Discover Bank Checking – A decent deal

October 11, 2014 at 11:19 am Leave a comment

If you are in the market for a new checking account, Discover Bank is actually offering a decent deal.

Through the end of October, they are offering new checking account users a $50 bonus.

What’s the catch, you ask?  I looked, and can’t find a real gotcha anywhere.

There’s no monthly fee.
They send you free checks.
Free on-line bill pay.
They PAY YOU for each transaction.

Like many other banks, they don’t pay interest on your checking balance, but the fact that every purchase you make with your debit card earns $0.10, as does each on-line bill pay, and each check you write…

Well, let’s see how that stacks up against my local credit union:

Last month, I earned only .30 on my credit union checking account.  During that month, I paid 12 bills via my credit unions on-line bill pay and wrote 14 checks.  If I were with Discover bank last month, with all those transactions, I would have earned $2.60.

Now, that’s not very much money, but it’s almost 9 times more than the interest I earned.  It would be much more if I used the debit cards to, say, buy lunch each day at work.  That alone would be about 20 more transactions per month.

Even if the number of checks I wrote was a bit on the high side last month, I could easily see me earning $2 a month more this way than from Interest, which would add up to about $24 a year in additional income.  I generally only buy new checks once every year or two, but the fact that they are free saves another $15-20.

Oh, and the $50 bonus is really nice too!  In fact, if I had looked into this before the attention getting “$50 bonus” promotion, I may have seriously thought about switching before now.

As for depositing money to your account, you can transfer from external accounts, do direct deposit, or use a mobile app to deposit checks from where ever you have an internet connection.  If you get a lot of cash (waitress or some other tip-based job), you’ll still need a local bank account to take those deposits.

Finally, the closest thing to a catch I could find…  The money you earn each month from your transactions doesn’t drop right into your checking account like interest would (that would be ideal).  Your “Checking Cashback Bonus” can be deposited in $20 increments as cash in your account, or transferred to a Discover card Cashback Bonus, if you also have a Discover card.  Since you can only do things with your bonus in $20 increments, why anyone would do anything other turn it into cash is beyond me.

Personally, I think my bonus will turn into cash in 6-8 months, perhaps less.  That will be much faster than the 67 months it would take (at $0.30 per month) to hit $20 in interest earnings.  If you are interested, you can go to discover.com and sign up.

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