Buy Bank Stocks – 5 Best Bank Stocks To Buy Right Now In 2021

Fact Checked by Gary McFarlane

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

With increased profits and a reduction in bad loans, banking stocks are flying. Major banks have also benefited from a surge in newly launched IPOs, alongside increased confidence in the broader US economy.

If you’re looking to build a portfolio of the best bank stocks that the market has to offer – this guide is for you. We will also walk you through the simple process of buying bank stocks at 0% commission with a regulated online broker.

Table of Contents

#1 Broker to Buy Bank Stocks – eToro

1
$50
Mobile AppYes
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% CommissionVisit WebsiteOur score 10

How to Buy Bank Stocks – A Quick Guide For 2021

If you’re wondering how to buy bank stocks in a low-cost and user-friendly way – consider eToro. This broker allows you to buy the best bank stocks at 0% commission. Plus, you only need to meet a minimum investment of $50.      

  • Step 1: Register with eToroThe first step is to visit the eToro website and open an account. This is a simple procedure that requires some personal information and contact details.
  • Step 2: KYC – The KYC process at eToro is automated, so you should have a fully verified account in less than a minute. All you need to do is upload a copy of your government-issued ID.
  • Step 3: Make a Deposit – Deposit some funds into your newly created eToro account via a debit/credit or e-wallet. Bank transfers are also supported. The minimum deposit is just $50 and US clients are not charged any transaction fees.
  • Step 4: Search for Bank Stock – If you know which bank stock that you wish to add to your portfolio, search for it. When you see the name of the company appear from the search bar, click on the ‘Trade’ button.
  • Step 5: Buy Bank Stocks – The final step is to place a buy order on your chosen bank stock. You can do this by entering your investment stake into the ‘Amount’ box and clicking on ‘Open Trade’ to confirm your position.

And it’s as simple as that – you’ve just bought bank stocks at eToro without paying any commission.

67% of retail investor accounts lose money when trading CFDs with this provider.

Best Bank Stocks to Buy Now – List of the Best Bank Stocks

There are dozens of bank stocks – both in the US and overseas, that have performed extremely well in 2021. With that said, the top five bank stocks to buy right now can be found below.

  1. Bank of America – Overall Best Bank Stock to Buy Right Now
  2. U.S. Bancorp – Great Bank Stock for Dividend Consistency
  3. JPMorgan Chase – Long-Term Bank Stock With Huge Cash Reserves
  4. Signature Bank – Medium Cap Bank Stock With 12-Month Returns of 190%+
  5. New York Community Bancorp – Commerical Bank Stock With Running Dividend Yield of Over 5%

Before buying any of the above bank stocks – it is crucial that you do your own research. You will find our own personal analysis of each stock by scrolling down.

How To Buy Bank Stocks – Choose a Broker

You will also need to choose a suitable broker so that you can buy bank stocks in a low-cost and safe environment. The top 10 brokers for this purpose can be found below.

  1. eToro – Overall Best Place to Buy Bank Stocks
  2. Webull – Buy Bank Stocks at 0% Commission
  3. SoFi – Invest in Bank Stocks via Fractional Shares
  4. Ally Invest – Challenger Bank Offering Low-Cost Stock Investments
  5. Interactive Brokers – Trade US Stocks at 0% Commission
  6. E*TRADE – Good Broker for Long-Term Investments
  7. Merrill Edge – Online Brokerage With a Variety of Investment Accounts
  8. Fidelity – Trusted US Brokerage With 7,000+ Stocks
  9. Zacks Trade – Top Broker for Advanced Traders
  10. Robinhood – Great US-Based Broker for Beginners

Be sure to research your chosen investment platform well before opening an account. In doing so, you can be 100% sure that the broker is right for your skillset and investment budget.

Best Bank Stocks to Buy Now – Full Analysis

There are many factors that you need to consider in your search for the best bank stocks to buy right now. This includes the fundamentals of the company’s balance sheet – such as how much debt it has and whether or not there are sufficient levels of free cash flow at hand.

