Banking » Compare Banks » Ally vs Discover: Which Offers Better CD Rates?
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Ally vs Discover: Which Offers Better CD Rates?

You can get competitive rates with both Ally and Discover CDs. Compare rates, minimum deposits, and early withdrawal penalties.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Interest Rates Last Update: September 20, 2023
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Interest Rates Last Update: November 1, 2023

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

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Table Of Content

Certificates of Deposit (CDs) are a popular way for savers to earn interest on their money while keeping it safe and secure. Two of the top choices for online banking and CD options are Ally Bank and Discover. While both banks offer competitive rates and flexible terms, there are some notable differences between the two.

In this article, we'll take a closer look at the CDs offered by Ally Bank and Discover, comparing rates, minimum deposits, early withdrawal penalties, and other features to help you decide which bank's CDs are right for you.

Ally
Discover
CD Range
3.00% – 5.15%
2.00% – 5.20%
Minimum Deposit
$0
$2,500
Early Withdrawal penalty
60-150 days of interest
3-24 months of interest
Terms
3 – 60 months
3 – 120 months

How Do CD Rates Compare?

The CD rates battle between Ally and Discover has no clear winner.

While Ally CD rates are slightly better for the short term, if you compare long-term CD rates – Discover is the winner, so it mainly depends on your chosen term. Both offer very competitive rates compared to other online banks or credit unions.

Discover terms are more diverse, and there are many more options for investors than the terms offered by Ally Bank.

CD Term
Discover APY
Ally APY
3 Months
2.00%
3.00%
6 Months
3.40%
3.50%
9 Months
3.50%
5.00%
12 Months
5.20%
5.00%
18 Months
5.00%
5.15%
24 Months
4.40%
N/A
30 Months
4.30%
N/A
36 Months
4.30%
4.25%
48 Months
4.00%
N/A
60 Months
4.00%
4.10%
120 Months
4.00%
N/A

The Top Choice for Flexible CDs: Ally's No Penalty Option

Unlike traditional CDs, which typically impose a penalty for early withdrawal, Ally's No Penalty CD allows customers to withdraw their funds without penalty at any time after the first six days of opening the account.

The rate is one of the highest in the market for no penalty CD, makes it a great choice for many investors.

CD Term
APY
Ally Bank 11 Months – No Penalty
4.55%

A Closer Look at Ally and Discover CDs

If you're looking for a reliable and competitive option for a CD, both Ally Bank and Discover are worth considering. Ally's High Yield CDs offer terms ranging from three months to five years, with a focus on longer terms. However, if you need to withdraw funds early, you'll face a penalty that varies based on the term of your CD.

On the other hand, Discover CDs require a minimum deposit of $2,500 and offer terms ranging from three months to ten years, with rates varying depending on the selected term. While Discover CD rates are competitive, Discover doesn't offer a no-penalty CD, so early withdrawals will result in a penalty.

Overall, Ally's High Yield CDs offer flexibility with terms and competitive rates, but you'll need to be prepared for potential penalties if you need to withdraw funds early. Meanwhile, Discover's CDs offer a range of terms and competitive rates, but you'll need to commit to the selected term since early withdrawals come with penalties.

Compare CD Early Withdrawal Penalty

Ally emerges as the champion when it comes to early withdrawal penalties.

Compared to Discover penalties, Ally imposes better conditions across all its CD offerings, making it one of the most flexible options available. In fact, Ally stands out as a top choice for CDs due to its extremely low penalty fees.

CD Term
Discover
Ally
3 Months
3 months of interest
60 days of interest
6 Months
3 months of interest
60 days of interest
9 Months
3 months of interest
60 days of interest
12 Months
6 months of interest
60 days of interest
18 Months
6 months of interest
N/A
24 Months
6 months of interest
N/A
30 Months
6 months of interest
N/A
36 Months
6 months interest
90 days of interest
48 Months
6 of months interest
N/A
60 Months
18 months interest
150 days of interest
120 Months
24 months interest
N/A

About Discover Bank

With a history of over 30 years, Discover has a proven track record of offering a range of financial products. While the company first gained popularity for its credit card, it has since expanded its offerings to include savings products, such as savings and CD accounts, as well as personal and home loans, IRAs, and a checking account.

Discover has a commitment to being a top digital bank and is dedicated to helping customers achieve a brighter financial future.

About Ally Bank

Despite its reputation as a newcomer to the banking industry, Ally Bank has actually been in operation for over a decade, having been established in 2009. As an online bank, Ally offers a full range of services, including savings and CD accounts, money market accounts, loans, mortgages, checking accounts, investments, and retirement services.

With a focus on low fees, 24/7 customer support, and highly competitive rates, Ally has earned a reputation for providing exceptional services. The addition of checking accounts to its lineup of offerings makes Ally a credible alternative to traditional banks, with the ability to handle all your day-to-day financial needs using only Ally.

Compare CD Rates

Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann's areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.