discover account

Cash back perks
Discover Bank offers checking customers a cashback rewards system rather than the interest-bearing accounts of Ally and Capital One. With a Discover debit card, you can earn 1% cash back each month on up to $3,000 in qualifying purchases. You’ll be able to earn up to $360 per year. By comparison, at Ally’s highest interest rate, you’d need $60,000 in your checking account to earn $360 annually (and you’d need at least $50,000 with Capital One).

Foreign transactions and transfers
Discover won’t charge you a foreign transaction fee if you use your card at a participating location in Canada, Mexico, and the Caribbean. Like Capital One and Ally, Discover doesn’t charge a fee if you receive a wire transfer in U.S. currency from a bank overseas — but Discover also doesn’t limit you to incoming international wire transfers — it actually allows you to initiate them (for a $30 price tag). So if you have financial obligations overseas, Discover has you covered.

Fee forgiveness
There’s no need to fret over your first experience overdrawing your account or needing a stop payment — Discover will waive your first fee. Plus, if you happen to lose your debit card or need more checks, Discover won’t charge you for those either. Knowing you have a slight buffer after opening your account might help incentivize healthy account behaviors for the future, and we appreciate the leniency.

Points to consider
Overdraft protection
Even though Discover’s NSF fee is only slightly more expensive than Ally’s — $30 compared to $25 — Discover Bank’s greatest downside is its overdraft protection policy. If you opt into overdraft protection, you’ll need to have a linked savings or money market account to transfer available funds. But Discover will only transfer funds if an externally-initiated transfer or bill payment causes the overdraft. If you set your bills to auto-pay and one of them causes an overdraft, for example, that overdraft will be covered. However, if you go to an ATM or use your debit card and cause an overdraft, Discover’s protection policy will not help, and you’ll be charged an NSF fee. If you don’t normally keep a lot of cash in your checking account, this means you might have to keep a closer eye on your checking account after bills have been processed.