You also need to assess how the bank stock performed before and since COVID-19 came to fruition – and what the future upside potential looks like in percentage terms.

If you need some inspiration in choosing the best bank stocks for your portfolio – below we analyze five top-rated financial institutions.

1. Bank of America  – Overall Best Bank Stock to Buy Right Now

We would argue that the overall best bank stock to buy right now is Bank of America. This sentiment is shared by stock market legend Warren Buffet, who, through his company Berkshire Hathaway, is by far the largest shareholder in the bank. At the time of writing, Berkshire Hathaway holds a 12% stake in Bank of America, with over 1 billion shares.

In terms of its recent stock market performance, Bank of America is up over 61% in the past 12 months alone. Over the prior five years – which includes the bank’s steep COVID-related decline in early 2020, the shares are up over 114%. As such, this is one of the best-performing bank stocks that the market has to offer.

bank of america stocks

If you do proceed to purchase Bank of America stocks, you will also be entitled to a quarterly dividend. Based on current prices, the stocks are offering a running yield of 1.84%. This isn’t the best dividend yield that the sector has to offer, albeit, it’s a nice addition to Bank of America’s share price trajectory.

67% of retail investor accounts lose money when trading CFDs with this provider.

2. U.S. Bancorp – Great Bank Stock for Dividend Consistency

It goes without saying that many bank stocks halted dividend payments in 2020 as per COVID-19. However, U.S Bancorp was one of the few stocks in this marketplace that maintained its dividend policy. In fact, the firm met its $0.42 per share dividend target in each quarter of 2020. Its most recent payment for Q3 2021 increased to $0.46 per share – a notable rise of almost 10%.

U.S. Bancorp stocks

At the time of writing, based on current prices, U.S. Bancorp is offering a running yield of 3.21% – which is more than what many bank stocks are able to cover at present. In terms of its share price history, U.S. Bancorp stocks are up 32% over the prior 12 months. All in all, if you are looking for the best bank stocks for dividend consistency – U.S. Bancorp is arguably the stand-out option.

67% of retail investor accounts lose money when trading CFDs with this provider.

3. JPMorgan Chase – Long-Term Bank Stock With Huge Cash Reserves

JPMorgan Chase is the largest bank stock in terms of market capitalization. It is also the most profitable bank stock in global terms. Looking at the financials, JPMorgan Chase had an excellent third quarter. As per its earnings report, revenues are up year-on-year by 8.8%, with net income increasing by over 23%.

jpmorgan stocks

Most notably is the bank’s net change in cash, which rose by 977%. It appears likely that this is because JPMorgan Chase is waiting for interest rates to rise, so instead of purchasing US Treasuries it is stockpiling cash reserves. Over the past 12 months, JPMorgan Chase stocks have risen by 36%. Current prices are returning a running dividend yield of 2.48%.

67% of retail investor accounts lose money when trading CFDs with this provider.

4. Signature Bank – Medium Cap Bank Stock With 12-Month Returns of 190%+

If you’re looking to buy bank stocks with high growth potential, it might be worth taking a closer look at Signature Bank. This financial institution – which was launched as recently as 2001, specializes in commercial banking services. Based on current prices, the bank is carrying a market capitalization in and around the $20 billion mark.

Signature Bank stocks

Most impressively, Signature Bank has generated stock market returns of over 190% in the past 12 months alone. This is alongside a small running dividend yield of just 0.68% – based on current pricing levels. As per the firm’s Q3 earnings report, revenues and net income were up 41% and 74% year-on-year, respectively. Its net change in cash rose by an impressive 109%, while net profit margins increased by 23%.

67% of retail investor accounts lose money when trading CFDs with this provider.

5. New York Community Bancorp – Commerical Bank Stock With Running Dividend Yield of Over 5%

Founded way back in 1859, New York Community Bancorp is a commercial bank with over 225 branches in the US. Primarily, the bank focuses on multi-family loans, albeit, it also offers additional products and financial services to the commercial sector. One of the main reasons why we think that New York Community Bancorp is a top-rated bank stock is because of its attractive dividend policy.

