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Canadian bank stocks, in itself, are a large category. When it comes to investment banking, there are many different financial institutions and financial companies in Canada from which to choose, and it can take time to know which one is the best option, even when looking at key indicators like strong balance sheets. That said, let’s take a look at some of the best Canadian banking stocks to invest in in 2025.
Best Stocks to Choose From for 2025
When it comes to choosing the most attractive Canadian bank stocks, it might not be much of a surprise that the top Canadian bank stock picks are some of the most notable banks in the Canadian banking system. These are Canada’s top 5 banks. Not only do they have retail banking spaces like some of the smaller banks don’t, but they also have some more robust growth prospects.
These stocks mentioned below also have solid dividend incomes and are a great choice for diverse lending portfolios. Many of these top stocks are also offered at very favourable prices, and don’t cost much more than the smaller banks. From a value standpoint, they're a great investment since banks are always going to be such an important part of the Canadian economy.
Royal Bank of Canada (TSE: RY)
RBC is one of Canada’s largest banks and is considered to be one of Canada’s top 5 banks. They serve over 20 million customers and have over 100,000 employees worldwide. They offer key segments like bank accounts, credit cards, auto financing, mortgages, loans, investment products, and investment services. They even offer global banking services, global wealth management and home equity financing.
One of the reasons that the RBC stock is so popular among investors is it’s established as a dividend growth stock. Plus, their earnings more than cover their dividend payouts. This is impressive, considering the last few years have been really difficult for bank stocks.
Even though they’re so large, RBC still has a lot of growth potential, as many Canadian banks continue to grow. Even after being in business for so many years, Royal Bank continues to grow its market value and provide revenue growth to long-term investors. With that in mind, here are the specifics of RBC stocks.
The Royal Bank of Canada has a stock price of around $171.34 with a yearly range of $115.57 - $175.14. They have a market capitalization of 247.02 B Canadian and a P/E ratio of 13.96. Their dividends yearly yield is 3.51%.
Toronto Dominion Bank (TSE: TD)
TD bank is another one of Canada’s systemically important banks. They were created in 1955 and are headquartered out of Toronto. They were created from a merger of The Dominion Bank, which was founded in 1869, and the Bank of Toronto, which was created in 1855.
TD is actually considered to be a top 10 bank in North America as well as the 23rd largest bank in the world due to its strong international presence. While they do serve the world, they also have TD Canada Trust, which is the Canadian division of the bank.
This division has over 1,095 branches and serves over 11 million people. They offer many different financial services, including wholesale banking and private banking, as well as financial products and financing options.
The TD stock market price currently stands at around $97.26 per share, which shows that they’ve had a robust growth year. They have a market cap of 167.546B Canadian with an average volume of 7,387,197. Their P/E ratio is 10.09, and the dividend yield is 4.30%, which is good from a dividend perspective.
Bank of Montreal (TSE: BMO)
The Bank of Montreal, also referred to as BMO, was founded in 1817 and is Canada’s oldest bank and one of Canada’s top 5 banks. They’re a prominent lender that is also known to provide prominent robust growth years during the same period as other banks.
They offer different services, such as chequing accounts, savings accounts, investments, loans, mortgages, indirect lending and more. Currently, they have over 13 million customers, over 900 branches in Canada, and over $1.29 trillion in total assets. With that in mind, this is what their stock looks like:
- Around $144,58 per share
- Yearly range of $109.02 - $145.75
- Market Capitalization of 104.37B Canadian
- Average Volume of 2,13M
- P/E ratio of 13.43
- Dividend yield of 4.51%
Given that we see a growth upside on capital markets in this companies adjusted earnings in an industry that has such a heavily regulated nature, is impressive. It also speaks to growth potential in future years.
Bank of Nova Scotia (TSE: BNS)
The Bank of Nova Scotia, also known as Scotiabank, is one of Canada’s top 5 banks and is headquartered out of Toronto, Ontario. Technically, based on deposits and market capitalization, it’s considered to be the third-largest bank in Canada, which is partly due to the company’s Latin American exposure.
They offer services including loans, lines of credit, credit cards, chequing accounts, savings accounts, mortgages and self-directed investing, mutual funds, and more. They even have investment advisory services.
Here is the information regarding their stocks.
- The share cost is around $74.42
- The yearly range is $60.68 to $80.14
- Market Cap is 92.79B Canadian
- Average volume is 3.64M
- P/E ratio is 15.60
- Dividend yield is 5.91%
Canadian Imperial Bank of Commerce (TSE: CM)
Another member of Canada’s top 5 banks is the Canadian Imperial Bank of Commerce, also known as CIBC. They’re also headquartered in Toronto, Ontario. They offer personal banking, credit cards, loans, lines of credit, mortgages, investments and US cross-border banking. They were also ranked #1 for small business banking by J.D. Power.
The specifics of CIBC’s stock include the following:
- The stock price of around $94.63
- A yearly range of $64.63 - $96.45
- A market cap of 88.94B Canadian
- Average volume of 2.94M
- P/E ratio of 11.9
- Dividend yield of 4.01%
Canadian Bank Stocks and Why They’re Falling
With Canadian bank stocks, there are many reasons why the prices are falling. One of the largest influences is the sentiment on the market. Currently, the sentiment is negative, which is causing a price fall. This sentiment stems from many different factors, including global uncertainties, economic downturns, and regulatory changes. That said, emotional investing can also make a large difference. Investors basing their decisions on fears instead of facts can have a large impact on market prices.
