7 Stocks That Stand to Benefit If Interest Rates Rise

When interest rates rise, most companies feel the squeeze. Debt costs go up, valuations compress, and growth slows. But a few firms actually benefit when rates move higher.

Banks like JPMorgan and Bank of America earn more from the gap between what they pay on deposits and what they make on loans. Brokerages such as Charles Schwab see profits expand as they earn higher yields on client cash. These companies make money on the spread, not just on lending volume.

Insurers like Allstate and MetLife can see some benefit too as their investment portfolios start generating higher returns, although that can come with short-term balance sheet pressure.

If rates stay elevated, these types of financial stocks often prove more resilient than most. They turn what’s usually a market headwind into a source of steady profit growth.

Here are 7 financial stocks that can actually benefit from rising interest rates. Analysts see upside in these banks, brokers, and insurers as higher yields boost profits.

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Here are three stocks that could stand to gain the most if interest rates climb.

JPMorgan Chase & Co. (JPM)

JPMorgan Chase is unmatched in scale and precision. As the largest U.S. bank by assets, JPM sits atop more than $2.4 trillion in deposits, much of which earns minimal interest. When the Federal Reserve hikes rates, JPM’s net interest margin (NIM), the spread between what it earns on loans and pays on deposits, widens automatically. In the 2022–2023 tightening cycle, this dynamic helped JPMorgan generate record net interest income exceeding $90 billion, driving the bank’s most profitable year in its history.

Beyond sheer size, JPMorgan’s diversified lending engine, spanning corporate, mortgage, consumer, and credit card portfolios, amplifies its sensitivity to rates. Unlike smaller lenders that depend on short-term funding, JPM’s fortress balance sheet gives it a structural advantage in capturing higher yields while keeping deposit costs low. The result is a business that benefits both directly and durably from higher rates. For investors, JPM isn’t just cyclical; it’s a structural beneficiary of tighter monetary policy.

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Bank of America Corporation (BAC)

Bank of America is often described by analysts as the most asset-sensitive bank in America, meaning its earnings are among the fastest to rise when interest rates increase. That’s because roughly half of BofA’s loan book is tied to floating rates, credit lines, corporate loans, and variable mortgages that reset in real time with changes in benchmark rates like SOFR or the Fed Funds rate. Each 100-basis-point hike translates directly into billions in additional annualized net interest income.

In the 2022–2023 hiking cycle, this asset sensitivity became a major tailwind: BofA’s net interest income surged more than 25% year over year, even as loan growth remained moderate. The bank’s broad consumer deposit base, which tends to be “sticky” and low-cost, allows it to keep funding expenses stable while reaping higher yields from its lending operations. That structural setup, floating-rate loans financed by inexpensive deposits, makes BAC one of the cleanest, most powerful plays on sustained high or rising interest rates.

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The Charles Schwab Corporation (SCHW) 

Charles Schwab may not look like a traditional bank, but its interest rate sensitivity rivals any in the financial sector. The company earns a large share of its income from client cash balances sitting in brokerage accounts, funds that are automatically swept into Schwab’s bank subsidiary. When the Fed raises rates, the yield on those balances jumps, and Schwab’s net interest revenue (NIR) expands almost one-for-one. During the 2022–2023 rate surge, Schwab’s NIR more than doubled, offsetting pressure in its trading and asset management segments.

Unlike conventional lenders, Schwab benefits from a hybrid structure: its brokerage clients keep vast amounts of idle cash regardless of market cycles, and the firm invests that cash in short-term securities and loans. Because it doesn’t have to pay competitive deposit rates like big banks, Schwab captures a higher spread on every incremental rate hike. The result is a remarkably resilient earnings engine that thrives in rising-rate environments, making SCHW one of the most underrated yet pure plays on Federal Reserve tightening in the U.S. financial system.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!