The banking sector — and bank stocks — saw an intriguing reversal in the 21st century.
For most of the latter 20th century, banks generally paid depositors a higher rate of interest than bank stocks paid in dividend yields. This trend reversed soon after the turn of the century and became more pronounced after the 2008 financial crisis. Beginning in the early 2000’s, interest-rate cuts gave bank stock investors dividend yields that exceeded the rates depositors earned in interest. Although interest rates have begun to gradually move higher in recent months, bank-deposit interest rates remain extremely low by any measure.
Fortunately, some banks pay the 5+% returns comparable to bank and CD rates in the 20thcentury. These 5 stocks show that earning substantial cash payouts from banks remains possible — if investors take a chance on bank stocks.