Categories: Banking Investing Reviews

Discovery Bank Fixed Deposit Accounts Review 2021

Discovery Bank is slowly but surely moving up in the banking ranks in South Africa. Thanks to the bank’s ability to provide competitive products and offering some of the best interest rates in South Africa.   

Opening a fixed deposit account with Discovery Bank is very easy. The account can be opened online in a few minutes and it allows you to make your initial deposit as soon as the account is active. 

There are different types of Fixed deposit accounts that you can open. Clients can either open a tax-free savings account, a notice savings account, or a demand savings account. 

The amount of interest that clients earn depends on the investment amount and the period that they are willing to invest. Normally an investment of R100,000.00 or more with a minimum investment period of 60 months earns the highest interest rate. 

Discovery Bank Fixed Deposit Accounts Rates

Fixed  Deposit TermNominal Interest RateEffective Interest Rate
3 Months4.2%4.21%
6 Months4.9%4.95%
12 Months5.8%5.96%
18 Months5.9%6.15%
24 Months6.6%7.09%
36 Months6.9%7.64%
60 Months7%8.35%
Discovery Bank fixed deposit rates 2021

Discovery Bank offers fixed deposit accounts for investment periods of not less than 3 months and of not more than 60 months. Investment on a fixed deposit starts from R10,000.00 with the maximum investment amount being unclear. 

Interest rates on the fixed deposit accounts start from 4.2% to 7% nominal annual compounded monthly. The level of interest that clients get is determined by the period and the amount of investment. 

Accounts to choose from

There are three accounts that investors can choose from, which include a tax-free account, a notice account, or a demand account. 

A Tax-Free Savings account allows clients to save money into this account without having any obligation to pay tax from the interest earned. A tax-free savings account, however, comes with some limitations which are:

  • Annual limit of R36,000.00.
  • Lifetime deposit limit of R500,000.00.

The tax-free savings account can be opened by anyone. Note that the sum of your tax-free savings must not exceed R36,000.00 per annum, including tax-free savings accounts held with other financial services providers. 

By exceeding any of the thresholds that SARS has put in place, a penalty fee will apply.

A notice account is an account that requires notice before funds are withdrawn from your fixed deposit account. Notice accounts vary and the higher the number of notice days the higher the interest that will be earned from the fixed deposit account.

On the other hand, a demand deposit account is an account from which deposited funds can be withdrawn at any time. The account operates more like a cheque account since money can be accessed on any day without giving out a notice.

Discovery Bank 3 Months Fixed Deposit Account

The Discovery Bank 3 Months Fixed Deposit Account has the second-best interest rate in South Africa. The account offers a 4.2% nominal interest rate. The minimum required deposit on the fixed deposit account is R10,000.00. 

Discovery Bank 6 Months Fixed Deposit Account

The Discovery Bank 6 Months Fixed Deposit Account offers a 4.7% nominal interest rate. The 4.7% nominal interest rate is the 3rd highest fixed deposit nominal interest rate in its category with Bidvest Bank and African Bank coming in second and first respectively. 

The interest on the 6 months fixed deposit account compounds monthly and yields an effective interest rate of 4.90% at Maturity. That is if you capitalise your interest earnings. 

Discovery Bank 12 Months Fixed Deposit Account

This fixed deposit account requires a minimum investment of R10,000.00. The account has a nominal interest rate of 5.6% and an effective interest rate of 5.75%. The interest earnings on this account will be determined by a number of factors, therefore, interest on your fixed deposit account will be quoted based on your level of investment and other factors. 

Discovery Bank 18 Months Fixed Deposit Account

The 18 Months Discovery Bank Fixed Deposit account has slightly higher interest rates than that of the 12 months Fixed Deposit Account. The account offers a nominal interest rate of 5.7% calculated monthly. Effective interest rate for the investment is 5.94%.

Discovery Bank 24 Months Fixed Deposit Account

This account is suitable for investors that want to invest for the medium-term. The account has one of the highest interest rates in the category in South Africa offering a nominal interest rate of 6.5% which is a huge increase from the 18 Months Fixed Deposit Account. 

To open this account you need to invest at least R10,000.00 or more. Should you choose to capitalise your interest earnings, your investment can earn 6.92% interest recalculated at Maturity. 

Discovery Bank 36 Months Fixed Deposit Account

One of the most favored accounts at Discovery Bank, at one point in 2020, the account had an interest rate offering of more than 9.00%. As of 2021, the account offers a nominal interest rate of 6.9% and an effective interest rate of 7.64%.

Discovery Bank 60 Months Fixed Deposit Account

This is the highest offering of all fixed deposit accounts from Discovery Bank. This is due to the duration of investment which is 5 years and it is the highest investment duration of every fixed deposit account from Discovery Bank. 

The 60 months fixed deposit account has a nominal interest rate of 7% which is calculated monthly and yields an effective interest rate of 8.35% at the Maturity date if interest is capitalised. 

Conclusion

Discovery Bank doesn’t disappoint when it comes to fixed deposit account offerings as the bank has some of the most competitive interest rate offerings in South Africa. As much as there are alternative fixed deposit accounts in the market, Discovery Bank always makes it easier for clients to open and maintain their accounts online. You will have peace of mind knowing that you have the ability to manage your account remotely at all times.

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Lethabo Ntsoane

Lethabo Ntsoane is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in reviews and financial tips.

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