Discover Bank Penalty-Free 12 Month CD

By Pinyo, on June 30, 2009

I have been a Discover customer since 1996 — right out of college — and for good reason. I believe that Discover is one of the very few financial institutions that put their customers first and continue to innovate. As of today, Discover Bank announced their Penalty-Free 12 Month CD. Despite the added feature, the interest rate remains competitive at 2.20% APY (see top CD rates for comparison).

How Does The Bank Penalty-Free 12 Month CD Works?

If you involuntarily lose your job during the term of the CD, you will be allowed to make a partial withdrawal of the funds or close the account with a full return of your principal and any credited interest with no penalties. The program also applies if you are self-employed.

Who is eligible for the No Penalty CD?

To be eligible, you must meet the following conditions:

1. You must open or renew a 12-month CD with a minimum $2,500 balance between July 1 and Dec. 31, 2009.
2. The account must be open for at least 30 days — i.e., benefit does not apply within the first 30 days of account opening or renewal.
3. If you are employed by a business or organization, you must:
   • Be employed full time when the CD was opened or renewed, and for 30 days thereafter, and
   • Involuntarily lose your job
4. If you are self-employed when CD was opened or renewed, you must have suffered one of the following events after account opening or renewal:
   • Business property or inventory damage, or
   • Business closure for at least 5 business days due to fire or flood.

In addition to No Penalty CD, Discover has other excellent products such as Prepaid Credit Card for Teens With Parental Controls, 5% Cashback reward program, etc. Their account center also has numerous financial tools — one of my favorites is the Paydown Planner.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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