Does commercial banking pay well? (2024)

Does commercial banking pay well?

Commercial Banker Salary. $110,000 is the 25th percentile. Salaries below this are outliers. $179,000 is the 75th percentile.

In the U.S., commercial bankers earn an average salary of $104,981. However, compensation varies based on experience and the overall profitability of the financial institution an individual works for. As with any other career, average pay can also vary depending on the city where you're employed.

Banks are still a great option for employment though – especially for finance majors who don't want to work the long hours of Wall Street. Working at a commercial bank, you can help with a bank's investment strategy and help provide loans for your local community, all while still making a comfortable salary.

Cons of Working in Commercial Banks

Complicating these conversations is the heavily regulated nature of banking. Other potential cons of a career in commercial banking include: Stress. Some jobs in commercial banking might lead to a lot of stress, given the sensitivity of dealing with money and customers.

Typically banks screen resumes based on GPA and will often remove anyone below 3.5. However, there is room for an exception here, and exceptional experience may bypass GPA requirements if one can prove competency or high value to the bank. Use the GPA conversion below and include the number on your resume.

Commercial banking has a great work-life balance and offers room for those looking to work hard while also catering to those that prefer to cruise a bit more. Average hours are the standard nine to five, and there is a strong culture in most teams at a commercial bank to stick to this.

A Typical Day for a Commercial Banker

Morning is often spent catching up on administrative duties and any client problems that came in overnight, such as excesses and overdrafts in the operating accounts.

What position in banking makes the most money?

The highest paying jobs in retail banking usually belong to loan officers and major corporate executives, such as the chief financial officer (CFO) and chief risk officer (CRO).

Bank tellers are typically entry-level positions at banks that directly interact with and service customers. Most employers require at least a high school diploma, but advancement will often require a bachelors degree.

They make money from what they call the spread, or the difference between the interest rate they pay for deposits and the interest rate they receive on the loans they make. They earn interest on the securities they hold.

The job can also be stressful, as bankers are responsible for managing large amounts of money and making important financial decisions.

However, a 100-hour work week only occurs on a particularly busy and hectic week. For the most part, you can expect to have at least 70 working hours a week; and even that is stressful enough considering the average working hours for other vocations is around 40 to 50 hours.

When adding in bonuses, some of these bankers can end up taking home $200,000 or more per year. Granted, not all investment bankers are salaried. As the Corporate Finance Institute points out, it is possible to nab a $100,000 salary out of school, but it's not always the case.

It is possible to become a millionaire as an investment banker, but it is not easy. Investment bankers typically earn salaries in the $200,000 to $700,000 range, with bonuses that can bring their total income up to several million dollars per year.

For example, if you attended a top 5 university, majored in engineering, and completed 2-3 finance internships, a 3.3 – 3.4 GPA is not the end of the world. But if you went to a non-target school, majored in history, and completed 0 finance internships, then a 3.3 – 3.4 GPA may be the end of the world.

Goldman Sachs does not give a specific minimum GPA requirement, though some sources suggest a GPA of at least 3.6 is preferred. Additionally, you may need to show relevant coursework and hard skills for certain programs.

Is a 3.8 GPA good for investment banking?

GPA Cutoffs for Investment Banking

Students with poor grades will not be invited in for interviews with the highest paying banks. The cut off for Bulge Brackets is usually 3.5 or an 80% average, but the median is much closer to 3.7 or 3.8.

Credit risk is the biggest risk for banks. It occurs when borrowers or counterparties fail to meet contractual obligations. An example is when borrowers default on a principal or interest payment of a loan. Defaults can occur on mortgages, credit cards, and fixed income securities.

A commercial bank is an easy and flexible source of accepting and withdrawing money. These are the economical source of funds as it manages deposits and withdrawals at a low cost and involves no hidden cost. It generally provides the loan against some security.

Employment for financial managers (treasurers, finance officers, credit managers, cash managers, risk managers, etc.) at commercial banking and savings institutions is expected to grow by 16 percent through 2026, according to the DOL, or much faster than the average for all careers.