Other things that are affecting Canadian bank stocks are the rise of fintech companies, consumer preferences, rising interest rates, loan defaults, credit losses and policies from the Bank of Canada. So even though some factors have larger influences than others, there isn’t just one cause. However, this isn’t the first time that the banking sector has faced challenges and had to overcome them. If we take historical averages into account, the banking industry is known for its resiliency.
Canadian Bank Stock ETFs
When it comes to investing in Canadian banks, stocks aren’t the only option available to you. Another way to invest is through ETFs. What exactly are ETFs, though? Well, ETFs, also referred to as Exchange Traded Funds, are a type of investment fund. Essentially, they track a basket of securities and are made up of stocks, bonds, currencies, debts, futures contracts, and/or commodities.
They’re similar to mutual funds in the sense that they allow you to invest in an already assembled portfolio of securities. Here are some of the best Canadian bank ETFs to invest in.
BMO Equal Weights Index ETF (ZEB)
This ETF has been around since October 2009. Even though it’s been around for a while, it has always generally performed well. This specific index aims to replicate the performance of the Solactive Equal Weight Canada Banks Index, net of expenses. The nice thing about this index is that each security has equal weight instead of having market capitalization weight.
BMO Covered Call Canadian Banks EFT (XFN)
This type of EFT is considered to be a medium investment risk. Many Canadian investors choose to purchase this fund because it helps to diversify their portfolio, and this particular fund invests in Canadian bank stocks of major banks, including RBC, TD and Scotiabank. It focuses on monthly cash flow while having the potential for capital gains. Its main objective is to provide a return similar to at least one ETF while mitigating any downside risk.
These are just some of the many reasons why this is a popular investment choice.
RBC Quant Canadian Bank Leaders (RBNK)
This index seeks to replicate the performance of a Canadian bank stocks portfolio. It is currently seeking to track the Solactive Canada Bank Yield Index. The reason that it appeals so much to investors is that it is ideal for tax-efficient income. It’s also a much simpler way to invest in Canadian banks and makes sense since they have a history of high dividend growth.
iShares Canadian Financial Monthly Income ETF (FIE)
There are many reasons that investors choose to invest in this EFT. It earns monthly dividend income, it’s a diversified portfolio of the Canadian financial sector, and it seeks to maximize returns and provide a stable stream of monthly cash distributions. It’s also available for registered plans.
Horizons Big Banks Index ETF (HBG)
This index is one of the top ETFs for Canadian banks. Like many of the other ETFs that we’ve discussed, this ETF offers exposure to a diversified portfolio of shares for Canada’s top banks. The difference between this ETF and the others is that this index focuses on the major players in the banking sector.
Canadian Bank Stock Dividend Yields
While we’ve discussed many of the top banks in Canada and what it would look like to invest in them, we haven’t talked much about dividend yields. Based on which bank you choose, all of the dividend yields will be different. That said, the two Canadian banks with the most consistent dividend payout ratios are the Bank of Montreal and the Canadian Imperial Bank of Commerce.
When it comes to dividend yields for Canadian banks, having a high share price isn’t always better. Currently, since share prices are so much lower than normal, dividend yields are higher. That said, as share prices increase, which they should as the banking sector recovers, there are large returns to be made by investors.
The Best Bank to Invest Within Canada
If you look at the list above, you’ll see some of the best bank stocks in Canada to invest in. That said, some of these banks are better than others. Currently, the top 4 would be the Royal Bank of Canada, Bank of Montreal, TD Canada Trust and Canadian Imperial Bank of Commerce.
That said, there can also be arguments as to why National Bank is a good option. However, in terms of growth stocks, EQ Bank could be a good investment as well.
Canadian Bank Stocks: Is It A Good Idea to Invest in Them in 2025?
Investing is tricky since it’s always difficult to predict the future. That said, Canadian banks have always been a good investment to hold onto. While they do fluctuate, they also have a history of being resilient. That said, investors should consider the fact that the future cost of bank stocks will rely a lot on whether interest rates will be cut this year or not.
This leaves a lot up in the air. However, as we already mentioned, the dividend yields with BMO Bank and CIBC are currently good and a good idea for those who are looking to start investing in banks.
2025 Bank Stock Prices
For a good portion of 2025, the bank stock prices were falling. However, they took an unexpected turn in 2025. With the unexpected decrease in interest rates, the housing market stabalized which in turn positively affected the best bank stocks in Canada. That said, the Canadian economy still hasn’t fully recovered, so it’s hard to know how long this increase will last.
In the Canadian stock market, there are always fluctuations since personal and commercial banking is affected by interest rate hikes, falls and other financial factors. When it comes to top Canadian bank stocks themselves, factors are always changing. These include things like current market caps, dividend payout ratios, price-to-book ratios, accounting values, and the stock’s price. Based on where things sit currently, though, those who invested in the big Canadian banks and top bank stocks will see a return on their investment. They’ve established solid earnings growth, which resulted in high dividend yields and higher dividend payments since most stocks had annual dividend increases. They also rival tech stocks and other emerging markets.
Final Thoughts
Investing in the stock market is difficult, especially for those who don’t have a lot of experience. That said, it’s still very doable. One of the ways that new investors start is by investing in Canadian banks. There are quite a few different bank stocks to choose from, but just like with any investment, it’s important that you make an informed decision before you choose which bank you want to invest in.
For more conservative investors or those looking for another way to diversify their portfolio, there’s also the option of financial ETFs. These can be invested into registered accounts and can be used to save for retirement or other large investments. Depending on the types of risk you’re willing to take with these, they can have better financial performance.
Since ETFs are a collection of stocks and other securities, they’re another great way to invest in the Canadian banking sector. Whether you choose to invest in ETFs or stocks, though, there are plenty of options to invest in for 2025.