New York Community Bancorp stocks

At the time of writing, this stands at a running yield of over 5%. Furthermore, the stocks have performed very well in 2021, with a share price increase of 26% over the past 12 months. In a similar nature to Signature Bank – New York Community Bancorp has a modest market capitalization. At just over $5 billion, this offers attractive upside potential.

67% of retail investor accounts lose money when trading CFDs with this provider.

How to Choose the Best Bank Stocks for my Portfolio?

Knowing which banks stocks to add to your portfolio can be a challenging task. If you are bullish on the broader banking industry, then buying shares in multiple financial institutions can be a wise move. This will allow you to diversify your capital and thus – reduce your long-term risk.

In the sections below, we explain how to choose the best bank stocks for your financial goals.

Type of Bank Stock

First and foremost, you need to have an understanding of the specific market that the bank stock operates in. This can include retail, commercial, investment, and/or private banking services.

While some banks specialize in just one division, larger firms will likely cover all bases. As part of your diversification strategy, it’s a wise idea to buy bank stocks from all of the aforementioned divisions.

Market Capitalization

The size of the bank stock that you invest in can determine how much upside potential there is available – and what risks are present. For example, if you were to invest in JPMorgan Chase, you would be buying stocks in a company with a market capitalization in the $500 billion region. In theory, this means that while the upside is potentially limited, so are the risks.

signature bank vs jpmorgan

At the other end of the spectrum, you have smaller bank stocks like Signature Bank and New York Community Bancorp – both of which have a market capitalization of less than $20 billion. While this does allow stockholders to target above-average capital gains, the risks associated with such a small valuation are enhanced.

Dividends

Dividends can be hit or miss with bank stocks. First and foremost, many banks are stockpiling cash at present – which is largely due to the uncertainties of the pandemic. In turn, this means that many banks have either cut or suspended dividends since COVID came to fruition.

With that said, there are a number of bank stocks that still offer a consistently attractive dividend payout. For instance,

U.S. Bancorp was able to maintain its dividend of $0.42 per share throughout 2020 – and it’s currently offering a running yield of over 3%. New York Community Bancorp is offering an even more attractive running yield of 5.5% – based on prices at the time of writing.

Balance Sheet

The balance sheet is a great indicator of where the bank stock in question stands in terms of its financial health. In particular, it’s wise to assess how much free cash flow the bank has – which you can find out from the firm’s most recent earnings report. Perhaps even more important is to see how much debt the bank is holding on its books. Ultimately, it’s best to stay away from bank stocks that are holding excessive levels of debt.

Where to Buy Bank Stocks – Full Broker Reviews

You will need to have an account with a top-rated broker before you can buy bank stocks. If you’re yet to choose a suitable broker for your needs – below you will find a selection of the best 10 providers in this space – all of which offer low fees and strong regulatory standing.

1. eToro – Overall Best Place to Buy Bank Stocks

bitcoin today

eToro is by far the best online broker to buy bank stocks. First and foremost, the platform is home to thousands of stocks – not only from the US but plenty of international markets. This covers everything from Hong Kong and the UK to Germany and France. Interestingly, while virtually all online brokers charge a premium to access foreign bank stocks, this isn’t the case at eToro. On the contrary, the platform allows you to invest in stocks at 0% – regardless of which exchange the shares are listed.

Furthermore, eToro allows you to purchase fractional shares – with the minimum investment starting at just $50. This is ideal for building a diverse portfolio of retail, commercial, private, and investment bank stocks. eToro also gives you the opportunity to invest in bank stocks in a passive manner. In addition to a number of relevant bank stock ETFs, the broker also offers a specialist CopyPortfolio.

etoro copy portfolio

For instance, its TheBigBank CopyPortfolio – which is professionally managed and rebalanced by the eToro team, allows you to invest in 25 different bank stocks through a single trade. We should also mention the Copy Trading feature, which, instead of injecting money into a specific fund – allows you to mirror the trades of a successful eToro user. There are thousands of verified investors to choose from – and the minimum required per Copy Trading portfolio is just $500.

