Discover CD Rates (February 2025) (original) (raw)
The MarketWatch Guides team looks at Discover’s certificate of deposit (CD) rates and how they have moved over time, by tracking annual percentage yield (APY) changes within the last 90 days.
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Discover CD Rates
Discover offers a wide range of term lengths, allowing you to earn a fixed interest rate for up to 10 years.
| Discover Bank CD | APY* | Changes Over Last Quarter |
|---|---|---|
| 3-month CD | 2.00% | 1 time |
| 6-month CD | 3.70% | 1 time |
| 9-month CD | 3.80% | 1 time |
| 1-year CD | 4.00% | 9 times |
| 18-month CD | 4.00% | 2 times |
| 2-year CD | 4.10% | 3 times |
| 30-month CD | 3.50% | 2 times |
| 3-year CD | 3.50% | 2 times |
| 4-year CD | 3.50% | 2 times |
| 5-year CD | 3.50% | 2 times |
| 7-year CD | 3.50% | 2 times |
| 10-year CD | 3.50% | 2 times |
*APY accurate as of February 6, 2025.
Discover CD Rates vs. Other Top Banks
Discover’s CD rates are generally competitive with the best CD rates available. However, if you’re specifically looking for a one-year CD, you may be able to find a higher rate elsewhere. For instance, Capital One typically offers a better rate for this term.
*APY accurate as of February 6, 2025. Rates may vary by location.
What Stands Out About Discover
Here are a couple of standout features of Discover CDs:
Best Rate Guarantee
One of Discover’s most noteworthy features is its best rate guarantee. If you fund your CD within 10 days of submitting your application, you’ll receive the highest interest rate available for your term at that time.
Let’s say you open a Discover CD with a 3.75% APY, but you wait to fund it. A few days later, the rate increases to 4.00%. If you fund your CD five days after submitting your application, in this example, Discover will honor the 4.00% APY. While you’ll have 45 days to fund your CD after opening, you can’t get a higher rate if you fund your account after 10 days.
Interest Disbursements
You can withdraw interest from your Discover CD without facing an early withdrawal penalty and transfer it to an eligible Discover account or request the funds to be sent via an official bank check.
Is Now the Right Time for a Discover CD?
Now could be a good time to open a Discover CD as rates remain fairly high. With the federal funds rate expected to drop in 2024, we may start seeing lower CD rates later this year, pros say.
How Much Can I Earn with a Discover CD?
If you deposit the minimum required deposit of 0andchoosetheshortestthree−monthtermwith2.000 and choose the shortest three-month term with 2.00% APY, your total deposit value at close would be 0andchoosetheshortestthree−monthtermwith2.002,512.53.
However, if you deposit more than the initial minimum required deposit and choose a longer term, you could earn thousands in interest. How much you can earn with a Discover CD depends on your deposit amount, CD term and rate. The longer a CD’s term is, and the higher the rate, the more you’ll earn. Either way, you’re guaranteed a return.
| Discover CD | APY* | Total Value of a $10,000 CD at Term End |
|---|---|---|
| 3-month CD | 2.00% | $10,050.12 |
| 6-month CD | 3.70% | $10,186.71 |
| 9-month CD | 3.80% | $10,289.08 |
| 1-year CD | 4.00% | $10,408.08 |
| 18-month CD | 4.00% | $10,618.33 |
| 2-year CD | 4.10% | $10,854.51 |
| 30-month CD | 3.50% | $10,914.38 |
| 3-year CD | 3.50% | $11,107.05 |
| 4-year CD | 3.50% | $11,502.66 |
| 5-year CD | 3.50% | $11,912.36 |
| 7-year CD | 3.50% | $12,776.06 |
| 10-year CD | 3.50% | $14,190.44 |
*APY accurate as of February 6, 2025.
If you plan to deposit a different amount into a Discover CD, use our CD calculator to see your potential earnings.
Discover CD Compounding
Discover’s interest compounds daily, growing earnings quicker than CDs with interest compounding monthly.
Recent News About Discover CD Rates
We reached out to Discover’s vice president and chief marketing officer of deposits business, Ram Subramanian, for an inside look at rate speculation and asked if Discover’s CD rates will rise, fall or stay the same in 2024.
“It’s hard to predict the overall rate environment, and we do keep a very close eye on these changes to determine our approach. There is general speculation that the Fed will start lowering rates in the not-too-distant future. Because of this prediction, it is a good time to consider getting a CD because then your money would be locked in at a higher rate for the entire life of the CD.”
