Time to Deposit Funds Into Banks

NEW YORK ( TheStreet) -- Now is one of the best times to invest in the banking sector. With endless problems in Europe and recent downgrades by rating agencies, banking has lost investor interest.

Banks may not give you a free toaster anymore, but some are giving away lots of profits to investors in the form of earnings and dividends. Loan rates are low, but don't confuse low rates with low spreads. When banks can borrow at less than 1% and turn around and loan it out at 4% or more, the banks can do very well indeed.

Housing is still a mess; however, every day the mess becomes a little less. Some housing markets are already back to 2008 levels.

Instead of a simple solution of ever-increasing reserve amounts to prevent banks from becoming dangerously large, Washington decided hundreds of pages worth of Dodd-Frank was a better solution. Either way, the government has made it abundantly clear the banks listed below are safe from going out of business. TheStreet's Jim Cramer and Stephanie Link examine Moody's lowering of bank debt ratings in ActonAlertsPlus.

Bank of America ( BAC) is one of the world's leading financial services companies and trades an average of 180.4 million shares per day with a market cap of $81.9 billion.

BAC makes for a great daytrading stock. One look at the volume tells you daytraders, computers and high-frequency trading firms beat each other over the head nonstop with BAC. The advantage for investors is the spread is always small and getting in and out even outside normal trading hours is easy.

Short interest is very small at 2.5%.

The mean fiscal year estimate price-to-earnings ratio is 12.41, based on earnings of 61 cents per share this year. Investors are receiving 4 cents in dividends for a yield of .53%.

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