Getting started at eToro requires a minimum investment of just $50 – and you can instantly fund your account with a debit/credit card or e-wallet. Other supported payment methods include ACH and online banking. US clients are not charged any deposit fees, and the broker is adequately regulated – with licenses issued by the SEC, FCA, ASIC, and CySEC.

Pros

  • Invest in stocks at 0% commission
  • Minimum investment per stock is $50
  • Supports debit/credit cards, e-wallets, and bank transfers
  • Regulated by the SEC, FCA, ASIC, and CySEC
  • Used by over 20 million people
  • Perfect for beginners
  • Social and copy trading tools

Cons

  • Perhaps too basic for technical traders
  • No support for MT4 or MT5

 67% of retail investor accounts lose money when trading CFDs with this provider.

2. Webull – Buy Bank Stocks at 0% Commission

webull review

If eToro doesn’t quite take your fancy, then you might consider Webull instead. This popular broker permits 0% commission trading on US-listed stocks, ETFs, and options. Fractional investments are supported too, and no minimum account balance is required to get started. You can choose from a number of retirement accounts to benefit from tax-advantageous investments.

webull review

Depending on your own personal preference, you can choose to access Webull via the main website or through the broker’s mobile app. The latter is compatible with both iOS and Android smartphones. In terms of supported payment methods, this includes ACH and bank wires. The two main drawbacks with Webull are that bank wire withdrawals cost $25 per transaction and there is very little in the way of international stocks.

Pros

  • Thousands of US-listed stocks
  • 0% commission trading
  • Also supports ETFs and stock options
  • No minimum deposit

Cons

  • No support for debit/credit card deposits
  • Very limited selection of non-US stocks
  • Spreads can be somewhat high
  • Wire transfer withdrawals cost $25 per transaction

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

3. SoFi – Invest in Bank Stocks via Fractional Shares   

SoFi invest review

Founded in 2011, SoFi is a personal finance platform that offers a variety of services – all of which can be accessed online or via an Android/iOS app. This covers credit cards, loans, mortgages, and investment products. Regarding the latter, SoFi allows US investors to open an account with no minimum deposit to meet – and all stocks can be purchased at 0% commission.

SoFi invest review

You can purchase a fraction of one stock from just $5 per trade. As such, this platform appeals to causal investors that are looking to risk a few dollars here and there. SoFi also offers a selection of cryptocurrencies – as well as ETFs. Should you need help building a portfolio to meet your financial goals, SoFi offers automated investment plans.

Pros

  • Supports fractional shares
  • Offers stocks, ETFs, and crypto
  • Access to IPOs 

Cons

  • Trading platform comes with limited features
  • No copy trading tools
  • Number of supported assets is somewhat limited

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

4. Ally Invest – Challenger Bank Offering Low-Cost Stock Investments  

Ally Invest review

In a similar nature to SoFi, Ally Invest is a multifaceted personal finance platform that’s available both online and via a mobile app. In addition to banking, credit card, and loan services – Ally Invest allows you to buy US-listed stocks at 0% commission. You won’t, however, be able to buy fractional shares – which is a major pitfall of this platform.

ally invest review

Furthermore, Ally Invest does not give you access to intentional equities – so this platform is only suitable if your chosen bank stocks are listed in the US. Nevertheless, you can get started with an Ally Invest account without needing to meet a minimum deposit requirement. You can also deposit and withdraw funds without incurring any charges when opting for ACH, but bank wires come with a cashout fee of $30.

Pros

  • Access banking and investment services via a single platform
  • $0 commission stocks and ETFs
  • No minimum deposit

Cons

  • Does not offer international shares
  • Tools and research features very limited   

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

5. Interactive Brokers – Trade US Stocks at 0% Commission

Interactive Brokers

When electing to open an account with Interactive Brokers – you will have access to thousands of equities and funds from 135 markets across 33 countries. This is a major benefit of choosing this broker – as you can build a highly diversified portfolio of bank stocks from the comfort of your home. When buying US-listed stocks, no commissions apply.

