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?
- 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.
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:
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.
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.
Great interest rates and round the clock customer support.
A CD is the only investment option for this account, but that should be obvious based on the name.
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.
Article was updated on 1/22/2017.