Ram Subramanian Vice President and Chief Marketing Officer of Deposits Business Discover Bank
Discover CDs: Additional Information
Although Discover’s CDs are relatively straightforward, there are potential penalties and features to consider before deciding if an account is right for you.
Requirements
There is no minimum deposit to open a Discover CD, and you’ll have 45 days to fund your CD from the date you apply for the account.
Term Range
Discover’s CD term lengths range from three months to 10 years, which is an unusually wide range compared to other top banks.
Early Withdrawal Penalty
If you withdraw any of your principal deposit before your CD’s maturity date, you’ll face an early withdrawal penalty of several months of forfeited interest earnings. Discover’s early withdrawal penalties are on par with what other banks charge. Note that Discover doesn’t charge an early withdrawal penalty for withdrawing interest.
| CD Term | Early Withdrawal Penalty |
|---|---|
| Less than 1 year | 3 months of simple interest |
| 1 year to less than 4 years | 6 months of simple interest |
| 4 years to less than 5 years | 9 months of simple interest |
| 5 years to less than 7 years | 18 months of simple interest |
| 7 years or more | 24 months of simple interest |
End-of-Term Options
You’ll receive a notice 30 days before your CD term ends. After the term ends, you’ll have a nine-day grace period to withdraw funds, deposit more funds or renew your CD. If you don’t take action, your CD will automatically renew.
Is There a Catch to Discover CDs?
Some banks provide additional benefits beyond competitive CD rates. For example, Ally Bank offers a loyalty bonus for renewing your CD. We called Discover to see if it offers any additional benefits with its CDs. The representative said there are no bonuses or special features offered when opening a CD with Discover.
Also, it’s worth noting that Discover Bank narrowly avoided a fine from the Federal Deposit Insurance Corp. (FDIC) in 2023. The fine was over alleged compliance shortcomings and failures to establish and maintain a compliance management system that complies with consumer financial protection laws. The alleged concerns, which Discover did not confirm or deny, led to an overhaul in management systems and third-party risk management deficiencies. Discover avoided the fine by agreeing to a consent order with the FDIC.
“We have been working closely with the FDIC regarding the previously disclosed consent order and are committed to ensuring all requirements of the consent order are met,” an October 2023 statement said. “Discover continues to enhance its corporate governance and enterprise risk management practices and has taken significant steps to address the issues identified.”
>> Related: Learn more about the best CD rates
Other Discover Deposit Accounts
In addition to CDs, Discover offers one checking account, one savings account and one money market account, all of which provide easy access to your funds without term requirements.
Discover Checking Account
Discover’s checking account offers 1% cash back on up to $3,000 in debit card purchases each month — a rare feature for a checking account. You’ll get access to over 60,000 ATMs without fees, along with early direct deposit, overdraft protection and Zelle. This account also has no monthly, debit card replacement or insufficient funds fees.
Discover Online Savings Account
Discover has a competitive 3.75% APY on its savings account, much higher than the FDIC’s national average savings rate of 0.46%. The account has no minimum deposit requirement or monthly fees. Just like Discover’s CDs, interest compounds daily, which yields a slightly higher return than interest that compounds monthly.
>> Related: Learn more about the best high-yield savings accounts
Discover Money Market Account
Discover’s money market account offers a competitive APY on balances under 100,000,whilebalancesover100,000, while balances over 100,000,whilebalancesover100,000 earn a slightly higher rate. Similar to a checking account, you’ll get access to a debit card, paper checks and free ATMs. This account has no fees for monthly maintenance or excessive withdrawals, and there’s no minimum opening deposit requirement.
FAQ: CD Rates at Discover Bank
While the best CD rates frequently change, the highest-paying CDs are mostly from credit unions and online banks. Check out our list of the banks paying the highest CD rates today, with the top rates ranging from 4% to over 5%.
There is no minimum deposit amount to open a CD with Discover Bank. This is a lower amount than what many other financial institutions require. Many banks offer CDs with a $1,000 minimum deposit, whereas some banks have no minimum requirement.
A Discover CD could be worth it, depending on your financial plan and liquidity needs. If you’re looking to earn a competitive, fixed rate and if you’re willing to leave the funds untouched for a specific period of time — a Discover CD could help you meet your financial goals.