Bread Savings offers its customers competitive APYs on its one-, three-, and five-year CDs, plusaccrued interest is compounded daily. Account holders are not charged for certain CD services like ACH transfers, monthly maintenance, and incoming wire transfers, but will be charged $25 for outgoing wire transfers, $15 for official check requests, and $5 paper statement fees. Customers can bank with Bread online or via its mobile app. For assistance, they can connect with a Bread Savings customer service representative via telephone on weekdays between 7 a.m. and 9 p.m. CT, and weekends and most holidays from 9 a.m. to 5 p.m. CT.
Which Do You Think Is Best
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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
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