Interactive Brokers

With that said, Interactive Brokers isn’t a suitable option for beginners, as the platform is aimed at seasoned traders that want access to high-level investment tools. This includes technical indicators, market insights, and even stock screeners – all of which can be accessed via the native IBKR suite. No minimum deposits apply at Interactive Brokers – and margin trading rates are very attractive.

Pros

  • Thousands of investments across 135 markets
  • Advanced trading platform for seasoned investors  

Cons

  • Low fees only offered on US-listed stocks
  • Too complicated for beginners 
  • Debit card deposits and withdrawals not available     

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

6. E*TRADE – Good Broker for Long-Term Investments 

E*TRADE review

E*TRADE – which is backed by parent company Morgan Stanley, was first founded in 1982. This online broker offers a wide range of markets – which is inclusive of stocks, index funds, bonds, and ETFs. Various account types can be opened, such as retirement plans and managed portfolio services.

E*TRADE review

If you wish to invest on a self-directed basis, you can buy bank stocks without paying any commission. Once again, this is only the case if the stocks are listed in the US. We also like the E*TRADE ‘New to Investing’ section of the website, which offers a number of user-friendly guides. Additionally, the broker offers financial news articles that allow you to gain insight into key market developments.       

Pros

  • Great for long-term investments
  • Supports a variety of retirement accounts
  • Low fees  

Cons

  • Very limited number of non-US stocks
  • Won’t suit seasoned investors seeking high-level trading tools     

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

7. Merrill Edge – Online Brokerage With a Variety of Investment Accounts   

Merrill Edge review

Merrill Edge is a popular brokerage site that permits 0% commission investing. This is the case across stocks and ETFs listed in the US – and orders must be placed online. Non-US stocks and telephone-based investments will come at a premium. There are no minimum balance requirements at Merrill Edge – which again, is ideal for casual investors.

Merrill Edge review

But, the platform not does allow you to buy fractional shares directly. Instead, you can only do this when you sign up for an automated dividend reinvestment plan. You can also access financial advice at Merrill Edge – but this will require a minimum investment of either $1,000 or $20,000 – depending on how much guidance you need.  

Pros

  • Several account types to choose from
  • Self-directing accounts offer 0% commission stocks
  • ETFs, mutual funds, and bonds also supported 

Cons

  • Financial advisory accounts require minimum investment of $20,000
  • No direct fractional share purchases    

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

8. Fidelity – Trusted US Brokerage With 7,000+ Stocks   

fidelity review

In terms of achieving portfolio diversification, Fidelity is one of the best options in the market. In fact, if you have an investment product in mind, you can be sure that Fidelity offers it. When it comes to supported stocks, you will have access to thousands of equities – both in the US and 25 intentional markets.

You can also invest in IPOs, mutual funds, ETFs, options, bonds, and more. Fees are competitive when buying US-listed bank stocks, not least because Fidelity waivers commission. Furthermore, this top-rated broker offers fractional share purchases via its Stock Slice tool. This allows you to buy bank stocks from just $1 per trade.      

Pros

  • Trusted US-based brokerage
  • $0 commission on US stocks and ETFs
  • Stock Slice tool allows fractional investments of $1 

Cons

  • Perhaps too complex for newbies
  • Non-US assets come with high fees  

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

9. Zacks Trade – Top Broker for Advanced Traders  

zacks trade review

Zacks Trade is the ultimate platform for experienced traders that are looking to place high-volume orders alongside advanced technical analysis tools. Through the Zacks Trade Pro desktop software – seasoned traders have everything they need to outperform the market. Assuming your chosen bank stocks are US-listed and priced over $1 – you will pay a commission of just $0.01 per share.

zacks trade review

For stocks priced below $1, then you will pay a 1% commission of the total trade size. If, however, you are a beginner, Zacks Trade also offers a basic client portfolio. This portal is a lot more user-friendly and allows you to place investments in a relatively simple manner. In addition to stocks, Zacks Trade also offers ETFs, options, and margin trading tools.

