Discover IRA Review

Discover Traditional IRA, Roth IRA, Rollover IRA (individual retirement accounts) review. Discover IRA CDs fees. Is Discover IRA good and safe way to invest?

Discover IRA Accounts Offered
  • Traditional IRA
  • Roth IRA
  • Rollover IRA

Discover ROTH/Traditional IRA Accounts Fees

  • IRA setup fee: $0
  • Annual IRA fee: $0
  • IRA termination Fee: $0

Discover Bank IRA CDs

For those investors who are risk averse, or looking to put their money in to some of the safest investment vehicles possible, Certificates of Deposit (CDs) are a great option. Building an IRA with a CD account has many great advantages, from being tax exempt to being insured by the FDIC.

Discover Bank launched in 1986 and has been a reliable and well-trusted bank throughout the industry. Today they offer IRA accounts for CDs that compare favorably to their competitors.

What is a CD?

A Certificate of Deposit, or CD, is a common savings product offered by banks and other financial institutions. A CD is similar to a typical savings account in that they are insured by the FDIC and essentially risk free. The difference is the deposit within a CD is locked in for a specified time period, generally between 3 months and 10 years, which returns a set interest rate. This makes a CD highly illiquid, however in return they generally return a higher interest rate than similar savings accounts.

IRA Choices

The two most widely used retirement accounts, Roth and Traditional IRAs, are available options through Discover. However, alternative retirement accounts that such as SEP or SIMPLE IRA plans are not available. This shouldn’t be a big deterrent as most investors are in search of opening the former two types of accounts.

Discover IRA Fees and Account Minimums

The minimum to open a CD account is $2,500 which is a bit steep for investors with very little capital. There are no fees associated with a CD retirement account, only the standard early withdrawal fees that generally accompany CD investments.

Discover IRA Interest Rates

Discover is notorious for having some of the best interest rate returns in the industry. Top Tier Quarterly voted Discover as a winner for consistently high CD and IRA CD yields in the industry. See the chart below for the Discover IRA CD interest rates:

Term APY Interest Rate
3 years2.75%
30 months2.70%
24 months2.70%
18 months2.65%
12 months2.65%
9 months0.70%
6 months0.65%
3 months0.35%


Discover's rates on IRA CDs are pretty good by industry standards. Consumer Credit Union Rewards Checking pays 4.09% APY on a completely liquid account. A certificate of deposit inside Wells Fargo pays only 1.45% APY on 12-months term; Bank of America is at just 0.40% APY and Citibank is at measly 0.25% APY for the same term.

No Penalty Withdrawal?

As with almost all CD investments, Discover does charge a substantial early withdrawal fee. However, they do offer a nice feature of a no penalty withdrawal if an investor loses his/her full-time job within the duration of the CD. This gives investors at least some sort of comfort that in hard times they will be able to withdraw their money penalty free.

Website Features - Interest Rate Calculator

The interest calculator is a nice tool to give investors an idea of how time and deposit amounts will change the return of an investment. By specifying a deposit amount and a time period, the calculator will compute the total return based on the current APY rate. Since CDs are FDIC insured and the rate is set at the time of deposit, this calculation shows an accurate figure which can be used before making any investment decisions. Discover’s rates are compared to the national average for CD, showing how much more of a return an investor will receive just from switching to Discover.

Customer Service

Being a traditional bank makes the customer service at Discover have its advantages and disadvantages. Phone support is available 24 hours a day, 7 days a week. On the flipside, it can take time before the investor can actually get on the phone with a support specialist, and when finally on the phone, investors may have to be transferred to another department as traditional support specialists are not necessarily trained on answering questions about retirement accounts and investments.

The Good

Great interest rates and round the clock customer support.

The Bad

A CD is the only investment option for this account, but that should be obvious based on the name.

Discover IRA Review Conclusion

As far as CDs go, the Discover IRA CD Account is at or near the top of its class. Discover’s interest rates are consistently high compared to industry standards and they are a reliable name that investors can trust.


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