Few investments are as woven into the Canadian psyche as bank stocks. The country's "Big Six" banks form a tight oligopoly that controls the vast majority of Canadian banking, they are among the most heavily regulated in the world, and several have paid dividends without interruption for well over a century. For generations of Canadians, they have been the default core of a long-term portfolio.
There is just one catch in 2026: they have been on a tear. Every one of the Big Six is up roughly 55% to 70% over the past year, and that surge has pushed their famously generous dividend yields down to some of the lowest levels in years. So which bank is the best buy now? Here is how the six stack up.
Why Canadians love their banks
Three things make the Big Six special. First, structure: a handful of banks dominate the market, which limits competition and protects profits. Second, regulation: Canada's banks are conservatively run and tightly supervised, and famously none of them cut their dividends during the 2008 financial crisis. Third, dividends: these are income machines, with some of the longest continuous dividend histories on the planet.
That combination of stability and income is why bank stocks are a staple inside Canadian TFSAs and RRSPs, where the dividend yield compounds tax-sheltered.
The Big Six at a glance
Here is where each bank stands recently, ranked by size:
Royal Bank of Canada (RY.TO) is the giant, with a market cap around C$408 billion, the largest company in the country. It is the most diversified of the group, strong in wealth management and capital markets, and tends to be the "sleep well at night" blue chip. Its recent yield is a modest 2.2%, reflecting both its premium valuation and the rally. TD Bank (TD.TO), at roughly C$278 billion, is the most US-exposed of the Big Six through its large American retail network. That US footprint is both its biggest growth engine and its biggest source of headline risk. It yields around 2.5%. Bank of Montreal (BMO.TO), near C$176 billion, has also pushed hard into the United States. It pays the highest dividend per share of the group in dollar terms and yields about 2.6%. CIBC (CM.TO), around C$152 billion, is the most domestically focused of the larger banks. It trades at the cheapest valuation of the group, with a P/E ratio near 16.5, and yields roughly 2.5%. Bank of Nova Scotia (BNS.TO), often called Scotiabank, is the international one, with heavy exposure to Latin America. It has historically been the laggard of the group, which is exactly why it offers the highest yield of the six at around 3.6% and one of the lowest valuations. For income-focused investors, it is the standout on yield. National Bank of Canada (NA.TO) is the smallest of the six at about C$87 billion and the most Quebec-focused, but it has quietly been one of the most efficient and best-performing over the long run. It yields around 2.1%.How to pick the best one for you
There is no single "best" Canadian bank stock. The right one depends on what you want:
- For the highest income: Scotiabank (BNS) is the clear leader on yield, though its international exposure adds risk.
- For safety and size: Royal Bank (RY) is the blue-chip anchor, the most diversified and the least likely to surprise you.
- For value: CIBC (CM) and Scotiabank (BNS) trade at the cheapest valuations of the group.
- For US growth: TD and BMO give you the most exposure to the larger American market.
- For a quiet long-term compounder: National Bank (NA) has a strong track record despite its smaller size.
A word of caution for 2026: after a 60%-plus run, the group is no longer cheap, and yields are well below their historical norms. The banks remain excellent long-term holdings, but buyers today are paying up compared to a year ago. Dollar-cost averaging rather than piling in all at once is a sensible way to build a position at these levels.
Want the full picture on Canadian income stocks beyond the banks? See our guide to the best Canadian dividend stocks, or screen the whole market yourself with the stock screener.
Final Take
Canada's Big Six banks are still among the most dependable dividend payers in the world, and owning one or several inside a tax-sheltered account remains a proven wealth-building strategy. The nuance in 2026 is valuation: the huge rally has made them pricier and lowered their yields. If you want maximum income, Scotiabank stands out; for rock-solid stability, Royal Bank leads; and for value, CIBC and Scotiabank are the cheapest. Just go in knowing you are buying after a very strong year, not before one.
This article is for informational purposes only and is not financial advice. Figures are approximate and change with the market. Always do your own research before investing.
