Table Of Content
If you're looking for a low-risk way to grow your savings, certificates of deposit (CDs) can be a good option. Two popular banks that offer CDs are Capital One and Discover.
In this article, we'll compare and review the CD rates offered by these two banks, as well as explain how CDs work and the minimum deposit required to open an account. We'll also delve into early withdrawal penalties, an important factor to consider when choosing a CD.
Here's a general CD comparison:
Capital One CDs | Discover CDs | |
|---|---|---|
CD Range | 3.90% – 4.75% | 2.00% – 4.75% |
Minimum Deposit | $0 | $2,500 |
Early Withdrawal penalty | 3-6 months of interest | 3 – 24 months of interest |
Term | 6 – 60 months | 3 – 120 months |
How Do CD Rates Compare?
Like the banks themselves, Discover and Capital One CD rates are quite similar. There is no clear winner here, just a slight advantage for Discover in some specific terms.
Overall, the differences are minor and each of them offer competitive CD rates compared to the industry average. The main drawback of both of them is the lack of no penalty CD.
CD Term | Capital One APY | Discover APY |
|---|---|---|
3 Months | N/A | 2.00% |
6 Months | 3.90% | 3.40% |
9 Months | 3.90% | 3.50% |
12 Months | 4.75% | 4.75% |
18 Months | 4.75%
| 4.75% |
24 Months | 4.30% | 4.30% |
30 Months | 4.30% | 4.30% |
36 Months | 4.30% | 4.30% |
48 Months | 4.20% | 4.00% |
60 Months | 4.10% | 4.00% |
120 Months | N/A | 3.80% |
Both Offer Similar Early Withdrawal Penalty
If the account holder needs to withdraw the funds before the maturity date, the institution may impose a penalty, which can be a percentage of the interest earned or a specific number of days of interest.
As we can see in the table below, there is no clear winner here. Both banks offer more or less the same penalties for the different terms. For the very long CD terms, Capital One seem to be a better option since the penalty is lower than Discover.
CD Term | Capital One | Discover |
|---|---|---|
3 Months | N/A | 3 months of interest
|
6 Months | 3 months of interest | 3 months of interest |
9 Months | 3 months of interest | 3 months of interest |
12 Months | 3 months of interest | 6 months of interest |
18 Months | 6 months of interest | 6 months of interest |
24 Months | 6 months of interest | 6 months of interest |
30 Months | 6 months of interest | 6 months of interest |
36 Months | 6 months interest | 6 months of interest |
48 Months | 6 of months interest | 6 months of interest |
60 Months | 6 months of interest | 18 months of interest |
120 Months | N/A | 24 months of interest |
CD Alternatives: What Do Capital One And Discover Offer?
Discover Online Savings | Capital One 360 Savings | |
|---|---|---|
Savings Rate | 3.90% | 4.00% |
Minimum Deposit | $0 | $0 |
Fees | $0 | $0 |
Promotion | $150 – $200
Minimum deposit of $15,000 / $25,000, expired on 06/15/2023
| None |
The main alternative to CDs is savings account. In this case, the banks offer Discover Bank Online Savings and the Capital One 360 Performance Savings account.
Both banks offer competitive interest rates and no minimum deposit requirements or monthly maintenance fees, making them great options for customers looking to maximize their savings.