Pros

  • Advanced trading platform
  • Huge research and analysis department
  • Great for seasoned traders

Cons

  • Too complex for beginners
  • Cheaper trading fees available elsewhere
  • Minimum deposit required is $2,500

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

10. Robinhood – Great US-Based Broker for Beginners 

robinhood review

The final broker to consider in your search for the best place to buy bank stocks is Robinhood. Founded in 2013, this user-friendly broker has since attracted over 22 million clients to its platform. The standout benefit of choosing Robinhood is that you can buy thousands of US-listed stocks at 0% commission.

robinhood review You can deposit funds via ACH for free, and if you’re on the standard account, the first $1,000 will be processed instantly. Anything over this amount can take up to three working days to arrive unless you are on the gold account – which costs $5 per month. Robinhood supports fractional shares and you can also trade cryptocurrencies, stock options, and ETFs.

Pros

  • No commissions charged
  • Offers US-based stocks, ETFs, and options
  • No minimum deposit
  • Very user-friendly

Cons

  • Spreads can be uncompetitive
  • No support for e-wallets or debit cards
  • No foreign stocks

at eToro, #1 Online Broker

 67% of retail investor accounts lose money when trading CFDs with this provider.

How to Buy Bank Stocks – Detailed & Explained in Full

If you have read this guide up to this point, you should now know which bank stocks you wish to add to your investment portfolio. If you’re ready to get started right now – this section will show you how to invest in the best bank stocks from just $50 and at 0% commission.

For this tutorial, we explain the required steps at SEC-regulated broker eToro. 

Step 1: Open a Broker Account

Your first port of call will be to open an eToro account. The process works much the same as any other online broker, insofar that you will need to supply your name, nationality, date of birth, and home address. You also need to choose a username/password and confirm your email address and cell phone number.     

how to join etoro

The final step is to upload a valid copy of your government-issued ID. This can be a driver’s license, passport, or state-issued ID card. eToro will then verify your document in real-time, so you shouldn’t have to wait more than a couple of minutes to proceed to the next step.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Deposit Funds

You will need to deposit some funds into your eToro account so that you have enough capital to cover your bank stock investments. At eToro, the minimum requirement is a deposit of $50 or more.

Deposit Funds

US clients enjoy fee-free deposits across all supported payment methods – which includes e-wallets, debit/credit cards, and ACH.

Step 3: Search for Bank Stocks

At the top of the screen, you will see a search bar. This is where you need to enter the name of the bank stock that you want to buy. In our example below, we are searching for ‘Bank of America’. When we see the correct stock load, we can click on the ‘Trade’ button.

Bank of America stocks at etoro

You can also view what bank stocks eToro offers by clicking on the ‘Discover’ button from the left-hand side of the screen.

Step 4: Buy Bank Stocks

You should now see an order box appear on your screen – like in the example below. This is where you need to enter your investment stake. This can be any amount from $50 upwards.

Bank of America

In our example above, a $50 investment would get us just over one Bank of America stock. Finally, to complete your investment, click the ‘Open Trade’ button.

If, however, the respective exchange is closed, you will instead need to click ‘Set Order’. This simply means that your order will be executed by eToro once the exchange reopens.

How to Buy Bank Stocks – Conclusion

With dozens of bank stocks outperforming the broader markets in 2021, now could be a great time to add some shares to your portfolio. Be sure to diversify well though, and crucially, always perform your own research prior to parting with any money. 

If you want to buy the best bank stocks right now at 0% commission – eToro allows you to open an account, deposit funds, and confirm your investment in less than five minutes. The minimum amount required to get started is just $50 – so those on a budget are well catered for.

1
$50
Mobile AppYes
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% CommissionVisit WebsiteOur score 10

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About Kane Pepi PRO INVESTOR

Kane Pepi writes for several high profile publications such as InsideBitcoins, the Motely Fool, and Learnbonds. Based in Malta, Kane is extremely skilled at complex subjects related to financial matters - including a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and actively engaged in Doctorate Degree research, for the money laundering threats of the blockchain economy.