Discover Cashback Debit Review - Earn Cash Bank on Debit Purchases

Overall Ranking

4.9/5

Overview

Account Fees

5/5

ATM Fees

4.9/5

Mobile Access

4.9/5

Customer Service

4.9/5

Additional Features

4.75/5

Best known for its industry-leading credit card Discover it® and some of the highest paying deposit accounts available, Discover also offers its Discover Cashback Debit Account. And it’s well worth checking out.

Kevin Mercadante

Editor's Note

You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted below.

Editorial Note: This offer is no longer available and/or has expired. Please visit Discover.com for the most up-to-date information.

About Discover Cashback Debit Account

Discover Bank is an online bank providing one of the most attractive checking account offers in the industry. With it you can earn cash back on debit card purchases, while paying no monthly fees. And though Discover has no physical bank branches, you can access your account at more than 60,000 no-fee ATMs across the country.

What’s more, Discover Cashback Debit Accounts have no minimum initial deposit or ongoing balance requirements.

Interested? Keep reading…

Features and Benefits

Cash Back Rewards on Debit Card Purchases

Discover will pay you 1% cash back on debit card purchases up to $3,000 per month (see website for details*). That will give you the potential to earn up to $30 in cash back each month, or $360 per year. It’s the kind of offer that’s typical with credit cards, but very unusual with debit cards. The Cashback Bonus can be redeemed as cash via a credit to your Discover debit, savings or money market account.

Important Benefit to Discover Credit Cardholders: Discover Cashback Debit Bonuses can be transferred to your Discover Credit Card Cashback Bonus Account in any amount.

Account Access at More Than 60,000 ATMs

Discover participates in one of the largest ATM networks in the country (Allpoint and MoneyPass). You can make cash withdrawals without paying a fee.

Online Bill Pay

You can pay bills online. Simply enroll in the program, and you can use the service to pay utilities, insurance premiums, loan payments, or even individuals, such as family and friends, your landlord, or contractors. They do however recommend against paying government agencies, like the IRS, or payees outside the U.S. Can be used to make one-time or recurring payments. There is no fee for the service.

Mobile Banking

The Discover Mobile App is available for Android, iPhone, and tablets. You can deposit checks using the Mobile Check Deposit Service, and pay bills using the Bill Payment Service. The mobile device can also be used to view your account activity, set up one-time or recurring transfers, contact customer service, redeem your cashback bonus, or find a no-fee ATM nearby.

How Discover Cashback Debit Works

Minimum deposit to open an account: $0

Minimum ongoing account balance: $0

Overdraft Protection

You can set up overdraft protection by linking a funding account to your debit account. This can include a Discover Money Market or Online Savings Account, or another Discover Cashback Debit Account. The service covers checks and electronic transfers, but not debit card purchases and ATM withdrawals. There is no fee for this service.

Discover Customer Service

You access customer service by toll-free phone 24 hours a day, seven days per week. Discover also has an extensive FAQs section that will answer most of your questions online.

Funds Availability

The first $200 of check deposits (mobile or mail) will be available the next business day. The remainder is typically available within two business days. ACH and wire transfers initiated at an external bank are available on the same business day funds are received.

Accessing Your Account

You can access your debit account through any of the following methods:

ATM
Writing a check
Use of your debit card anywhere the Discover, Diners Club International or Pulse logos appear
Choose additional cash over purchases when using the debit card at participating retailers
Online transfers to an external bank account
Making payments using online bill pay
Request an official bank check
By wire transfer

ACH transfers from your Discover account are usually available 4 business days from the date of the transfer request.

FDIC Insurance Coverage

Your account is covered for up to $250,000 per depositor.

Account Fees

As noted above, Discover Cashback Debit accounts have no monthly maintenance fee. There is also no fee for use at any of the more than 60,000 in-network ATMs across the country.

Discover Cashback Debit Accounts do have the following fees for a non-typical transaction:

Outgoing wire transfer, $30

Other services with no fee include:

Deposited item return
Stop payment
Insufficient funds
Debit card replacement
Ordering standard checks
Online bill pay
Account closure
Incoming wire transfers
Official bank checks
Paper copy of check or deposit item

What Discover Cashback Debit Offers that Other Banks Don’t

Discover is unique among major banks in offering cashback rewards on debit card purchases. This is particularly true in combination with no required minimum deposit or balance, no monthly maintenance fee, and an absence of many of the fees typically charged with bank checking accounts.

The closest offer is Bank of Internet USA. They offer 1% cashback on their debit card, but they require a minimum account balance of $1,500, and the offer is not available on purchases at common retailers, like grocery stores, superstores, wholesale stores and discount stores.

Otherwise, PayPal offers 1% cash back on purchases with their debit card. But PayPal isn’t a checking account, and charges fees of 3% or more for incoming deposits.

Now some banks do pay interest on their checking accounts. But at a high-end interest rate of 1.5%, you’d have to have an average monthly checking account balance of $24,000 to get the $360 that you can earn in cashback debit purchases with Discover.

There’s no question, this is one of the better checking account choices available. It’s especially good for consumers who are frequent debit card users, and don’t want their cash back rewards offset by bank fees. Discover Cashback Debit has no fees that can’t be easily avoided, so the cashback offer is a pure play.

Meanwhile, you can also transfer your debit account cashback balance to your Discover Card. That will offer you an opportunity to seriously supercharge your total cashback on that card (Discover it® Cash Back pays up to 5% on select purchases and 1% on everything else).

The entire account application process takes place online. You start by providing your physical address, phone number, email and either your Social Security number or other taxpayer ID.

Checks and your debit card can be ordered online or by phone, and will typically be received within 10 days of opening your account. Upon receipt of your debit card, you’ll need to activate the card and set up a personal identification number (PIN). That can be done either online or by phone.

Once your account has been opened, you’ll have up to 45 days to fund it. If funds are not received within 45 days, you’ll have to complete a new application.

There are four ways you can make deposits:

By direct deposit
Online transfer from another bank account
By Mobile Check Deposit from the Mobile App

Pros and Cons of Discover Cashback Debit

1% cash back on debit card purchases of up to $3,000 per month ($30 in cash back)
No minimum initial deposit or account balance requirement
Access your account fee-free at more than 60,000 ATM
No monthly fees on your account or fee for replacement debit card or check reorder
Availability of high interest savings, money market and CDs through Discover Bank

No interest is paid on your checking account balance
No physical bank branch locations
You can’t deposit cash in your account
You are only permitted to have one Cashback Debit Account

In one word, yes! At least if you’re a frequent debit card user, and you like the idea of a fee-free checking account. Even if you don’t make frequent use of your debit card, you’ll still be getting access to a truly free checking account.

A Discover Cashback Debit Account may not be terribly attractive to someone who typically maintains a very high checking account balance, and is more interested in a high-yield checking account. That will be even more true if you don’t make frequent use of your debit card.

But for everyone else, it’s an excellent way to get free checking with the ability to earn 1% cash back on debit purchases through normal spending activity.

For example, if you make at least $3,000 in debit card purchases each month, and earn the full $360 cashback for the year, that will be the equivalent of earning 36% interest on an average daily balance of $1,000, or 360% interest on an average daily balance of just $100.

Think of a Discover Cashback Debit Account as an opportunity for small savers to earn a super high rate of return on their money, driven completely by their spending activity. That’s one of the best deals available anywhere to most people.

Meanwhile, you’ll have access to the other products offered by Discover, including the Discover it® Credit Card, and their high-yielding savings accounts, money markets and certificates of deposit.

Disclosure – ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.