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Discover Bank Online Money Market Account Review 2024
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Discover: The Company
Discover is a well-known company that provides a variety of financial services, ranging from bank accounts to CDs to IRAs. Discover is best known for the credit card
business they started in the 1980s. Since then, Discover has been slowly expanding the types of financial accounts they offer. This article will focus on Discover’s
relatively new money market account offering while giving brief summaries of some other options. What is a money market account? What’s the deal with Discover’s money
market account? Keep reading to find out.
What is a Money Market Account?
Before launching in to a review of Discover’s money market account, it would be beneficial to have an understanding of what, exactly, a money market account is.
A money market account is most similar to a traditional savings account, but with a few differences. The main, and best known, difference is that money market accounts typically have a better interest rate when compared to traditional savings accounts. The (usually) higher interest rate is because money market accounts track the prevailing rate on the “money markets”. Vanguard’s money market fund has the ticker symbol VMMXX, if readers are interested in seeing the current rate. The rates for money market savings accounts are generally lower than those in the mutual funds because the savings accounts carry no risk. This higher rate comes at a tradeoff however, as money market accounts typically have higher minimum balance requirements than savings accounts.
On average, money market accounts offer a 0.04% higher interest rate when compared to a savings account. While a higher interest rate is always welcome, the average minimum balance is a whopping $8,000 higher for money market accounts.
Account holders are still able to deposit and withdrawal money as they would in a traditional savings account. Another similarity between savings and money market accounts is that they are both insured by the FDIC (Federal Insurance Deposit Corporation).
Opening A Money Market Account With Discover
Opening a money market account at Discover is extremely easy. As seen in the picture above, a prospective customer only needs to provide four items: a home address, taxpayer identification, contact information, and bank routing and account numbers. This is all done through a intuitive online enrolment process. Discover makes this process even simpler for existing customers, who have the option to link an existing account and prepopulate a lot of the information.
There are very few restrictions to open a Discover Money Market account. The two major restrictions are that an account holder must be at least eighteen years old and maintain a balance of at least $2,500 in the account.
Website Layout
Discover’s website has improved in leaps and bounds within the last few years. The newest iteration is very modern and user friendly. The main account page shows users all of the information they’d want to know on a frequent basis; including the account balance, interest earned, recent transactions, and prevailing interest rate.
Navigating away from the main page is a breeze, too. Discover has very straightforward and simple to use toolbars at the top of every page. This is especially refreshing because many online financial institutions have somewhat convoluted navigation bars that are a hassle for new users. These bars allow users to view messages, update account options, view other linked accounts (if they have any), and get more info on recent statements.
On top of this fantastic website, Discover also offers quite a few other features that will be gone over in the next section.
Discover offers many different features for their account holders. One of the most useful is their broad ATM network. Discover has partnered with not one, but two, major ATM networks, allowing account holders to access over 60,000 ATMs nation wide for free. This is a wonderful perk and it is likely to be used by almost every account holder.
Another set of unique features offered by the team at Discover is their calculators. These calculators help users figure out interest rates, how much the user should save to reach certain goals, and more. Yet another added perk is that Discover Bank earned Bankrate.com’s 5 star “Safe and Sound” rating for financial security and stability
Rates (pictured to the right) are, unfortunately, where Discover’s money market account falls behind the rest of the pack. With many online banks offering no-minimum savings accounts with .90% to 1.05% interest rates, it’s hard to see why someone would pick this over others. Discover’s own online savings account currently offers a .90% interest rate.
Discover Bank Online Savings Account Review Summary
Overall, Discover’s online money market account offers a ton of great features at the cost of a competitive interest rate. They have a fantastic ATM network,
allowing account holders to withdrawal money quickly and easily. Account owners can rest easy knowing that Discover Bank is a highly rated and very secure company,
insured by the FDIC. Discover’s updated and modern website gives account holders an easy way to check up on their account and watch their money grow, day or night.
Unfortunately, the “watch their money grow” part is the problem. The rate offered by their money market account is a very unappealing 0.75%. Discover’s own online
savings account currently has a fairly competitive 0.95% interest rate.
It’s hard to recommend that anyone open a Discover money market account with the low rates and required $2,500 minimum balance when there are better options on
the market. If someone really wants an account with Discover, they can open a superior Discover online savings account just as easily.
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