Discover Cashback Debit Account Review: Fee-free Checking With Rewards
- 1% cash back
- Early Pay lets you receive your paycheck two days earlier
- No fees
- 24/7 customer service
- Broad, fee-free ATM network
- Limit of $360 cash back per year
- No brick-and-mortar branches
Discover Cashback Debit Account Overview
Discover’s online checking account is one of only a handful of financial service providers that offers a cash back debit card. Rated high on GOBankingRates’ list of The Best Checking Accounts, Discover’s fee-free checking account offers a host of benefits and perks.
Discover came onto the financial services scene back in 1986, when the company offered a cash back rewards credit card to compete with Mastercard and Visa offerings. Today, Discover provides full-fledged online banking, including an online savings account, Certificates of Deposit, IRAs and its fee-free online checking account with a cash back debit card.
Four factors were considered in evaluating the Discover Cashback Debit account.
While the market is virtually flooded with top cash back rewards credit cards, like Chase Freedom Unlimited and the Blue Cash Preferred Card from American Express, there are fewer choices in cash back debit cards.
Discover’s debit card offers 1% cash back on up to $3,000 in purchases per month, making it possible to accrue a grand total of $360 cash back per year.
Discover keeps it simple with its fee-free checking account. First, there’s no minimum deposit for the Discover checking account, and the company doesn’t charge any monthly service fees, overdraft fees or insufficient funds fees.
You can access your money through any one of 60,000 fee-free ATMs nationwide using your Discover Cashback Debit card. There’s also no fee if you need to reorder checks, pay bills online or acquire an official bank check. If you lose your debit card, Discover will offer expedited delivery of a new card for free.
In fact, the only fee associated with your Discover online checking account and cash back debit card is a $30 service charge for an outgoing wire transfer from your Discover online account.
However, you may be able to avoid ever using the wire transfer service by transferring money for free using Zelle, paying with Apple Pay or using your Discover debit card to earn cash back.
APY stands for Annual Percentage Yield, or the amount of money a checking or savings account pays in interest.
Exploring the APY for your Discover Cashback Debit card is a little different. In lieu of paying interest on the balance in your account, Discover offers 1% cash back — up to $360 per year — for every purchase you make using your debit card. If you tend not to hold a large balance in your bank account, this can work out to your benefit.
The 1% cash back also compares favorably to other banks that to pay interest on their checking accounts. Ally Bank, for instance, is an online only bank with a relatively high APY for checking accounts.
Discover is renowned for its U.S.-based, 24/7 customer service, which has been the focus of several advertising campaigns for the company over the years. Even though this is an online-only bank, you can still get the personalized service you expect.
It’s easy to call Discover for any reason, including technical support for the online banking services or to report fraud. Discover has several phone numbers listed on its website where you can call for help and speak to a human being.
How the Discover Cashback Debit Card Stands Out
With fee-free online banking, a vast network of 60,000 fee-free ATMs across the U.S. and 1% cash back on purchases when you use your Discover Cashback Debit card, it’s easy to see why Discover is a top-rated online bank.
If you max out your earnings, the 1% cash back exceeds the average interest you’d receive by keeping your money in a savings account. Meanwhile, you have immediate access to your funds to pay bills or make purchases.
Unlike some other banks with cash back debit card options, like Axos Bank, there is no minimum deposit required to open a Discover checking account.
Comparable Checking Account and Cash Back Debit Card Options
Although they aren’t common, some online and brick-and-mortar banks do offer cash back debit cards. Two standout choices include Axos Bank as an online-only choice and Bank of America’s cash back debit card through the bank’s BankAmeriDeals program.
Axos Bank v. Discover Cashback Debit
Axos Bank also ranked high on GoBankingRates’ Best Checking Accounts. Like Discover, Axos Bank is an online-only bank with no fees and no minimum balance requirements, although you will need at least $50 to open an account. Axos offers your first set of checks for free but does charge a fee for checks on subsequent orders.
Axos Bank’s cash back program offers up to $2,000 per month in cash back, but you must maintain a minimum $1,500 daily balance to earn 1% cash back. Otherwise, your earnings percentage drops to 0.50% for that month. Discover has no minimum to earn 1% cash back, making it a better choice if your balance tends to dip below $2,000 regularly.
Bank of America Cashback Debit Card vs. Discover Cashback Debit
As a traditional, brick-and-mortar bank, Bank of America Member FDIC may be a better choice for those who want an in-person banking solution. In fact, Bank of America has more than 4,200 retail banking centers around the world and a network of roughly 17,000 ATMs. This makes in-person and online banking easy with Bank of America.
However, there are multiple fees associated with a Bank of America checking account, including a monthly service fee that ranges from $4.95 up to $25 depending on the type of checking account you have. However, you can often get these fees waived. Bank of America also charges a $10 overdraft fee and a fee of $2.50 or more for using out-of-network ATMs.
But what about Bank of America’s cash back debit card? How does it stack up against Discover? Bank of America offers the BankAmeriDeals program to earn cash back when you pay with your debit card.
You’ll need to download the Bank of America app or log in to online banking to see the deals available. Choose the deals you want and the money you earn will be deposited into your account when you make a purchase using your Bank of America cash back debit or credit card.
You can earn up to 10% cash back or more with select Bank of America partners, but you do need to take the time to plan ahead and find the deals.
How To Apply
If you’ve decided you like Discover’s simple system for earning cash back and you’re ready to open your Discover online checking account, it’s easy to get started and there’s no impact on your credit score to apply or open an account. That’s because this card is a cash back debit card, not a credit card.
You can open an account over the phone by calling 800-347-7000 or simply visit Discover.com and click the orange button that says “Open an Account.”
Choose “Checking account” from the dropdown menu. You’ll need to download the Discover app to apply for a Cashback Debit account. You’ll also need to provide your social security number and your mother’s maiden name for security purposes.
Who the Discover Cashback Debit Card Is Best For
If you are looking for an online-only bank with a solid, longstanding reputation, exemplary customer service and no fees, the Discover Cashback Debit checking account could be the right choice for you.
If you prefer a brick-and-mortar bank, you may want to consider Bank of America or another larger bank.
With no fees for virtually anything, an easy-to-use and intuitive app, and easy 1% cash back each time you use your Discover debit card for up to $3,000 per month in purchases, the Discover Cashback Debit card and checking account is a great choice for your primary bank or as a secondary bank.
- Does Discover debit card have cash back?
- Yes, the Discover Cashback Debit card pays up to $360 per year in cash back, offering 1% cash back on all debit card purchases up to $3,000 per month.
- How do I put money on my Discover Cashback Debit card?
- Your Discover Cashback Debit card works with your Discover online checking account. To deposit funds into your online checking account, you can make a mobile check deposit, deposit cash at any of the 60,000 ATMs, or mail a check to Discover Bank.
- You can also add money to your account through an ACH transfer, direct deposit from an employer or through a wire transfer.
- How does cash back debit work?
- When you make a purchase using your Discover Cashback Debit card, you'll earn 1% cashback on that purchase, deposited into your Discover online checking account monthly. You can earn up to $360 per year.
Editorial Note: This content is not provided by Discover Bank. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Discover Bank.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.