The Fed just cut rates, but this high-yield savings account is still a great deal

With the Federal Reserve cutting its benchmark interest rate for the first time in more than four years, many Americans are (rightly) worried that the generational high returns we’ve seen from online savings accounts may be in jeopardy .

However, that doesn’t mean it’s time to ditch high-yield savings accounts. In fact, it’s quite the opposite. As we enter a falling rate environment, it’s important to realize that online-based high-yield savings accounts that offer returns several times the national average are likely to continue to do so. And if you’re looking for a new savings account, the Discover® Online Savings Account is one worth a closer look.

The Discover® Online Savings Account

The Discover® Online Savings Account is a high-yield savings account product from Discover® Bank (the same Discover that issues the popular cash-back credit cards). And there are a few good reasons why you might want to take a closer look at the account.

If you want to make a change to your banking relationship, click here to open a Discover® online savings account no minimum initial deposit.

Our picks for the best high-yield savings accounts of 2024

American Express® High Yield Savings APY 4.10% Fee information Circle the letter I. Annual percentage yield of 4.10% to October 10, 2024 Member of the FDIC.	APY 4.10% Fee information Circle the letter I. Annual percentage yield of 4.10% to October 10, 2024	Min. to win $0
Capital One 360 ​​Performance Savings APY 4.10% Fee information Circle the letter I. Check the Capital One website for the most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of September 27, 2024. Rates are subject to change at any time before or after account opening. Member of the FDIC.	APY 4.10% Fee information Circle the letter I. Check the Capital One website for the most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of September 27, 2024. Rates are subject to change at any time before or after account opening.	Min. to win $0
CIT Platinum Savings APY 4.70% APY on balances of $5,000 or more Fee information Circle the letter I. 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY Min. to win $100 to open an account, $5,000 for max APY Member of the FDIC.	APY 4.70% APY on balances of $5,000 or more Fee information Circle the letter I. 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY	Min. to win $100 to open an account, $5,000 for max APY

Although the Federal Reserve recently lowered its benchmark rate, the account still has a yield that is significantly higher than the national average of 0.46%. The Discover® Online Savings Account currently offers an APY of 4.10%%. This rate is subject to change at any time and, to be clear, is likely to trend downward if the Fed continues to cut rates, but you can expect the account to continue to perform above average.

In addition to the high performance, there are some other advantages of this account:

• The Discover® Online Savings Account has no minimum balance requirement. You can literally start with $0.01.
• There are no monthly maintenance fees and the only significant cost is a $30 fee for outgoing bank transfers.
• There is no withdrawal limit, while many competitors limit savings withdrawals to six per month.
• Discover has a top-rated mobile app for both iOS and Android devices.
• There are several ways to deposit and withdraw money, including mobile deposit through the app, online transfers to internal or external bank accounts, and direct deposit.

Of course, there is no such thing as a perfect savings account, and this is no exception. For example, the Discover® Online Savings Account does not offer access to ATMs. But it certainly checks many of the boxes that savers tend to look for.

A robust banking ecosystem

In addition to all of the above, the Discover® Online Savings Account might be a good fit if you already have a Discover credit card or are also looking for an online checking account (the Discover® Cashback Debit Account is one of The Ascent’s top-rated checking accounts).

In addition to offering excellent checking accounts, credit cards, and CDs, it’s also important to mention that some of Discover’s products complement each other well. As an example, I mentioned in the previous section that the Discover® Online Savings Account does not offer access to ATMs. However, it’s easy to transfer money between it and the Discover® Cashback Debit Account, which ago they offer access to ATMs.

Plus, for savings you don’t expect to need anytime soon, Discover offers an excellent line of high-yield CDs with terms up to 10 years.

Simply put, if you’re looking for it replace your bank at your branch, rather than simply looking for a place to get a higher return on your savings, the Discover® Online Savings Account could be just what you’re looking for.