Table Of Content
Investing in a certificate of deposit (CD) is a smart way to earn higher interest rates on your savings while keeping your money safe. In this article, we'll compare the CD offerings from Marcus and Discover, two popular online banks with competitive rates and flexible terms.
We'll take a closer look at their minimum deposit requirements, term options, interest rates, and early withdrawal penalties to help you decide where to invest your money.
Marcus | Discover | |
|---|---|---|
CD Range | 3.75% – 4.50% | 2.00% – 4.00% |
Minimum Deposit | $500 | $2,500 |
Early Withdrawal penalty | 90 – 270 days of of interest | 3 – 24 months of interest |
Terms | 6 – 72 months | 3 – 120 months |
How Do CD Rates Compare?
As we can see in the table below, Marcus and Discover CD rates are similar. There is small advantage to Marcus when it comes to short term CDs, while Discover rates may be better for the long term CDs.
The significant difference between them is the minimum deposit required – Discover $2,500 minimum is much higher than Marcus, which require only $500 to open a CD.
If you're looking for a 2-year CD, the rates are quite similar – but you can find better 2-year CD rates on other banks.
CD Term | Discover APY | Marcus APY |
|---|---|---|
3 Months | 2.00% | N/A |
6 Months | 3.70% | 4.20% |
9 Months | 3.80% | 4.30% |
12 Months | 4.00% | 4.25% |
18 Months | 4.00%
| 4.10% |
24 Months | 4.10% | 4.10% |
30 Months | 3.50% | N/A |
36 Months | 3.50% | 4.00% |
48 Months | 3.50% | 3.75% |
60 Months | 3.50% | 3.75% |
72 Months | N/A | 3.75% |
84 Months | 3.50% | N/A |
120 Months | 3.50% | N/A |
When It Comes to No Penalty CD - Marcus Wins
Marcus's no penalty CD option is another standout product, but the offering a current rate that is lower than the shorter-term Marcus CDs.
One of the main advantages of this CD is that customers have more flexibility since they are not required to keep the CD until it matures. This means that they can withdraw their funds before the end of the 13-month term without incurring any penalty fees.
CD Term | APY |
|---|---|
Marcus 13 Months – No Penalty | 4.15% |
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CD Early Withdrawal Penalty Comparison
When it comes to early withdrawal penalty, Marcus and Discover penalties are very similar. The penalty for early withdrawal on Discover CDs varies based on the term. For CD terms less than one year, you'll be charged three months of simple interest (or 90 days with Marcus).
For terms of one to four years, the penalty increases to six months of simple interest (180 days with Marcus).
CD Term | Discover | Marcus |
|---|---|---|
3 Months | 3 months of interest | N/A
|
6 Months | 3 months of interest | 90 days of interest |
9 Months | 3 months of interest | 90 days of interest
|
12 Months | 6 months of interest | 180 days of interest |
18 Months | 6 months of interest | 180 days of interest |
24 Months | 6 months of interest | 180 days of interest |
30 Months | 6 months of interest | N/A |
36 Months | 6 months interest | 180 days of interest |
48 Months | 6 of months interest | 180 days of interest |
60 Months | 18 months interest | 180 days of interest |
72 Months | N/A | 270 days of interest |
84 Months | 24 months interest | N/A |
120 Months | 24 months interest
| N/A |
About Marcus
Goldman Sachs' branch, Marcus, provides a range of investment opportunities and savings accounts, in addition to some lending products.
This institution caters to those interested in investing, but it does not offer a checking account in its product line. Being an online bank, Marcus lacks physical branches, but it provides customer support online, via phone, or through the app.
The online platform and app are designed to provide an excellent user experience, and its website is comprehensive, featuring a FAQ section, and users can access live chat through the Marcus website.
About Discover Bank
Discover Bank is an online bank that has been operating for over 30 years. It offers a range of banking products including savings accounts, checking accounts, money market accounts, CDs, and loans.
Discover Bank is known for its competitive interest rates and low fees, making it a popular choice among customers looking for an online banking solution. The bank has a mission to help people achieve a brighter financial future and aims to be a leading digital bank.
Compare Discover Certificate Of Deposit (CDs)
You can get competitive rates with both Ally and Discover CDs. Compare rates, minimum deposits, and early withdrawal penalties.
Discover and Capital One offer high CD rates on all terms. However, for each term there is a different winner – here's a full comparison: Synchrony CDs vs. Discover CDs
Synchrony Bank offers better CD rates than Discover for most terms. Compare CD rates, minimum deposit, and early withdrawal fees.
Compare Marcus Certificate Of Deposit (CDs)
Synchrony and Marcus offer high CD rates, including no penalty CD. How do they compare when it comes to terms and early withdrawal penalty?
Marcus offers higher CD rates than Capital One on most terms but not all of them. Compare CD rates, min deposit, and early withdrawal fees.
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How We Compare CDs: Methodology
In our comprehensive certificate of deposit (CD) comparison, The Smart Investor team meticulously evaluated various CDs across four key categories to assist you in selecting the most suitable option for your savings goals.
- CD Rates: We thoroughly examined the interest rates offered by each CD, considering their competitiveness in the market. Higher rates typically translate to greater returns on your investment over the CD's term. Additionally, we scrutinized any special promotional rates or conditions that might affect the overall value of the CD.
- CD Features: This category focuses on the unique features and terms associated with each CD. We assessed factors such as minimum deposit requirements, early withdrawal penalties, and the availability of flexible terms. Additionally, we considered any additional perks like interest compounding frequency or options for automatic renewal.
- Customer Experience: A positive customer experience is crucial in banking, and we evaluated each institution's performance in this regard. We looked into aspects such as the ease of opening a CD, the quality of customer service, and the availability of support channels. Reviews from reputable sources such as Trustpilot and JD Power rankings were also considered to gauge overall user satisfaction.
- Bank Reputation: The reputation of the bank is a significant factor in the decision-making process. We examined the bank's financial stability, regulatory compliance, and public perception to assess its overall trustworthiness and reliability as a CD provider.
