Discover To Increase CD Rates For A Limited Time: How You Can Take Advantage
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If you have a purchase looming on the horizon, it’s time to take advantage of a hot new offer from Discover. The bank has announced a limited-time interest rate increase on its six-month certificate of deposit (CD) accounts, allowing customers to earn 4.20% annual percentage yield (APY). Discover Bank CD rates and details are accurate as of 07/22/2025.
The Discover Offer
Discover has announced an increase in interest rate on its six-month CD account, raising it from 3.70% to 4.20% for a limited time. While the exact end date of the offer is unknown, consumers would be smart to take advantage of the offer before it ends.
Discover CDs are more flexible than most, requiring no minimum deposit to open an account. Interest also compounds daily and gets added to the account monthly. In comparison, some of the best CDs on the market require minimums of hundreds to thousands of dollars to lock in a favorable rate.
That said, the more money you put in, the more interest you’ll earn. Six months is a short-term commitment, so to get the most bang for your buck, we’d frontload the account with as much as your budget allows. Remember that there are penalties for touching the funds before your CD matures; Discover charges three months’ simple interest for early CD withdrawals with terms of less than a year.
What Is A CD?
A CD is a savings account that allows consumers to earn interest at a fixed rate over a predetermined period. The tradeoff is that users have limited access to their funds, unlike most savings accounts where withdrawals are easy and do not incur a penalty. CDs are lucrative for those saving for a big-ticket purchase, like a home or a car, or those with disposable funds they’d like to grow.
When choosing a CD, note its compounding schedule, which is the key to your profit. Some CDs compound interest daily, while others compound monthly. The more frequent the interest compounds, the more you stand to earn.
Consumers may opt for a CD over a high-yield savings account if they do not require access to their funds for a foreseeable period. While both accounts typically offer higher interest rates than traditional savings accounts, high-yield accounts come with interest rates that fluctuate based on market conditions and the Federal Reserve’s benchmark rate.
CDs, however, lock in an interest rate over a fixed term, which can guarantee a higher return when saving for a goal with a specific timeline. High-yield savings accounts are better used for building an emergency fund or saving toward goals without a fixed deadline.
Some banks may offer more lenient or stringent terms if you anticipate emergency withdrawals, but we’d advise opening a CD only if you’re sure the funds can stay put and grow. When picking a CD, make sure it is federally insured. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, bank and ownership category, while the National Credit Union Administration (NCUA) insures individual accounts at credit unions for up to $250,000.
How Much Can I Earn?
When you invest in a CD, how much you earn depends on how much you deposit upfront, since you typically can’t add more money during the term. If you have a long-term savings goal and want to earn a specific amount of interest from a CD, use Forbes Advisor’s CD calculator to run the numbers in advance. It will help you estimate how much you’ll receive when the CD matures.
For example, if you deposit $10,000 into a six-month CD with a 4.00% APY compounded monthly, you’ll earn $198.04 in interest by the end of the term.
Now say you deposit $20,000 into a CD with the same terms. You’d earn $396.08, or double the interest thanks to double the deposit.
No matter how much you choose to invest, make sure it’s an amount you can afford to set aside for the entire term. Many banks charge penalties for early withdrawals, and the goal is to earn interest, not lose money from your deposit.